MBTA solicits menu of revenue-raising ideas

Congestion pricing, increased highway tolls and higher vehicle excise taxes are among the possible ways the Boston Region Metropolitan Planning Organization suggested could generate funding for the T

NBC10 Boston

If and when lawmakers call the MBTA to talk about new funding options, officials at the agency, which has faced service and financial troubles, will have some ideas already in hand.

A top T official said Thursday that the agency asked a regional planning organization to compile a list of potential taxes and fees as well as how much money each approach might generate for public transit. They got back a menu of 10 options -- congestion pricing, increased highway tolls and higher vehicle excise taxes among them -- each projected to produce tens or hundreds of millions of dollars.



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MBTA Board Chair Thomas Glynn stressed that his colleagues were not proposing any of the taxes and fees. Instead, he said, T overseers want to have some ideas and figures ready for potential conversations with lawmakers, businesses or others in the year ahead.

But the step of soliciting a menu of options in place or under consideration at peer agencies -- all of which would require action by the Legislature to implement -- appears to be a shift. It was an unusually public step for the MBTA, where top officials have been more willing lately to speak up about the big-picture financial debate after long preferring not to make waves on Beacon Hill.

The presentation also came one board meeting after T overseers approved a budget that drains the agency's savings to drive up spending, leaving virtually no reserves in place to help manage a nearly $700 million shortfall projected to hit next summer.

The study from the Boston Region Metropolitan Planning Organization looked at three broad categories that lawmakers could target to drum up more transit funding: Bay Staters' access to motor vehicles, road and highway usage, and economic value generated by transit.

"You're not proposing anything, and we're not proposing anything. We anticipate as the debate plays itself out over the next year or so about transportation finance that we're going to get asked these questions," Glynn replied after researchers presented their findings. "So the T approached you as a more neutral agency, more like the Congressional Budget Office, to establish some kind of range so when legislators ask us or business groups ask us or transit advocates ask kind of what -- people have different assumptions and different agendas. That's the role that we're trying to establish here, just as a resource."

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An MBTA spokesperson said the agency paid $125,000 for the study.

Increasing the existing 2.5 percent motor vehicle excise tax by another 0.25 to 2 percentage points, the report found, could produce between $36 million and $570 million more, while tacking on higher vehicle registration fees could produce $33 million to $104 million.

Researchers said hiking the 24 cents per gallon gas tax -- an idea that ran out of momentum after the House approved it in 2020 -- -- could lead to $22 million to $356 million in additional revenue.

If the state increased its existing highway tolls 50 to 100 percent "to be in line with other East Coast cities," and the MBTA got half of the new revenue, officials would be looking at an additional $22 million to $80 million, the report found.

And congestion pricing -- a controversial but potentially impactful idea that New York Gov. Kathy Hochul moved to halt weeks before it was set to take effect in Manhattan -- could produce $220 million to $440 million annually, with some portion of that available for the T, according to the Boston Region MPO.

The report also saw significant financial potential in existing taxes. Increasing the MBTA's share of the 6.25 cents per dollar state sales tax from 1 cent to 1.25 cents could produce $335 million, researchers said, while taking money away that is currently used to support other state spending. Raising the meals tax 1 percentage point in the MBTA's service area could generate up to $175 million, while doing the same with the rooms tax could produce $35 million.

Researchers did not include T fare hikes among the options they studied.

MBTA officials have been mum on the idea of increasing fares to help drum up more money. The T last hiked fares in July 2019, before the pandemic punched a hole in ridership.

Glynn, a former MBTA general manager, added that the "final say in all these things" will fall to a transportation finance task force that Gov. Maura Healey created in January.

The MBTA-solicited analysis of revenue-generating options could overlap with the work of the task force, which has kept all of its meetings behind closed doors.

The tone of that panel's work also appears to have shifted after Transportation Secretary Monica Tibbits-Nutt set off a political maelstrom with candid remarks about investigating a wide range of tax and fee options, including highway tolls at the state's borders.

Tibbits-Nutt on Thursday praised the report about MBTA funding ideas and said she "really appreciate[s] the disclaimer" Glynn made.

"I think this can be really, really valuable for the work the transportation funding task force is doing. I think we're going to have to build off of it, because obviously this just covers a particular service area," she said. "For those of us working on this task force, a lot of our [focus] is the MBTA service area, but we're also looking across all 351 [municipalities] for all the different modes. But I think this is incredibly helpful."

Beacon Hill is set to increase state budget funding for the MBTA in the fiscal year that starts July 1, but even with the added support, T officials expect operating expenses will outpace available revenues by hundreds of millions of dollars in the subsequent year.

If Democrats feel inclined to take legislative action to address the approaching MBTA chasm, they're unlikely to do so this year. Formal business for the legislative term ends July 31, and the T does not appear to be on the long list of priorities that need attention before then. Healey's task force will not produce a report until December, which could help crystallize the next phase of debate.

One major option is already on the books: the voter-approved surtax on the state's highest earners, whose revenue can only go toward education and transportation investments.

Massachusetts collected about $1.8 billion from the new levy through the first nine months of fiscal year 2024, more than $800 million more than the surtax spending Beacon Hill built into the annual state budget.

As a result, hundreds of millions of dollars will get deposited into a dedicated fund. That money can be spent on "one-time education and transportation investments, including pay-go capital and other one-time projects," according to the Massachusetts Taxpayers Foundation.

An easier way to pay for MBTA fares is on its way.

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