Air Date: Week of June 15, 2012

MBTA Red Line leaves Charles/MGH, Boston, MA. (Flickr CC/bindonlane)

Business is booming for mass transit but for some cities it could be the end of the line. Host Bruce Gellerman finds Boston public transportation facing fare hikes and service cuts.

Transcript

GELLERMAN: It’s Living on Earth, I’m Bruce Gellerman. Use of public transit in the U.S. is soaring. In cities across the country, people are riding buses, trains, trolleys, and subways in record numbers. But that’s stressing the transit system’s ability to carry passengers and stressing cities financially, some to the breaking point. Brian Kane is a mass transit policy expert.

KANE: There’s pretty much one way to run railroads and some places do it very well and some have more challenges than others, but generally the challenges outweigh the lack of them. [LAUGHS]

GELLERMAN: And nowhere are the challenges to urban mass transit as great as in greater Boston. Some of the challenges are unique to the region, but what’s happening here also serves as a precautionary case study for the rest of the nation. A bit of history is in order.

[BELLS OF BOSTON COMMON]

GELLERMAN: Just across the street from the gold-dome Massachusetts State House is Boston Common. It’s the oldest city park in the U.S.. Puritans used it as a cow pasture and British troops camped here while Colonial tea partiers revolted. Today it’s a great place for a quiet stroll. But Boston brahmin Henry Lee says at the turn of the 20th century, streets around the park were so thick with horse-drawn traffic and animal waste, crossing was difficult and dangerous.

LEE: In the 1890’s the traffic on Tremont Street was so tremendous - horses and carriages - that they decided to put trolley cars across the common.

GELLERMAN: Henry Lee is the former president of a group that protects Boston Common.

LEE: And there was outrage among citizenry to desecrating the Common with trolley car tracks. And a group of women marched on the state house, and the legislature, all male then, was completely cowed and gave in and rescinded the rule. Then everybody said, well, what’s the solution? And it was decided - why don’t we put the trolley cars underground?

[SOUND OF PARK STREET METRO]

GELLERMAN: And they did. In 1897 America’s first urban, underground railway opened at the edge of Boston Common. Boston historian Susan Wilson calls Park Street station the birthplace of mass transit in the United States.

Here in a darkened tunnel she points to a 110-foot long mural commemorating the subway’s history. The mosaic is embedded with memorabilia from the era.

WILSON: If you look over to the right you’ll see it says, “Park Street, the first subway in America.” And there’s all kinds of wheels and spokes and pulleys and mosaic stuff. Oh, and this is my favorite thing: five-cent fare - lasted 25 years.

GELLERMAN: In fact, adjusted for inflation, Boston’s subway fares actually stayed the same from 1897 until the year 2000. An attempt to raise fares in the late 1940’s drew an angry response from riders who were tired of the T being used for political patronage.

The Progressive Party’s candidate for mayor took up the issue, and made the Massachusetts Transit Authority the subject of his campaign song.

[MUSIC : Well let me tell you of the story of a man named Charlie / On a tragic and fateful day, / He put ten cents in his pocket, kissed his wife and family / Went to ride on the MTA. / Well, did he ever return? No, he never returned / And his fate is still unlearned. / He…]

WILSON: The song was about a five-cent exit tax that was being added to what was called at that time the MTA.

[MUSIC CONTINUES: He’s the man who never returned...]

WILSON: Today we call it the MBTA.

GELLERMAN: The MTA has since morphed into the MBTA, the Massachusetts Bay Transportation Authority, or the T, as it’s called. It includes not just subways but buses, ferries, commuter trains and trolleys. These days, the T services 176 cities and towns in eastern Massachusetts, making it the fourth largest mass transit system in the nation. It also has the dubious distinction of being the most in debt.

Stephanie Pollack is Associate Director of the Dukakis Center for Urban and Regional Policy at Northeastern University.

POLLACK: The MBTA is in pretty dire shape. We’ve basically been charging all the bills and making the minimum payments on the credit card. And we just figured out that if you keep making the minimum payment, you never pay it off.

GELLERMAN: Until a dozen years ago, budgeting wasn’t a problem for the T because it didn’t have a budget. If, at the end of a fiscal year, there was a shortfall in running the Transit service, state lawmakers reached into general revenues and made up the difference. Then in 2000, the legislature passed a measure called Forward Funding. The mass transit system was told to come up with a balanced budget and as part of the deal got 20 percent of all the revenue from the state sales tax. Again, Stephanie Pollack.

