On January 3, the MBTA unveiled plans to institute major service-cuts and fare-hikes. On January 10th, just a week after this announcement, more than twenty people met in Somerville to begin organizing against the proposed changes.
“The T cuts are, in effect, a tax on those who can least afford to pay it: workers, seniors, and students in our city,” said Somerville resident Joe Ramsey. “Public transportation should be a public right. The 1% needs people to get to work or school so they can run their companies. They should pay the travel costs.” Many in the audience agreed. It was the first meeting of an initiative now calling itself “Occupy the T.”
Participants in this first meeting of “Occupy the T” included members of the MBTA Riders Union and members of the Service Employees International Union, local high school students, Occupy Boston and Occupy Somerville.
According to the January 3 announcement on its website, the MBTA is currently considering two different scenarios of service-cuts and fare-increases. Under the first scenario, there would be cuts to bus service, combined with a 43% overall increase in fares. For Senior Citizens who depend upon the RIDE, the price would increase from $2.00 to $4.50. Fees at T parking lots would increase by 28%.
Under the MBTA’s second scenario, overall fare increases would go up by 35%, but there would be far more extensive cuts to bus service. According to the Department of Transportation, at least six bus routes in the community would face cuts or be eliminated. Among the bus lines affected in Somerville would be routes 80, 85, 90, 92, 95, and 96. Other service cuts are also planned throughout the Greater Boston area.
In addition, costs for students’ and senior’s’ monthly passes would increase under both proposals. The MBTA would raise pass prices for students and seniors to $40 under scenario 1 and $39 under scenario 2. Currently they are under $20. Both proposals would also eliminate weekend service on Green Line E branch, the Mattapan high speed line and the commuter rail.
A typical T-rider could expect annual transportation costs to go up by several hundred dollars. Many will be forced to walk long distances or rely on costly and air-polluting automobiles. The MBTA itself predicts that either of the two proposed plans would have a significant negative impact on pollution and air quality in Boston.
According to its announcement, the MBTA expects to implement one of the two plans on July 1, the beginning of the new fiscal year.
The MBTA’s proposed fare increases and service cuts are in response to a projected budget deficit of $161 million for the coming fiscal year. At the “Occupy the T” meeting, Adam Machson-Carter explained that funding for the T comes largely from sales taxes and state subsidies. Only 30% of funding comes from fares. Meanwhile, debt servicing comprises slightly more than 25% of the T’s annual operating budget. As Machson-Carter outlined, the share of the T’s budget contributed by fare payments is only slightly greater than the share that goes to paying interest to private lenders.“ When you pay your T fare,” Machson-Carter said, “you are paying for the T’s debt to the banks.”
The MBTA’s debt to the banks can be traced to the year 2000. Prior to this date, the state of Massachusetts funded the T directly. However, in 2000, the Enabling Act, also known as Forward Funding, ceased direct and full public funding for the T. Henceforth, the state contributed only a fixed percentage of state sales tax (20%) to the MBTA. A decrease in sales tax revenues now results directly in a decrease in funding to the MBTA.
At the same time, the state of Massachusetts also transferred $3.8 billion of its debt-load — most of which stemmed from Big Dig related expenses — onto the MBTA as part of Forward Funding. Deprived of guaranteed public funding and pinched within the new financial structure, the managers of the MBTA took loans from private investment banks and engaged in risky “gambling” practices involving interest rate swaps. Then the recession hit, resulting in diminished sales tax subsidies for the T.
The result of these complex transactions and diminished state funding has been that the MBTA currently finds itself indebted to UBS Bank for $9 million, Morgan Stanley for $182,000, JP Morgan Chase for $4.4 million, and Deutsche Bank for $8.6 million. Each of these banks was the recipient of federal bailout money in 2007-8.
After outlining the context of the MBTA’s announcement, the “Occupy the T” meeting broke into smaller groups to discuss ways to fight the cuts and fare increases. Attendees stressed the importance of rejecting the state’s claim that there is no alternative to the two proposed regimes of cuts and fare hikes. Instead of deciding between the MBTA’s two proposed plans, “Occupy the T” hopes to expose the role of for-profit financial institutions in creating and perpetuating the MBTA’s budget crisis. Several present argued that the banks should cancel the T’s debt and state fund the T directly by raising taxes on corporations and the richest 1% of state residents.
Proposed actions included mass leafleting at T-stops, outreach on the bus lines slated for reduction or elimination, outreach to MBTA workers, coordination with existing community groups, and a possible fare strike. There was concern that the MBTA might try to play different communities against one another by offering to retain service in one area at the expense of cuts elsewhere. In response, participants in the meeting argued for the need to “unite the many against the few.” A committee was formed to produce a newsletters to help spread the word and build the cause.
The day after this first meeting of “Occupy the T”, there was a follow-up discussion at Occupy Somerville’s General Assembly. Another meeting is planned with the T-Riders Union later in the week. Supporters can join the the group on Facebook at “Occupy the T” or “Against the T Cuts.” Meeting organizers have called for those who oppose the MBTA plans to show up en masse at the T’s upcoming open community meetings.
This would not be the first time that MBTA fare increases have been met with broadly based and creative protest. In 1949, fare hikes provoked a popular song whose lyrics tell of a man named Charlie who is forever trapped on Boston’s subway system because he didn’t have the money to pay the exit fare. In 2004, this figure of popular protest was co-opted into the MBTA itself, when then Republican Governor Mitt Romney dubbed the new electronic T-passes “Charlie Cards.” At the “Occupy the T” meeting, Joe Ramsey spoke of the need to reclaim Charlie for the 99% and suggested organizing around the slogan “Free Charlie.”
This slogan calls for freeing T-riders from fare hikes but goes further, calling for free public transportation and freeing the T from its crushing debt – something that the state insists is impossible. In response to the state’s claim that there is no alternative, Ramsey argued for demanding the impossible.
[Edit 1/19/12: Adam Machson-Carter gave the overview on finances, not Jeremy Thompson (he explained the interest rate swaps)]