January 25, 2016

MBTA fare increases contrary to no new fee policy?

Courtesy Antonio Caban/SHNS
Morning commuters step off Green Line train at Park Street Station. A debate is underway regarding whether MBTA fare increases are actually a raise in fees, contrary to the governor's promise of no new fees.

Gov. Charlie Baker has held the fiscal line for Massachusetts taxpayers and those subject to myriad governmental fees, promising no hikes in the fiscal 2017 budget.

"The budget that we're working on ... is not going to include any new fees or taxes in it," Baker said in early January, a message he reiterated in his State of the Commonwealth address.

Yet for customers of the government-operated MBTA, July 1 could bring a fare increase that averages out to about 9.7 percent. The first public hearing on the T's fare proposals will be held Monday in Lynn.

While the Baker administration maintains T fares are distinct from fees, opinions held by other officials and experts are mixed on that front, with hints of a partisan divide. The MBTA fares would not be part of the state budget. Baker plans to submit his draft of the annual spending plan on Wednesday.

Subsidized to the tune of nearly $1.2 billion by taxpayers around the state, the MBTA's finances are tied into the state budget but the agency has its own budget. Lawmakers and transit activists who have challenged the size of the proposed fare hikes have acknowledged some increase would be prudent.

Though they did not opine on the fare proposals, a Harvard professor who Baker appointed to an MBTA task force last year and the president of the Massachusetts Taxpayers Foundation both told the News Service the fares appear to be a form of fee.

"I would think that a fare would be a fee," said Jose Gomez-Ibanez, a professor of urban planning and public policy, when contacted by the News Service about any distinction. He said, "A fee is a payment for a service."

"A fare is just a more specific type of fee. It's the price you pay to ride something," said Massachusetts Taxpayers Association President Eileen McAnneny. She distinguished MBTA fares from other government charges, noting the agency has its own budget and sets its own fares, similar to how the University of Massachusetts sets tuition.

The Massachusetts Water Resources Authority serves a similar area to the MBTA, and has received some state funding - though nowhere near the level of the T's built-in taxpayer subsidy. Fees for the water and sewer service will go up starting July 1, though the amount has yet to be determined, according to MWRA spokeswoman Ria Convery. She said the state's rate relief payment for fiscal 2016 is $870,000.

The MBTA has looked for cost savings and advertising revenue opportunities, in addition to the fare proposals, as it faces what was once projected as a $242 million fiscal 2017 deficit.

Transportation Secretary Stephanie Pollack, a member of Baker's cabinet, helped develop a range of fare-increase proposals, and it will be the Baker-appointed Fiscal and Management Control Board that determines how much fares increase July 1.

The question of whether a T fare is synonymous with a fee appears to have some partisan colorings. Elected Democrats quizzed about the distinction generally said they failed to see one, while Republicans said the MBTA is a special case.

"I think at the end of the day the governor is very reasonable in terms of his approach and what's going on over there. You're talking about a totally different kettle of fish over at the MBTA," said Rep. Todd Smola, the ranking Republican on House Ways and Means. The Warren lawmaker said, "The MBTA is kind of its own animal."

When it raised gas and tobacco taxes in 2013, the Democrat-dominated Legislature established a framework for regular, moderate fare increases at the T - though there has been disagreement over the specifics of that provision.

"I understand the governor to be saying that we're not going to finance the operations of state government generally with increases in fees or taxes, but when it comes to the MBTA, we have always expected them to generate a lot of their own-source revenue, and I think raising the fares are consistent with that understanding of how they're financed," said Senate Minority Leader Bruce Tarr, a Gloucester Republican. He said, "I think the MBTA is much more of a - or should be much more of a pay-as-you-go operation and I think it's dis-analogous to other taxes and fees."

The House and Senate chairmen of the Transportation Committee said a distinction between a fee and a fare is either non-existent or at least unapparent to the riders being asked to pay more.

"To the person paying it, the word difference is no difference. They're being asked to pay more for a government service," said House Transportation Chairman William Straus, a Mattapoisett Democrat. He said the most important metric is whether service is improving - a major area of focus for the Baker administration.

