THIS ARTICLE ORIGINALLY APPEARED IN THE JANUARY 18 EDITION OF THE BOSTON OCCUPIER.
On January 3, the MBTA unveiled plans to institute major service cuts and fare hikes. On January 10, just a week after this announcement, more than 20 people—including members of the MBTA Riders Union, the Service Employees International Union, local high school students, Occupy Boston and Occupy Somerville—met to begin organizing against the proposed changes. It was the first meeting of an initiative now calling itself “Occupy the T.”
According to an announcement on its website, the MBTA is currently considering two different scenarios of service cuts and fare increases. Under the first scenario, there would be cuts to bus service, combined with a 43 percent overall increase in fares. For senior citizens who depend upon the RIDE service, the price would increase from $2 to $4.50. Fees at T parking lots would increase by 28%.
Under the MBTA’s second scenario, overall fare increases would go up by 35 percent, but there would be far more extensive cuts to bus service. According to the Department of Transportation, at least six bus routes in the community would face cuts or be eliminated. Among the bus lines affected in Somerville would be routes 80, 85, 90, 92, 95 and 96. Both proposals would also eliminate weekend service on the Green Line E branch, the Mattapan high speed line and the commuter rail.
A typical T-rider could expect annual transportation costs to go up by several hundred dollars.
Many will be forced to walk long distances or rely on costly and air-polluting automobiles. The MBTA itself predicts that either of the two proposed plans would have a significant negative impact on pollution and air quality in Boston.
According to its announcement, the MBTA expects to implement one of the two plans on July 1, the beginning of the new fiscal year.
The MBTA’s proposed fare increases and service cuts are in response to a projected budget deficit of $161 million. At the “Occupy the T” meeting, Jeremy Thompson of Mass United explained that funding for the T comes largely from sales taxes and state subsidies. Only 30 percent of funding comes from fares. Meanwhile, debt servicing comprises slightly more than 25 percent of the T’s annual operating budget. As Thompson outlined, the share of the T’s budget contributed by fare payments is only slightly greater than the share that goes to paying interest to private lenders.
“When you pay your T fare,” Thompson said, “you are paying for the T’s debt to the banks.”
For years, the state of Massachusetts funded the T directly. However, in 2000, the Enabling Act, also known as Forward Funding, ceased direct and full public funding for the T. Henceforth, the state contributed only a fixed percentage of state sales tax (20 percent) to the MBTA. A decrease in sales tax revenues now results directly in a decrease in funding to the MBTA. At the same time, the state of Massachusetts transferred $3.8 billion of its debt-load—most of which stemmed from Big Dig related expenses—onto the MBTA as part of Forward Funding.
Deprived of guaranteed public funding and pinched within the new financial structure, the managers of the MBTA took loans from private investment banks and engaged in risky “gambling” practices involving interest rate swaps.
Then the recession hit, resulting in diminished sales tax subsidies for the T.
The result of these complex transactions and diminished state funding is:
the MBTA currently finds itself indebted to UBS Bank for $9 million, Morgan Stanley for $182,000, JP Morgan Chase for $4.4 million, and Deutsche Bank for $8.6 million.
Each of these banks was the recipient of federal bailout money in 2007-8.
Attendees to the meeting stressed the importance of rejecting the state’s claim that there is no alternative to cuts and fare hikes. Instead of deciding between the MBTA’s two proposed plans, “Occupy the T” hopes to expose the role of for-profit financial institutions in creating and perpetuating the MBTA’s budget crisis. Several present argued that the banks should cancel the T’s debt and that the state should fund the T directly by raising taxes on corporations and the richest 1 percent of state residents.
This would not be the first time that MBTA fare increases have been met with creative protest. In 1949, fare hikes provoked a popular song whose lyrics tell of a man named Charlie who is forever trapped on Boston’s subway system because he didn’t have the money to pay the exit fare. In 2004, this figure of popular protest was co-opted into the MBTA itself, when then Republican Governor Mitt Romney dubbed the new electronic T-passes “Charlie Cards.” At the “Occupy the T” meeting, Joe Ramsey spoke of the need to reclaim Charlie for the 99 percent and suggested organizing around the slogan “Free Charlie.”
FOR THE FULL TEXT HEAD TO BOSTONOCCUPIER.COM