The Massachusetts Bay Transportation Authority approved a $2.72 billion fiscal year 2024 budget that features $174 million in new spending amid declining revenues and expectations of a budget shortfall.
The MBTA executive board voted unanimously on Thursday to approve the plan and a 7% bump in year-over-year spending amid predictions for a 10% dip in operating revenues in the upcoming year and a possible $400 million budget shortfall by 2026.
Board member Thomas McGee called the figures" sobering" prior to the vote.
With the new plan, the authority will continue funding wide-ranging capital work and safety improvements in line with its $9.2 billion-five-year capital plan.
MTBA officials have identified 111 projects in need of funding through 2028.
Over half of the new spending will go to safety initiatives, including track upgrades, equipment procurement, training programs, and the strengthening of oversight initiatives.
The authority
The budget funds 7,643 employees, 964 above what was budgeted for fiscal 2023. More than two-thirds of the additional staff would work on safety initiatives, according to official plans.
The fiscal 2024 budget leans on state and MBTA bond sales, federal grants, and revenues, along with a one-time influx of $181 million in state infrastructure funds, to bankroll operations and capital work.
It also pulls $261 million from a debt defeasance fund, which will leave $500 million remaining in those reserves headed into the new fiscal year, Chief Financial Offers Mary Ann O'Hara told board members during the vote.
A large chunk of that fund consists of remaining COVID relief support, and if new funding issn't found, O'Hara said the MBTA would likely tap it dry by 2025, presenting "big issues" for operations "unless something changes on the financial structure," she said.
McGee also highlighted struggles with maintaining adequate reserves into the future without reoccurring revenue funding sources.
"Here we are again," he said. "The reality of building a defeasance fund is limited with without recurring dollars, both on the capital and the operating side."