"I would say fare, fee. It's the same. It's a fee to ride, a fare to ride - you're talking about the same thing," said Senate Transportation Chairman Tom McGee, a Lynn Democrat. "So it's semantics in some ways when you're talking that way. I mean the fares are going up. It's a fee on the riders. It's an increased fee."

Brian Lang, the labor representative on the T's control board, said transit fares are distinct from government fees.

"It's a quasi-government service. The T doesn't fall squarely in the realm of government service," said Lang, who said the two proposals - to raise fares either 6.7 percent or 9.7 percent - are not "written in stone."

"We never said anything about fees not going up and our budgets are different," said Monica Tibbits-Nutt, a member of the control board who declined to opine on the governor's statement.

Showcasing the MBTA's efforts to upgrade track infrastructure ahead of this winter, Baker in September rejected the notion that taxpayers around the state be asked to pay more for Metro Boston's public transit, citing lack of confidence in the system's operations.

"I'm not talking taxes, period. Not talking taxes. Because as far as I'm concerned we have a long way to go here to demonstrate to the public, to each other and to everybody else that this is a grade-A super-functioning machine that's doing all the things it should be doing to maximize its performance and maximize its own-source revenue as well," Baker told reporters in a Dorchester work yard.

Former Gov. Michael Dukakis said he would not have claimed to hold the line on fees while MBTA fares increased, and he disagrees with any fare increase given recent service problems.

"Is a fare increase a fee increase? Sure it is. I mean what else is it?" the Brookline Democrat asked in a phone call from his winter residency in California. He said, "I'm not saying you never raise them, but this is a particularly strange time to do so when the service is so bad . . . How do you justify a fare increase when people are getting the kind of service they're getting?"

A regular Green Line rider and transit advocate, Dukakis suggested a modest gas-tax hike and the state absorbing the MBTA's Big Dig-related debt as prerequisites for a fare hike.

Tim Buckley, Baker's communications director, said fares are distinct from fees because of the substantial state subsidy for transporting riders - which totals $2.86 for the average bus trip, according to the T.

"Fees are designed to cover the cost of the service or product they're related to," Buckley said. He said, "Raising fares are indeed a last resort as the administration more than understands the headaches and difficulties around delays associated with the MBTA. That is why it is a top priority to fix the MBTA."

State regulations include more than 100 pages of fees - including everything from the $78 owed for a master barber license to the $1,000 ship chandler's license. Those fees, which are set by the Executive Office for Administration and Finance, do not include MBTA fares.

The office does not set fees for public higher education or the courts, according to state law.

Dorchester Democrat Rep. Dan Hunt said there is a "revenue problem," and he hopes Baker doesn't use the tactic of fee increases - an alternative to tax increases - to solve it the way Gov. Mitt Romney did.

"Now we're talking about a fare increase on what has been not the most reliable train system in America. I think before we see a fare increase or would accept something, I think the administration needs to show us that they're making the other reforms necessary. I don't want to see something like Romney 2.0," Hunt said. He said, "I think the fares are exactly the same thing as a fee for a use of a permit or use of some sort of property."

Framingham Democrat Rep. Chris Walsh said he saw a "contradiction" between the governor's pledge not to raise fees for this year's budget and the MBTA fare hike proposals, and he said the proposed fare hikes amount to an "admission that there's a revenue problem."

Baker has diagnosed the budgetary troubles, which have surfaced regularly since a couple months before he took office, as a spending problem as opposed to a revenue problem.

"We're facing a transportation finance crisis in this state, but nobody's having that discussion," said A Better City President and CEO Rick Dimino, who likened fares more to tolls than to fees.

Rafael Mares, vice president of Healthy Communities and Environmental Justice at the Conservation Law Foundation, said a distinction between fees and fares cannot be made "without getting hyper-technical."

"If fares aren't fees in that context, neither are tolls; and I doubt that is what he means," Mares wrote in an email.

Rep. Geoff Diehl, a Whitman Republican who helped lead a ballot repeal of a law that would have automatically increased the gas tax as inflation increases, noted the costs borne by drivers who are "being asked to subsidize rail."

"I don't think this really does anything to challenge the no new taxes or fees pledge that he and the speaker have put forward," Diehl said. He said, "Drivers expect not to be constantly carrying the freight of folks riding the T."

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