When the largest public transit systems in New York and Minnesota faced daunting budget crises last year, political leaders in both states decided they had to do something — and something big and bold — or else train, bus, paratransit, and commuter rail operations would suffer.
And that’s exactly what they did: Lawmakers injected vital new funding into the systems in the Big Apple and the Twin Cities, shoring up day-to-day finances and investing in improved service for years to come.
The effort to confront the financial challenges in those troubled transit systems produced positive results, officials say. But in Massachusetts, where the state’s largest public transit system estimates a yawning budget gap of $628 million come July, top leaders have failed to advance any long-term solutions. Governor Maura Healey has appointed a task force to look into the problem and report back — by December.
The lack of urgency has left some observers feeling like the state is kicking the can down the road on T investment ... again.
“The answer is straightforward, there are clear funding solutions out there,” said Yonah Freemark, a senior research associate at the Urban Institute and author of a recent report about how states can increase public transit funding. “The agency is being tasked with waiting another few years to solve problems that were caused by previous administrations.”
The T projects its operations budget gap may grow to nearly $700 million next year, its chief financial officer told the board of directors last month, and could hit $863 million by 2028.
Karissa Hand, a spokesperson for the governor, said in a statement that Healey’s office will work closely with the T to “address their financing needs and ensure the long-term success of the system.”
“From day one, the Healey-Driscoll administration has been clear that the MBTA has been underfunded for decades and that there is an urgent need for increased funding,” Hand said.
Financial troubles are not new. But since the pandemic, the T has struggled to restore service and attract ridership, one-time federal COVID funds have nearly dried up, and its major source of funding from state sales tax has underperformed. Meanwhile, a tax on the state’s highest earners, which voters approved in 2022 for education and transportation, has not produced enough funds for all the T’s needs.
For years, transit advocates have pushed the Legislature and governor to create funding sources that would allow the agency to close its budget gap and plan for improvements to service and infrastructure. In the past, the Legislature created commissions and explored congestion pricing, increasing fees for Uber and Lyft, and tying the gas tax to inflation, but no funding solution has made it across the finish line into law.
Fare revenue this fiscal year pays for just 15 percent of total T operating expenses. An outsize portion — 19 percent — of operating expenses pays down debt for capital projects, some of which the state required the T to take on to mitigate the Big Dig.
“The T has been starved for money,” the agency’s chief operating officer, Mary Ann O’Hara, told board members in January.
Healey is proposing to use $172 million from the new higher-earners tax to narrow the T’s budget gap for the fiscal year that starts in July. Even if the Legislature approves her proposal, the T estimates it will need to identify savings of $93 million and spend all $363 million from its rainy day fund to balance its budget, according to O’Hara’s budget projection presentation.
The grim outlook, confoundingly, has MBTA Advisory Board executive director Brian Kane optimistic for the first time in a long time that the governor and Legislature might act, albeit not this year.
“I think it has become patently obvious that we cannot reform our way out of this, reorganize our way out of this,” said Kane, who will serve on the governor’s new task force. “I shouldn’t be optimistic; the history of Massachusetts funding the MBTA is not a successful one. I believe the task force will be the vehicle that solves this problem once and for all. Call me naive, but I think this is real.”
Across the country, public transit ridership was about 28 percent lower in the third quarter of 2023 compared to the third quarter of 2019, before the pandemic, according to data published by the American Public Transportation Association.
But not all transit systems are so financially troubled.
Last year, Minnesota’s largest transit agency, Metro Transit, which provides bus, light rail, commuter rail, and paratransit service for the Twin Cities, said it was facing a $261 million budget gap for the two-year period starting in summer 2025. At that time, Democrats had won control of both houses of the state Legislature for the first time in nearly a decade.
The previous period when the Minnesota Legislature had a Democratic majority during a Democratic governorship, in 2014, the state failed to pass an adequate transportation funding package, said Sam Rockwell, executive director of the transit organization Move Minnesota.
Advocates vowed not to let the opportunity pass them by again.
Metro Transit, controlled by a board appointed by the governor, requested the Legislature create a 0.125 percent sales tax for the Twin Cities area, which would have still left the agency facing a deficit come 2025.
Rockwell and a coalition of advocates did some back-of-the-envelope math and determined that revenues from a 1 percent sales tax would enable Metro Transit to not only fill the looming budget gap, but also meaningfully improve service.
Legislators, not the governor or the transit agency, championed the bold vision and the new tax to pay for it, Rockwell said.
“We turned people out at the very beginning of the Legislative session, packed the room,” Rockwell said. “Legislators realized that this was really important to people really early.”
The Legislature ultimately passed a transportation funding package that included a 0.75 percent sales tax in the Twin Cities area that is expected to generate nearly $975 million in the two-year period starting in summer 2025, wiping out Metro Transit’s budget gap and exponentially increasing revenue.
New York isn’t waiting either.
Last year, the Metropolitan Transportation Authority, which runs the New York City subway, commuter rail, paratransit, and bus system, warned of a $600 million deficit in its operating budget.
The agency, together with the governor, hammered out new taxes and worked to gain support from legislators.
“We worked very closely with MTA leadership, who went above and beyond their own advocacy,” said Danny Pearlstein, policy and communications director for Riders Alliance, a public transit advocacy organization. “We presented a positive vision for a transit-based future.”
The state approved a host of new revenue streams, including an increase in payroll taxes on New York City employers and future licensing fees from casinos.
For the first time in 20 years, the MTA released a balanced operating budget for the next five years.
“It’s easy to get bogged down in minutia,” said Pearlstein, “But where the agency is not responsible for its budget, it’s important to go to the top.”
The top in Massachusetts is the governor’s office. And for now, Healey’s proposal doesn’t include a sustainable, long-term funding fix for the T’s day-to-day expenses.
Boston Chamber of Commerce president Jim Rooney, a former general manager of the T, said solutions that could include tolls and congestion pricing will be “incredibly politically difficult things to implement.”
“It’s patch the leak in the roof while we figure out how we’re going to pay for a new roof,” said Rooney. “I think that’s unfortunately what she was handed. I don’t think she has a choice but to approach it that way.”
Others, including MBTA board Chairperson Thomas Glynn, also a former T general manager, say they’re confident the Healey administration will find a solution. Glynn cites previous ambitious projects such as cleaning up the Boston Harbor, the Big Dig, and health care reform.
“Our history as a community is we can do big things once we reach consensus,” Glynn said.
But Massachusetts has another kind of history on big subjects: procrastination.
Healey’s transportation task force has not yet scheduled its first meeting.
Correction: An earlier version of this story misstated Thomas Glynn’s involvement with the governor’s new transportation task force. Glynn will not serve on it.