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I didn’t realize my comments on MBTA reform would have such prescient timing. Today, news comes that the authority is cutting 30 jobs as part of a stop-loss effort to plug holes in the operating budget. What’s frustrating is not the layoffs per se (though of course I say that since I’m not the one getting laid off), as there may be some fat to trim for all I know. But they’re not cutting back from a position of strength in order to find operational efficiencies; they slashing in Draconian fashion. From the Globe:

MBTA General Manager Michael H. Mulhern yesterday fired 33 managers and administrative staff members in yet another cost-cutting measure as the transit agency prepares for its third consecutive budget shortfall.

Facing a projected $10 million deficit in its 2005-06 operating budget that starts July 1, Mulhern also plans to ask the MBTA Board of Directors next week to dip into the authority’s emergency budget for the first time in six years. And he plans to ask the board to sign off on ending Nite Owl weekend bus service and its subsidies to private suburban bus lines.

This year, Mulhern has already cut about 100 jobs from the T’s 6,000-employee payroll. Many of those fired had been away from their jobs for a year or had exhausted their sick time. Those cuts helped the T mend a $16 million deficit in the current fiscal year. Mulhern also plans to trim about 100 employees from the Green Line by running trolleys with a single driver.

Forget for a moment the puzzle of how exactly the Green Line trains can run with a single driver. From 2004 to 2006, the MBTA will lose 4 percent of its staff (including drivers presumably). Under this strain, improvement in service promised when fares were raised (even before) seems highly improbable. What we have instead is a vicious circle in which the recession has made the T cut back on quality and quantity of service, which has led to declining ridership, which has led to declining fare (and even ad) revenues, which in turn forces the MBTA to scale back even more. Back in 2003 it was possible to predict that increased fares would hurt ridership, giving the T limited help from the fare increase. I don’t have the ridership numbers handy, but according to the budget figures, subway/commuter rail/bus revenue went up from FY2003 amounts of $117.0M/$84.9M/$69.1M to FY2004 amounts of $124.20M/$89.1M/$78.1M. The rise seems impressive and it certainly was necessary for the T’s fiscal health, but it’s merely a rise of 6.2%/5%/13%, whereas the fare hike was about 25% (the higher revenue/lower ridership decline of bus riders just shows that demand for bus services is less price-elastic than subway or commuter rail — which makes sense given that it’s disproportionately the poor who rely on buses). So ridership is way down.

Step one in building ridership back is not having a General Manager that blithely declares that transit long ago "lost the competition with the automobile." And, too, as I and others have written before, the T can be smarter about a lot of things before even spending another dime. But, ultimately, ridership will rise when a) our economy picks up again and more people commute to work and b) when the T puts more resources to better service.

I’m not optimistic about point b) because those resources are tied to the sales tax revenue, which itself fluxuates in the economic cycle and thereby feeds the vicious cycle I mentioned above (sales tax revenues are down precisely when there are fewer commuters and fewer advertisers). If there’s a major gripe I have with the Globe piece it’s that they refuse to analyze the budgetary situation themselves. Mac Daniel writes, "Mulhern blames the projected shortfall on rising healthcare and fuel costs, a $6 million drop in ad revenue, a past promise to give unionized workers a 4 percent pay increase, the continuing decline of ridership, and the growing gap between what the T says it needs in state sales tax revenue and what it is getting." Well, Mulhern says this. Is it true? What is the sales tax shortfall exactly? At least the Herald lets us know that

The budget woes facing the T are mostly due to lagging state sales tax revenues that have continually left the agency shorthanded. The tax revenues, which became the T’s primary money stream as part of restructuring in 1999, were supposed to increase 3 percent annually. However, T officials said, some years have seen no increases and next year is expected to produce only a 1 percent increase, which accounts for most of the agency’s $20 million budget gap.

From the Globe article we learn that the MBTA is banking on the fare cards as their budgetary salvation. I’m for the fare card idea, and think they ultimately will bring much needed efficiency. However, in the short term they will frustrate riders. Currently the Silver Line crawls to a halt, as each embarking passenger has to buy or replenish a card - because, in typical T fashion, there are no fare machines at the bus stops!