On Tuesday afternoon, Governor Maura Healey and Lieutenant Governor Kim Driscoll outlined a strategy to address growing budget shortfalls in the Commonwealth's transportation agencies by using higher-than-anticipated revenues from the state's new "Fair Share" tax surcharge on high-income households.
The announcement offered a preview for how the administration plans to address a $700 million hole in the MBTA's budget forecast for next year when she files her annual budget proposal to the legislature next week.
"There's been a lot of talk about the cliff that the T is facing, and it is real. We've got a program and a proposal that is effectively going to close that gap and stabilize the T over the next several years, so that Phil (Eng) and his team can take the T to the next level. You'll see more frequent trains and buses, you'll see major station upgrades," promised Healey.
"Bottom line, you're going to wait less and move faster," the Governor added.
"This is a game-changer for the agency," said MBTA General Manager Phil Eng, who also spoke at Tuesday's event. "It will immediately address the MBTA's budget shortfall and help us achieve long-term reliable financial stability."
Numerous members of the Healey administration, including Transportation Secretary Monica Tibbits-Nutt, Administration and Finance Chief Matt Gorzkowicz, Economic Development Secretary Yvonne Hao, Climate Chief Melissa Hoffer, and MBTA General Manager Phil Eng, joined the Governor for the announcement at Worcester's Union Station, where the T hopes to add regional rail service with more frequent-running trains over the next few years.
All those officials also served on the Governor's Transportation Funding Task Force, which convened for a final meeting last week.
In conjunction with the press event in Worcester, the administration also published that Task Force's final report on Tuesday.
Heavy lifting for 'Fair Share' revenue
When she signed an executive order creating the transportation funding task force a year ago, Governor Healey charged the group with identifying new, more sustainable sources of public revenues for the MBTA and other statewide transportation programs.
But the final report issued Tuesday shied away from recommending new taxes or tolls, at least for the short-term.
Instead, the Task Force recommended that the state leverage higher-than-anticipated tax collections from the "Fair Share Amendment," the state's new higher tax rate on incomes over $1 million, which took effect in January 2023.
Last week, the state's budget office released new tax revenue estimates for the upcoming fiscal year that suggests that there will be a considerable increase in funding for education and transportation programs from Fair Share revenues in the upcoming fiscal year.
In a press release issued on Tuesday afternoon, the Governor revealed that her fiscal year 2026 budget proposal would include "$687 million to stabilize MBTA operations, including $500 million from Fair Share to to fund programs such as the MBTA Workforce Academy, low-income fares and water transportation programs."
Administration and Finance Chief Matt Gorzkowicz said that Fair Share "has outperformed expectations, yielding $2.46 billion of revenue in (fiscal year) 2024 for education and transportation."
Last year's budget legislation conservatively planned for $1.1 billion in Fair Share revenue. Gorzkowicz said Tuesday that the Governor will submit a supplemental budget proposal "to spend the $1.3 billion in unbudgeted surplus Fair Share collections from FY24."
An accompanying press release from the Governor's office revealed that that supplemental spending proposal would include $400 million to compensate the T for increased workforce expenses and safety programs associated with the Federal Transit Administration's safety management inspection, plus $300 million to replenish MBTA reserve funds.
