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February 27, 2017

MBTA looking to address $50M operating deficit

The MBTA is looking to close a $50 million operating deficit.

As part of a multi-year effort to reduce its structural budget deficit, the MBTA is exploring "headcount reduction" as well as contracting opportunities and reexamination of low ridership services as officials look to address a $50 million operating budget deficit by the end of fiscal 2017 in June.

According to MBTA documents issued in connection with a board meeting Monday, the T is also eyeing revenue opportunities associated with "enhanced fare collection" on commuter rail routes, increased parking revenue associated with its vendor Republic taking over a contract in April, and revenues associated with 700 new digital ad screens being rolled out by another new vendor, OUTFRONT Media.

MBTA documents outline other fiscal challenges, including debt service costs that are scheduled to increase $53 million to $273 million in fiscal 2019, RIDE service costs that are on track to run $10 million over budget in fiscal 2017, and "tough choices on wage/benefits" in fiscal 2018 including "lower headcount," lower wage rates for new hires and "work-rule reform."

MBTA documents show the T has shrunk its operating deficit, in part by reducing operating expenses by 0.3 percent in fiscal 2016 and holding operating expenses flat this fiscal year, but also by boosting "own-source" non-fare revenues to $59 million from $43 million in fiscal 2015. Increased state budget assistance to the T is helping the authority invest in equipment upgrades and modernization.

The MBTA Control Board on Monday also asked its counsel to draft a letter to Gov. Charlie Baker recommending that the board's existence be extended two years beyond the board's current June 30, 2018 end date. Baker this month said he wants the board to extend its existence

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