POLLACK: And that was actually a huge victory. It amounts to half a billion dollars a year in revenue that the MBTA has that no one can touch. The problem is that that gift came with some strings attached, including some pretty substantial debt and the requirement that the MBTA pay its own way in the future.

GELLERMAN: The strings were attached to the giant construction project known as Boston’s Big Dig. It’s a system of tunnels, roads and bridges under and around the downtown area. The Big Dig was the largest, most complex and costly highway project in U.S. history.

In exchange for getting money from the state’s sales tax, the T inherited three point three billion dollars in Big Dig debt. Delayed by a decade and plagued by design flaws, the price tag for the highway project tripled. Dan McNichol is author of the book “The Big Dig.”

MCNICHOL: This is where the big leak took place. Everything on the Big Dig was big, and the leak here pushed hundreds and hundreds of gallons every minute into the Big Dig tunnels. It was a major embarrassment: a 15 billion dollar tunnel, and it was leaking before it was even two or three years old.

GELLERMAN: Today, the T is drowning in Big Dig red ink. Revenue from the state sales tax didn’t increase as expected. So the T has had to borrow money. It’s issued bonds, and now its debt troubles have literally compounded. That original 3 point 3 billion owed to bondholders plus new debt has ballooned to almost 9 billion dollars.

For the Massachusetts Bay Transport Authority, forward funding has spiraled out of control. Brian Kane, Budget and Policy Analyst with the T Advisory Board, wrote a report about the problem. He called it, “Born Broke.”

KANE: But for that transference of debt, forward funding would have been a smashing success. Unfortunately, with the transference of that amount of debt and the mandate to pay the debt service on that debt, the T’s finances have been broken since 2000.

So to maintain the system they borrow money. They borrow hundreds of millions of dollars every year to maintain the system and they pay that back out of the operating budget every year. And going forward, they will continue to basically pay every dollar they earn in fares basically in debt service.

GELLERMAN: If I had to pay for my ride right now on the subway, what would it really cost?

KANE: Roughly six dollars, of which you pay two. Fares are roughly 450 million dollars a year and debt service is roughly 450 million dollars a year. They don’t have enough money to operate the system, let alone maintain it.

GELLERMAN: By 2004 it was obvious the wheels were coming off the MBTA. Massachusetts Governor at the time, Mitt Romney, asked state lawmakers to set up an independent panel to investigate the T’s troubles. Their final report came out 3 years later, just as Romney’s Democrat successor was taking office. Governor Deval Patrick urged the legislature to agree to one of the panel’s major recommendations, asking for a big boost in the state’s fuel tax to fund mass transit.

The proposal got nowhere fast. But fares sure have; they’ve gone up three times since the year 2000, while the T’s budgetary hole has only gotten deeper. At the start of this year, the T didn't have enough money to run the system. It was 160 million dollars short. So officials proposed a 43 percent increase in fares and draconian cuts in service. Transit riders were outraged.

The T backpedaled. It sold off some real estate, cut workers and benefits, and the fare hikes were cut in half, and services largely preserved. But transit riders with disabilities will bear a disproportionate share of the rate hikes. For those who use the federally mandated transit system known in Boston as The Ride, the cost of a trip will double. 61-year old Wilhelmina Melrose calls The Ride her lifeline.

MELROSE: Either there’s gonna be a lot of appointments I’m not gonna make, or I just have to cut my grocery shopping down, and I’m a diabetic and, you know, the doctors want you to eat properly.

GELLERMAN: At the end of this month, fares for Wilhelmina Melrose and others with disabilities taking The Ride, will increase from two dollars to four. But the actual cost of this trip for the MBTA is about 40 dollars. Ten percent of the T’s budget goes to providing service for one percent of its passengers. MBTA policy analyst Brian Kane says transit systems nationwide are confronted with the same basic questions: who benefits from mass transit, and who pays?

KANE: You know, it’s important that people with disabilities have access to transportation services. But it’s also important that we figure out the right financial model to pay for that. And putting it on the backs of the public transportation provider of mass transit is not necessarily the right way. Mass transit is wholesale, paratransit is retail, and it doesn’t always make sense to do those things together.

POLLACK: You know transit is expensive: it makes sense but it’s not a moneymaker.

GELLERMAN: Again, Stephanie Pollack from Northeastern University.

