Banker & Tradesman file photo
MBTA budget-writers will attempt to balance the agency’s books next year by trimming spending on consultants and delaying lower-priority purchases, taking aim at a $93 million budget gap, officials said Thursday.
Work is underway to craft a spending plan for fiscal year 2025, and MBTA Chief Financial Officer Mary Ann O’Hara said the first step will be finding cost savings as the agency grapples with an approaching “fiscal cliff.”
Gov. Maura Healey proposed increasing state funding toward the T’s operating budget in her fiscal 2025 plan, but MBTA leaders expect they’ll still need to find another $93 million to balance their own expenses and revenues amid depleted ridership and a hiring blitz.
“We expect to meet that challenge through savings coming from reducing consulting costs or delaying purchases that are not critical,” O’Hara said at an MBTA Board of Directors subcommittee meeting Thursday.
State support for the MBTA’s operating budget has increased substantially in the past few years, according to data O’Hara presented. On top of the dedicated portion of the state sales tax – which jumped from about $1 billion in fiscal 2018 to $1.4 billion in fiscal 2023 – Beacon Hill has steered additional money to help respond to Federal Transit Administration safety orders and boosted contract assistance.
Headlined by new labor agreements that hiked pay and benefits, the T has been on an aggressive hiring campaign in recent months. The agency started fiscal year 2024 with about 1,500 vacancies, according to O’Hara’s presentation, and if it keeps up the current pace, it could close all of those vacancies by January 2025.
“It’s important to note that the T’s newfound ability to hire new employees outpaces our ability to fund them,” she said. “This is a very important factor, and identifying new sources of revenue as well as cost savings for ’25 is critical to maintaining our current pace of hiring.”
The T forecasts its budget woes will grow even larger in future years, with an annual gap of more than half a billion dollars hitting in fiscal 2026 and beyond. At the same time, riders still face slow travel in some areas and frequent disruptions, even as officials make some progress toward long-term repairs.
While hiring successes have helped the T address some service headaches, the agency still has not reversed weekday frequency cuts to the Red, Orange and Blue Lines implemented in the summer of 2022.
