A good start for MBTA reform

From The Beacon, Summer 2015

Last month, the MMA Board of Directors announced its support for the key components of Gov. Charlie Baker’s MBTA reform legislation and urged legislators to embrace the principle elements, including establishing a potent fiscal and management control board, exempting the MBTA from the so-called Pacheco outsourcing law, and enacting safeguards to make sure that future arbitration awards are affordable for riders and taxpayers.

The good news is that the Legislature has advanced two of these essential measures – creation of a control board and exemption of the MBTA from the Pacheco law – in its final fiscal 2016 state budget, a budget plan that also contains impressive and much-appreciated investments in local aid.

Legislators should be commended for taking these important steps to reform the MBTA, a multi-billion-dollar agency whose financial health affects the entire Commonwealth. It is equally important to recognize that there are further steps to take before the reform process is complete. Other needed reforms include putting in place a check and balance on unsustainable arbitration awards, a key change to guarantee that the agency’s personnel costs are affordable in the future and do not crowd out necessary infrastructure and service investments.

Fixing the MBTA is not a narrow regional issue. The MMA decided to tackle this issue because half of the communities in Massachusetts belong to the district and pay millions of dollars in assessments to fund the MBTA’s operations, and the MBTA plays an essential role in the economy of an overwhelming number of our cities and towns. Further, the state contributes more than $1 billion a year to the T, and ongoing management problems and cost overruns will drain revenues and resources away from transportation projects and local aid in every corner of Massachusetts.

Getting the MBTA to function properly is a top priority for almost every stakeholder, and, as last winter demonstrated, there is a huge amount of work to be done to fix the agency’s finances, management and operations, and build the first-class system that taxpayers deserve.

It took a record-setting winter to unveil what insiders have known for years – there are serious weaknesses in the MBTA’s underlying ability to perform, plan for the future, or use resources wisely, and major changes are needed to improve service and ensure the kind of accountability to riders and taxpayers that is necessary. The MMA is calling for passage of a strong reform bill because tinkering around the edges will not be enough.

The facts show that the MBTA’s fiscal situation is dire, with projected expenditures far outpacing revenues in every year moving forward. The budget gap will grow to unsupportable levels in future years unless the MBTA is transformed into an accountable and structurally sound organization.

The major reforms that the MMA has asked the Legislature to adopt include the following:
• Passage of a strong Fiscal and Management Control Board and the appointment of a chief administrator for the MBTA
• Exempting the MBTA from the Pacheco law governing the outsourcing of services
• Requiring the Control Board to approve future arbitration awards and prohibiting retroactive awards
• Allowing alternative construction methods, including construction management at-risk and design-build procurement
• Extending the public records law to the MBTA retirement fund and implementing an independent audit of the T’s retirement system
• Expanding the Massachusetts Department of Transportation’s Board of Directors to include municipal government experience

The MMA is also calling for the state to continue transportation funding to the MBTA and all regional transit agencies, consistent with the levels committed to in the 2013 transportation finance law enacted by the Legislature. Reducing state funding and contract assistance for public transit before all of the reforms are implemented would prolong the agency’s fiscal problems and undermine the chance of success.

Contract assistance is another term for the additional appropriation that the state committed to the MBTA when the transportation tax package was signed into law in 2013. The MBTA Advisory Committee, the panel of 175 local officials from every city and town in the district, has also prioritized continued state funding. The state has pledged more than $500 million in contract assistance in fiscal 2017 and 2018. Suspending or eliminating those funds would deepen the T’s fiscal woes and place enormous pressure to raise fares or cut services.

Similarly, the MMA also strongly supports funding for all of the other regional transit systems across the state, because maintaining and increasing resources for RTAs is critical to the success and growth of regional economies all across Massachusetts.

Reform is always difficult to enact, and thus there will be pressure to block consideration of the further system improvements that are necessary. One thorny issue for legislators will be the question of fixing the MBTA’s flawed binding arbitration system.

Today, the MBTA is the only public agency where an outside, unaccountable arbitrator’s decision on collective bargaining disputes is a dictate that must be funded by taxpayers, legislators and the executive branch, with no chance for review by any representative of the public. All other forms of arbitration at the state and local level at least require a vote of approval from the legislative body before rulings can go into effect. Over the years, outside arbitrators have awarded extremely costly benefits that have driven MBTA expenses up far faster than inflation, with no check and balance to make sure the awards are affordable. That needs to change. In the end, arbitration awards should require the approval of the new control board, the governor, the MBTA Advisory Board, or the Legislature.

Lawmakers deserve applause for taking meaningful steps to increase the prospects for progress and improvement at the state’s most troubled agency. But more work is necessary, and we encourage legislative leaders to maintain the momentum for reform and complete action as soon as possible.

July may be the height of summer in New England, but winter will be here sooner than we want to believe, and the MBTA will be tested again. Let’s make sure the system has the tools and management authority it needs to pass the test in the winter of 2016.