Fare Hike Averted

Turns out the T doesn’t need a fare hike this year after all!  Last month the T announced that it would increase fares again — subway fares would break a 28-year inflation-adjusted record to set an all-time high of $2 per ride.  Around the same time, I noted that the last two occasions when fares broached the inflation-adjusted $1.75 mark, strange things happened.  Fare increases implemented in 1954 and 1981 that took prices over the inflation-adjusted $1.75 mark were rescinded the next year.  Those were the only two years in more than a century of transit in Boston that nominal subway fares actually receded.

Looks like history is repeating … or at least rhyming.  Gov. Patrick directed that the proposed 2009 hike is off the table, for now.  Hopefully major service cuts also were averted.  If the consensus economic view is correct that inflation will remain subdued for some time — and assuming the inflation-adjusted fare of $1.75 remains the third-rail of subway pricing — that proposed hike won’t be finding its way to riders anytime soon.

Grabauskas Retrospective; What Now for T?

Say what you will about Dan Grabauskas; he is a political survivor.  The public servant who reformed the Massachusetts Registry of Motor Vehicles resigned under pressure from Governor Patrick and his appointee James Aloisi today, nearly a year short of the end of his five-year term as general manager of the MBTA.  The Democratic governor will have his chance to appoint a successor, but the bitter partisan flavor probably will linger with voters for some time.  The tab for buying Gov. Patrick an extra nine months of direct control of the MBTA: $327,487.  I hope that turns out to be a good investment, but at the moment it’s not so clear that Messrs. Patrick and Aloisi gave taxpayers a good deal.

In 2005, Grabauskas took the job of general manager with a clear vision.  The T would treat riders like customers; the system would be reliable, clean, courteous, and safe.  But mainly clean.  And accessible; inaccessibility “impacts not only on the disabled, but on parents with children in strollers, as well.” Grabauskas professed to be a neatnik; he was particularly concerned about the condition of elevators and escalators.  He apparently believed that if he made the T a comfortable place to be, riders would flock and revenues would soar.  And, of course, he wanted to control costs.

So four years later, how did he do?

Grabauskas never shrunk from the gaze of his “customers,” for example writing a regular Q+A column in the free daily paper Metro, and appearing more than once on WBUR public radio.  He was determined to keep riders safe; he initiated random, highly visible police screening checkpoints.  He committed to spending hundreds of millions of dollars to make the T more accessible, installing announcement screens and elevated platforms on the Green Line.  He resisted union contract demands and agreed to wage increases only after being overruled by a labor arbitrator.  The T renovated the Charles Street station and installed a new train control system on the Red Line that permitted more frequent service.  And there is the electronic fare system.

The list goes on.  Grabauskas was nothing if not engaged in the goings-on at the T.  Perhaps one can disagree with him on policy matters — for example it might be reasonable to question the wisdom of a having a broke organization with heavy capital needs spend hundreds of millions of dollars in an effort to meet the unique requirements of less than 0.1% of T riders — but the man demonstrated integrity and dedication to his “customers.”

But many things never changed.  Yes, the trains still are slow and late.  Yes, the escalators have at times been scandalously unreliable.  Yes there still are door-openers on the  Red, Green, and Orange Lines.  Yes, Kenmore Station still is under construction nearly five years later.  No, Dan Grabauskas does not commute to work on the T.  Yes, the T still is broke.

No Cell Zone

No Cell Zone

But none of those were the reasons that Governor Patrick and his appointees gave for the reasons they had lost faith in Grabauskas.  The breakdown occurred, they said, because two Green Line drivers in two years apparently had ignored traffic signals for different reasons, and Grabauskas was not in Washington, D. C. when the NTSB released its report on one of the accidents.  And there was a power outage on the Green Line.  That’s it.  Never mind that Grabauskas nearly overmanaged the aftermath of the Government Center Green Line collision by banning cell phones from drivers.  And never mind that he was on an unpaid budget-related furlough at the time the NTSB report was released.  And never mind he is not the T electrician.

No matter; Grabauskas is out, but to Gov. Patrick’s likely chagrin, the former T general manager emerges from the tussle virtually unscathed.  That isn’t true for the Governor and his appointees.  The termination looks like short-term political retribution — at taxpayers’ expense.

Unfortunately, the real loser here looks to be the T.  The authority is leaderless at a critical time where the patchwork of agencies is being reexamined and when the modes of transportation finance are in flux in a way they have not been in memory.  The Governor has made noises time and again that he is a friend to transit.  Now he has an opportunity to go from words to action.

Modest Proposal: Roll Back the MA Gas Tax to 1999 Level

Last week the President of the U.S. Chamber of Commerce urged the nation to raise the gas tax.  The Chamber reasoned that the federal gas tax is too low because it was set years ago as a fixed number of cents per gallon; inflation has eaten away much of its value.  A higher gas tax would make more funds available to pave the nation with asphalt, and it would create greater incentives to avoid inefficient energy use.  You can guess which benefit the Chamber is more interested in discussing (hint: it isn’t conservation).

In addition to the federal tax, many if not all states assess an additional local tax.  In Massachusetts, the state part of the tax is a 21-cent surcharge per gallon of gasoline.  But that method of calculation is new.  From as early as 1949, Massachusetts assessed the tax as a percentage of the cost of wholesale gasoline, rather than by the gallon.  As a result, the tax kept pace with inflation, unlike its federal counterpart.  The system worked because when prices increased with inflation, so too did the total tax collected.  The initial tax rate was 10%; in 1991 it increased to 19.1%.

Then in 2000 the Cellucci administration, in a moment of weakness, addressed rising gasoline prices by converting the flexible 19.1% tax into a flat 21-cent surcharge per gallon of gas.  It was an obscure change with dramatic results.  For the rest of the decade, the tax lagged significantly behind inflation and coffers ran dry of money that might have been used for transportation purposes.

If the gas tax today was calculated the same way as in 1999, the current rate for the gas tax would be about 30-cents per gallon.  That’s 9 cents per gallon more than the current tax.  (The official wholesale price of a gallon of gas was $1.57 in the last month for which the figures are available (April)).  But unfortunately the change was made in 2000 and we’re still suffering the impact; transportation revenues have not kept pace.

Recently, the Governor proposed a 19-cent increase in the gas tax, to 40 cents per gallon.  The Massachusetts Senate characteristically dismissed the idea of an increase saying the Legislature had voted against it.  The Governor and the Legislature obviously realize that the Commonwealth needs to raise more money to maintain the existing level of services.  Toll hikes and increases in the gas tax apparently have been ruled out.  Only an increase in the statewide sales tax– which doesn’t apply to gasoline– has been approved; one wonders about the equity of taxing everything except transportation to fund transportation needs.

So here’s a modest proposal.  Why not roll back the gas tax to 1999 levels … and once again calculate the tax as 19.1 percent of the wholesale price of gasoline (30-cents per gallon in April).  Throw out the flat tax of 21 cents per gallon.  The proposal would allow the Governor to raise additional transportation funding from a source other than general funds, and the Legislature credibly could claim that it acted responsibly to undo a heedless stealth tax cut that was implemented in the hazy days of 2000.  A functional 9-cent per gallon increase in the tax would fall roughly at the midpoint of the Governor’s proposal (19-cent increase) and the Legislature’s proposal to do nothing.  And the old method of computing the tax naturally keeps pace with inflation — meaning the tax won’t need to be revisited for some time.

So how about it?  Why not revert to a formula for the gas tax that served the Commonwealth well for about fifty years: switch back to calculating it by percentage of price, rather than per gallon.