POLLACK: It’s not a moneymaker pretty much anywhere in the world, and it’s not designed to be a moneymaker. That’s not to say riders couldn’t pay more. Some of the finest systems in the world - you pay more and you get more. In the United States we’ve more fallen into the - you pay less and you get less. The concern in a place like Boston, with a hundred-year old system that’s aging, is we’re going to pay more and get less. That’s the worst of all worlds.

KANE: Every time someone gets on the T, the authority loses money. But that’s ok: this is a public good.

GELLERMAN: Mass Transit policy analyst Brian Kane:

KANE: This is what economists call a merit-good, that benefits society, that all of society pays for through subsidies. We just have to find the right model, and it is out there. Other places do it very well and have very good financial models. California - Los Angeles County, for instance - just taxed themselves, voted to increase their own sales taxes to provide better subway service in LA, which is the car capital of the world. And it’s working; they’re building brand new subway lines in Los Angeles right now that’s going to transform that city.

GELLERMAN: Brian Kane says even city drivers benefit from mass transit, because there’s less traffic on the road, fewer accidents, and more parking spaces. And we all benefit because there’s less pollution and climate changing emissions. The MBTA is the largest user of electricity in Massachusetts, and per passenger mile, it emits a lot less CO2 than cars, says Stephanie Pollack:

POLLACK: You know we talk about efficiency when we talk about buildings, but there’s actually something called location efficiency, which is how transportation actually reduces your carbon footprint. When things are closer together, you can walk for some of your needs, you can bike for some of your needs. If things are farther apart, you can’t do that. Transit is actually what makes density possible, because if you think about putting a lot of homes or a lot of square feet of business on a very small piece of land and then having everybody drive there, it doesn’t work. Transit is what makes cities possible.

GELLERMAN: In St. Louis, advocates of mass transit came up with a slogan: “Transit - some of us ride it, all of us need it, and all of us need to help pay for it.” It was designed to convince voters there to tax themselves more for the service.

POLLACK: One of the places that transit advocates sometimes get stuck is that, well, money comes from one of two places: it comes from taxpayers in general or it comes from the people who are using the system. And so if fares are higher taxes are lower, and if taxes are higher fares are lower, and it’s kind of a zero sum game.

So a lot of places have started to say, yeah but if there are all these other groups that benefit from the system what if they pay? So in Chicago, universities participate in something called the Universal Pass system. And they pay for unlimited transit access for all of their students, whether their students use it or not, and their college ID’s are their transit passes. But they write a check to the Chicago Transit Authority every semester for - I think it’s roughly 100 dollars per student per semester. And so the transit authority can count on that revenue, the students get the benefit of transit, the universities not only support the transit system, but they have fewer people driving to their campuses. Everybody wins - new source of money.

GELLERMAN: Transit ridership in Boston and around the country has been steadily rising, and today, with 75 percent of Americans living in urban areas, that trend is expected to continue. Brian Kane says that makes mass transit more important than ever:

KANE: I think young people, new people just moving into the city, even people like myself with young families, want to live near public transportation. I think the days of the ex-urb are over. And I think people are coming back into the city and want density and they want public transportation, because it’s a huge quality of life. Investing in public transportation is investing in our city, in our society, in our state, and in our people.

It is by far the right thing to do because of the environmental benefits that it buys, because of the congestion mitigation that it buys, the air quality improvements that it buys and the economic development that it buys. We have it here. We just need to reinvest in ourselves and realize that.

GELLERMAN: But in some cities, where budgets are already busted, those investments aren’t being made. Repeated cuts in services and fare hikes can only go so far before passengers rebel.

[PROTESTERS IN PITTSBURG]

Earlier this month, demonstrators were arrested in Pittsburg, protesting a decision to reduce bus service there by 35 percent.

[BOSTON PROTESTERS CHANTING “FREE CHARLIE”]

GELLERMAN: And in Boston, angry transit riders faced with more cuts in services and yet another fare increase, also took to the streets, echoing an earlier fight against the rising price of public mass transit.

[PROTESTORS SINGING: But did he ever return? No he never returned. / And his fate is still unlearned. / He may ride forever ‘neath the streets of Boston / He’s the man who never returned…]

 

Links

Brian Kane wrote “Born Broke: How the MBTA found itself with too much debt, the corrosive effects of this debt, and a comparison of the T’s deficit to its peers”

Transportation Finance in Massachusetts: Volume 2 Building a Sustainable Transportation Financing System