Worried about the impact of potential fare hikes and service cuts at the MBTA, some of Massachusetts’s most powerful CEOs have been holding meetings about the prospect of a short-term solution to the agency’s financial woes, according to the head of a group that represents the Bay States biggest employers.
“If people can’t get to their jobs, we’re going to see a slowdown of economic activity here in the commonwealth,” said Dan O’Connell, president of the Massachusetts Competitive Partnership. “The T issue, of course, impacts the Greater Boston area. The commuter rail system and the T are critical to people getting to work at State Street and Fidelity and Putnam and Bank of America and Partners Healthcare, all of which are represented by their CEOs in our group.”
O’Connell, who was Gov. Deval Patrick’s top economic development aide from 2007 to 2009, said his organization has met with A Better City, the Greater Boston Chamber of Commerce and the Massachusetts Taxpayers Foundation to discuss their concerns about fare hikes and service cuts proposed by the T to close an anticipated $161 million budget deficit.
MBTA officials have attributed the deficit to energy costs that have tripled in the past decade, a $5.2 billion debt burden that consumes 30 percent of the agency’s budget, skyrocketing costs to provide transportation to people with disabilities, and stagnant sales tax collections – a portion of annual sales taxes is the largest component of the MBTA’s budget.
The Massachusetts Competitive Partnership, whose members meet regularly with Patrick administration officials, includes New England Patriots [team stats] owner Robert Kraft, Suffolk Construction CEO John Fish, Partners HealthCare CEO Gary Gottlieb, NSTAR CEO Thomas May, and the heads of Mass Mutual Financial Group, Fidelity Investments, Liberty Mutual, State Street Corp., Putnam Investments, Staples, EMC, Raytheon, and BJ’s Wholesale Club, as well as a former chairman of Bank of America.
“We have not yet come up with a solution, working together with these others. But we do think there needs to be some significant restructuring of the debt burden that the T operates under,” O’Connell said. “Possible sources of the ability to do that are, for instance, the proposal that Massport might take on some responsibility for the water transportation element, which is a very successful and important part of bringing people to work in the city of Boston.”
O’Connell was referencing a recent report that the Massachusetts Port Authority might help subsidize ferry service between the South Shore and Boston to help alleviate pressure on the MBTA.
Asked whether businesses were prepared to chip in to help limit the MBTA’s deficit, O’Connell said, “A lot of our employers are already very much involved with subsidizing and paying for T passes for people who come in. So if fare increases are a component of the solution – and I believe they will be – then we will be continuing to stand behind our employees for public transportation through the T pass systems.”
“The business community can assist in outlining solutions for the problem,” he added. “I think there’s an expectation in the business community that even though there have been some very significant reforms already … there are still opportunities for cost savings.”
O’Connell, who worked for Patrick when the governor launched a failed attempt to raise the state gas tax, said the “window of opportunity” appeared to have closed on that proposal, particularly given sharply climbing oil prices and instability in the Middle East.
O’Connell’s comments about a short-term solution came as a clamor to limit MBTA fare hikes and service cuts has grown within the Legislature.
Rep. Joseph Wagner (D-Chicopee), co-chair of the economic development committee and former co-chair of the transportation committee, called the short-term challenge “real” and urged those awaiting a potential legislative solution to “stay tuned.” But like other lawmakers, Wagner argued that longer-term financing issues for the state’s roads, rails, bridges and waterways are “more significant.”
“We do a disservice to the public who use MBTA services and to drive on the roads of the commonwealth if we don’t look at a comprehensive fix, notwithstanding the short-term problem,” he told the News Service. “We understand how critically important both the short and long-term issues are.”
His comments came after a three-hour hearing at which state officials and advocates for Massachusetts businesses weighed in on a recent economic development strategy embraced by the Patrick administration, the product of a task force chaired by Economic Development Secretary Greg Bialecki.
After testifying at the hearing, Bialecki told the News Service that he’s worried about the potential impact of the state’s transportation finance challenges on economic development.
“Businesses are looking at what the long-term business climate is for Massachusetts,” he said. “They’re looking for predictability. If they perceive that we’re a state where there’s uncertainty from year to year about how much transportation service we can provide, that is not a positive message for the long-term. We’re open to short-term solutions, but we want to make sure that everybody understands we need to get this right.”
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