Last week, Bernard Cohen, the state’s transportation secretary and MBTA board chairman, called the T’s financial status “serious,” adding he would try to address the T and the state about solving the issues. “I don’t have any answers or any promises, other than to say I take these issues very seriously,” he said.
Lawmakers are discussing legislation allowing the state to use its strong credit rating to help the Massachusetts Turnpike Authority refinance its growing debt. But the MBTA is also strapped for cash, and officials have long argued state relief might be one of the few options left.
The MBTA currently has $4.9 billion in outstanding debt (not including interest), and after tapping some funds to balance the latest budget, the T’s chief financial officer said last week it will be difficult to solve its structural deficit without additional revenue sources, debt relief or substantial service cuts.
While the Pike and the MBTA have long-term sustainability concerns, the Turnpike’s poor credit rating prompted the state’s proposal to address the Pike’s “swaption” agreements. Those involved variable interest rate loans to help pay for the Big Dig that now require much larger repayments.
According to the Patrick administration, the T’s financial situation is also on its radar. But yesterday, Michael Widmer, president of the Massachusetts Taxpayers Association, said he would be concerned if the state helped ease the T’s debt. He instead suggested the state should increase the gas tax and the agencies should hike fares to boost revenue.
“One of greatest risks here of the Commonwealth doing this is that the T is next,” said Widmer, who is against the proposed Turnpike deal. “Not that T doesn’t need help, but putting the Commonwealth at risk is not the way to do it.”
Meanwhile, the Patrick administration and state Treasurer Timothy Cahill have clashed over the Pike proposal. Cahill said it “carries a significant risk for taxpayers,” but the administration believes it won’t likely have to pay anything.
