Behind PVTA’s debt: Regional authority grapples with shortfall at hands of Legislature

  • A PVTA bus makes a turn after a stop at the Hampshire Mall Thursday in Hadley. The regional transit authority is facing a $1.4 million deficit in this year’s budget. GAZETTE FILE PHOTO

Staff Writer
Thursday, August 03, 2017

Regular fare increases ensure that the Massachusetts Bay Transportation Authority, which oversees the buses, trains and subways that make up the T in the Boston area, has sufficient revenue for operations and capital projects.

But as the largest regional transit authority, or RTA, in the state, the Pioneer Valley Transit Authority, which serves 24 communities in western Massachusetts, has no such automatic rate adjustments.

State Rep. Peter Kocot, D-Northampton, said legislators learned this during recent discussions about whether the RTAs are receiving sufficient state funding and are capable of confronting anticipated shortfalls.

Northampton Mayor David Narkewicz, who serves as chairman of the PVTA Advisory Board, wrote in an email to the Daily Hampshire Gazette that PVTA fares, and potential increases, are often discussed by board members, who are committed to revisiting the issue again in the coming months.

“It is important to note, however, that fares represent only about 7 percent of PVTA operating revenue and the largely transit-dependent ridership who pay them are largely poor and working class,” Narkewicz said.

The PVTA is now facing a funding conundrum as the state falls short of promises made four years ago in a transportation financing bill, when the budget for RTAs was increased from $67 million to $80 million, and the PVTA’s portion increased by $4.8 million.

Instead, with state funding in fiscal 2018 at around $80 million, significantly less than the $86.2 million needed based on a continuous 2½ percent increase related to inflation and other factors, the PVTA is facing a $1.4 million deficit between the decrease in state funding coupled with rising costs and low fare revenue.

“I know they’re frustrated we’ve stalled and that we’ll lose a little ground this year,” said Senate President Stanley Rosenberg, D-Amherst, referring to the PVTA.

Current projections show that PVTA will have a $47 million budget in fiscal 2018, the same as the current year. But the agency needs a $48.2 million budget to maintain all services, based on cost increases related to fuel, health insurance and wages. State funding for the PVTA dropped by $600,000 from $23.5 million to $22.9 million.

To deal with the deficit, the PVTA recently announced that it is eliminating four of its 63 bus routes and reducing service to nine more, including the M40 that ran express service between Northampton and the University of Massachusetts and the Tiger Trolley that served South Hadley. Some portions of the routes will now be served by other buses.

The changes have reduced the deficit to $858,287. Another $100,000 will be taken out of the PVTA’s insurance reserve, and a request has been made by PVTA Administrator Sandra Sheehan that a further $432,305 be taken out of the transit authority’s restricted reserve.

Rosenberg said the Legislature made a multiyear commitment to annual increases that has not happened.

“That plan has stalled because of lack of revenues,” Rosenberg said. “We stalled on the funding plan we had for RTAs, pure and simple because three or four of the largest accounts are sopping up all the revenue.”

Those include MassHealth, which takes up 42 percent of the state budget and is absorbing virtually all new revenue, pensions and debt service, and local aid, which is needed so cities and towns can preserve services.

Rosenberg explained in fiscal 2015, the RTA caucus recommended $80 million and the Legislature funded RTAs at that level, and in fiscal 2016 the caucus recommended $82 million and the RTAs received that. But in fiscal 2017, the caucus recommended $84.1 million, and the Legislature provided only $82 million, and for this year the budget was recommended at $86.2 million, with only $80.4 million provided. Another $400,000 in spending was removed by Gov. Charlie Baker in veto.

As the largest RTA, PVTA gets about 28 percent, based on a formula that takes into account ridership, existing service and inflation.

Kocot said economic downturns have had impacts on all state programs and the gas tax referendum, which eliminated tying the gas tax to inflation, had an effect on all transportation needs, from potholes to public transit systems.

“We’re trying to get PVTA every possible revenue stream, trying to educate them about their relationship in the legislative process and keep us informed about any funding,” Kocot said. “We want to make sure we’re advocating for a sufficient amount.”

The Massachusetts Public Interest Research Group endorsed the annual 2½ percent increases to keep up with inflation and to expand service.

Matthew Casale, a staff attorney with MASSPIRG, explained that the entire deficit for PVTA would have been wiped out if the Legislature lived up to its obligation.

“At some point, we need to recognize not only the value that RTAs already provide, but the value that they could provide, and fund them accordingly,” Casale said.

‘Manage through it’

Transportation finance reform legislation in 2013, Casale said, requires all RTAs to have regional transit plans and identify where service improvements could be made. But the current funding levels have ended these efforts to maintain and improve service.

Because the state doesn’t have the resources, and there is reluctance by Baker and the House for broad-based tax increases, Rosenberg said it is incumbent on PVTA to identify plans to find resources.

“All agencies that depend on state support, they just have to manage their way through it,” Rosenberg said.

But Rosenberg added that PVTA, as the largest and most rural, could be hit hardest.

PVTA last sought a fare increase in 2012, when it was facing a $1.6 million deficit, but averted this adjustment when the state infused additional revenue for RTAs. The last fare increase was implemented in 2008.

The next major opportunity for new state revenue is the fair share or millionaire’s tax, coming to voters in November 2018 that would raise about $2 billion annually for the transportation and education sectors.

Kocot said he will support an override of Baker’s veto being planned by the chairman of the transportation committee, seeking to add $120,000 back to PVTA that was stripped out.

“We are ready to go whenever the vetoes are brought forth,” Kocot said.

Kocot said the legislative delegation in the Valley also sent a letter to Transportation Secretary Stephanie Pollard for getting a Congestion Mitigation and Air Quality $500,000 grant to support the P21E express route.

Rosenberg said the Legislature wants more public transit options for people, which reduce congestion on roads and brings the state toward goals of combating climate change.

Casale said despite the challenges, ridership has been going up, and to continue this trend public transportation needs to be frequent, convenient and reliable.

“But that will never happen if we continue to underfund RTAs,” Casale said.