A perfect storm of austerity in Boston

March 9, 2015

This winter has stretched Boston's transit system to the breaking point--but there's no solution being offered except to make workers pay more, writes Dana Mittenbacher.

FOLLOWING A series of record-breaking winter storms that dumped a total of over eight feet of snow, Boston's mass transit system, including subways, buses and commuter rail, were paralyzed throughout February by equipment breakdowns, leaving the city at a virtual standstill. More than a third of Red Line and Orange Line trains were disabled, and entire sections of the electrified third rail were frozen over, leading to days of a citywide shutdown.

As of this writing, the subway and buses are still running behind schedule, and the commuter rail system--contracted to Keolis Commuter Services, a private company--is operating 40 out of 63 locomotives, leaving numerous Boston-area workers quite literally out in the cold. Adding insult to injury, authorities announced that it will take up to 30 days for the system to recover fully.

The Massachusetts Bay Transportation Authority (MBTA) is the fourth-busiest subway system in the U.S., with over a million individual passenger trips every weekday. One-third of Boston workers are dependent on the T for their commute. Thus, the MBTA shutdown has been devastating for low-income and hourly Bostonians, who have lost days of wages when they were unable to make it to their workplaces.

A subway station in Cambridge
A subway station in Cambridge (Peter Enyeart)

Russ Davis, director of Massachusetts Jobs With Justice, told the Boston Globe, "A lot of these folks aren't going to get paid for the day, and they're already on the edge...You're living paycheck to paycheck. Some people would not be able to cover their rent."

PROBLEMS WITH the T are nothing new. The Globe traces the chronic underfunding of the T back to the early 1990s, and it worsened when the system's budget was switched to "forward funding" and when debt from the Big Dig highway and tunnel construction project was added into the mix. (Notably, current Massachusetts Gov. Charlie Baker was himself one of the architects of the enormous debt incurred by the Big Dig.)

The strain has't gone unnoticed. In 2009, the Globe reported that wooden gutters on the Green Line were "frequently catching fire"; a commuter rail section in Quincy was at risk of derailment due to a potential retaining wall collapse; and the Orange Line's 30-year-old circuit breakers could expose passengers to "explosions, fire, flying debris, and release of hazardous materials."

The primary cause of the most recent subway failures are the outmoded traction motors--they run on direct current, which is more vulnerable to the effects of cold and snow. All Orange Line trains and many of the Red Line trains are also over 34 years old, and the newest Red Line cars have been in service since 1994.

"If, years ago, the authority had had the money and funds to do a midlife overhaul, and replace and upgrade the propulsion system, the traction motors would have been updated with them," MBTA General Manager Beverly Scott told the Globe. "But some things you don't get to pick and choose."

The attempts to make up the budget shortfall have been halfhearted. A letter from state Rep. Dave Rogers explained how debates on T funding have played out in the state legislature:

Gov. Deval Patrick proposed a bold plan that called for raising $1.9 billion in revenue in part by raising the income tax, actually lowering the sales tax significantly, and closing or modifying 44 different credits, deductions and exemptions in the Massachusetts state tax code. The money raised was to be spent on two major investments: transportation and education.

His proposal fell flat in the legislature, with many members skittish about a big tax increase. While my relatively more progressive/liberal constituency would likely support a tax increase as long as they knew it was targeted to meaningful investments in our future, many legislators represent districts where a tax vote would all but guarantee them a very serious political challenge and indeed could cost them their seat in the legislature.

The end compromise resulted in raising the gas tax and cigarette tax, which laid the burden disproportionately on working-class residents--and didn't raise enough money anyway.

In a city with 53 institutions of higher education, including Harvard University, Massachusetts Institute of Technology, Northeastern University, Boston University and Boston College, it seems obvious where the money might come from. But these world-renown nonprofit institutions are tax-exempt. They depend on the city's infrastructure, but have no obligation to pay for it. Since more than half of the city's overall land is owned by nonprofits or the government, the shortfall is huge. Ronald Rakow writes:

Boston also has a revenue structure that is unique among its large-city peers, primarily because it has no income, payroll, sales or other significant source of tax revenue. Instead, Boston relies heavily on the property tax, which represents two-thirds of all city revenue...

While New York or Chicago also have large amounts of institutional property exempt from the property tax, those cities are able to tax the incomes, sales and other economic activity which the universities, hospitals and other large nonprofit institutions generate. In contrast, Boston receives no direct compensating revenue associated with the economic activity that is generated by its vibrant nonprofit sector...

The benefits of Boston's nonprofits do not stop at the city's borders; the educational, scientific, and cultural benefits of Boston's institutions accrue to the region, state, country and, in many cases, the entire world. Yet the cost of providing public services to these institutions and the loss in revenue from removing their properties from the tax base fall squarely on Boston's taxpayers.

In a desperate attempt to make up some of the shortfall, the city launched a program called Payment In Lieu of Taxes (PILOT), which calls for institutions to voluntarily make payments proportionate to the assessed value of their property and the cost of providing city services to them. Unsurprisingly, many institutions failed to volunteer: In 2014, 16 out of 49 institutions which received PILOT requests paid nothing. Medical institutions have paid around 95 percent each year, but in 2014, educational institutions paid only 56 percent of what they owed. Harvard University, the wealthiest educational institution in the U.S., paid only 51 percent.

SO WHERE does this leave Bostonians? According to a February 20 press release, Gov. Baker is currently convening a panel of national leaders in transportation, economic development, and municipal planning to analyze what went wrong and how to fix it. Panelists include:

-- Jane Garvey, top pick for Transportation Secretary in the Obama administration, former administrator of the Federal Aviation Administration, and also former executive director of the infrastructure advisory group at JP Morgan Securities, which, according to the New York Times, "arranges private buyouts of public highways and other assets."

José Gómez-Ibáñez, professor of Urban Planning and Public Policy at Harvard's Kennedy School of Government, who ominously notes in a recent interview, "The failure to charge the full cost of transport is the root of all problems. None of the solutions you can think of are going to make much dent as long as transport is underpriced."

Katie Lapp, executive vice president of Harvard University, and a co-chair of the Boston 2014 Executive Bid Committee formed to bring the Olympics to Boston (a prospect that has become increasingly unpopular, with opposition to the Olympics growing by 13 points since the blizzards).

So far, there has been little grassroots pushback around the MBTA disaster. Comically, the effort that received the most attention is a GoFundMe campaign by local writer Janssen McCormick. No coverage of the campaign has noted that taxing those who can spare it might be a more effective means of "crowd-funding." A Facebook page called "Save the MBTA" has emerged as well, with a meeting planned for early March.

However, resistance is building to the Olympics bid, with an organization called No Boston Olympics gathering over 3.000 "likes" on Facebook. Plus, there has been a ferment in Boston around anti-racist struggle--earlier this winter, the no-indictment decision in the Eric Garner case drew more than 10,000 Bostonians into the streets to demand justice, in one of the largest protests local organizers could remember.

The governor's panel may be in agreement that privatization, raising fares and bringing in the unpopular Olympics are the answer to the T's woes. But if the workers and students of Boston disagree, the politicians could have a fight on their hands.

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