Finding funds
While debt payments will make up about one-quarter of the T’s FY09 operating budget, the agency is also coping with having about $200 million less in sales tax revenue than expected since 2000, when its forward funding plan began.
Updated 2008-07-14 04:01
T faces more money woes
The MBTA will need $25M more than budgeted to cover fuel costs
The MBTA will need $25 million more to cover fuel costs than it originally anticipated for the new fiscal year due to skyrocketing energy costs, according to the T’s top financial official.
Jon Davis, the CFO for the T, told the Massachusetts Bay Transportation Authority board Thursday along with gas prices, the agency’s debt and stagnant sales tax revenue will leave the MBTA in a difficult situation. The T began the new fiscal year with a $75 million budget deficit covered by drawing heavily on reserves and restructuring debt, options that may not be available next year.
Reiterating comments he made to the board in March, Davis said the T will have significant problems balancing future budgets and solving its deficit “without revenue sources, debt relief or significant service cuts.”
While fare revenue has risen with increased ridership — 5.9 percent from January to May this year compared to last year — the boost isn’t close to compensating for the rise in energy costs, he said.
“It is now at a point where available cash to meet day to day operating needs is reaching a critical level,” Davis said.
