In 1st report, MBTA control board says system's problems even worse than earlier feared

The financial and operational problems facing the Massachusetts Bay Transportation Authority may be even more severe than initially feared following crippling winter breakdowns, a control board said Tuesday in its first formal report since being created to oversee the Boston-area transit system.

"Without question, this report paints a bleak picture of the current state of the MBTA," Joseph Aiello, chairman of the Fiscal and Management Control Board, said in a statement. "But it provides the baseline we need to be able to move forward with actions to get the MBTA back on track."

The report said the T's budget was "broken" and that the system faced a structural deficit of $242 million next year, rising to $427 million in five years absent ever-increasing subsidies from state government.

Ridership on the system and total revenue were essentially flat over the past two years, while operating expenses grew 6.5 percent, according to the report. In the current fiscal year, expenses are forecast to top $2 billion, but revenues are expected to reach only $1.85 billion.

In addition to fares, the T gets a 20 percent share of the state's 6.25 percent sales tax and charges assessments to cities and towns that are served by the system.

Increased wages and benefits, along with escalating costs for commuter rail and services for disabled riders, were among key factors blamed for the budget gap.

The report also warned that the T lacks sufficient capital investment to chip away at an estimated $7.3 billion backlog in its state of good repair backlog, which is defined as the amount necessary to bring all of its vehicles and equipment into sound working order.

The system's aging infrastructure was exposed during a brutal stretch of winter earlier this year that resulted in massive equipment breakdowns, canceled trains and stranded passengers.

In April, a special panel appointed by Gov. Charlie Baker recommended formation of the five-member control board after declaring the MBTA was in "severe financial distress" with no viable maintenance plan.

"If anything, the (control board) has found that some of the underlying problems at the MBTA are even more serious and deep-seated than that panel was able to uncover," the board wrote in a letter to lawmakers accompanying Tuesday's report.

On a more upbeat note, the report pointed to progress being made on several fronts, including a winter resiliency program that officials hope will allow the T to withstand major snowstorms and cold snaps next winter.

The agency has also moved to better control spending on capital projects, the report said, and to reduce high rates of worker absenteeism that have been cited as the leading cause of missed bus and subway trips.

The board said it would issue a more detailed report in December with strategies for upgrading the system.