The MBTA deficit will be a problem for anyone elected this year
If you ride the T every day, you have probably noticed that the system feels different than it did a few years ago. Trains are more reliable than they were during the worst of the slow-zone crisis. The MBTA completed its 2024 Track Improvement Program, reducing speed restrictions. The agency has also been rebuilding its workforce after years of staffing shortages, hiring hundreds of new workers and budgeting for more than 8,000 employees recently.
That progress is real. But it is also fragile.
The MBTA is facing a structural operating deficit: the recurring cost of running trains, buses, ferries, paratransit, and commuter rail is rising faster than the recurring money available to pay for that service. The FY27 gap (the fiscal year that runs from July 1, 2026 to June 30, 2027) is projected at $648 million, and the FY28 gap is projected at $837 million unless state budget policy changes. This is from the MBTA Finance’s projection from January.
This is not an accounting problem. It is a service problem.
If Massachusetts does not provide stable operating funding, it becomes harder to plan in advance, to build what’s needed, and to run the transit system that we deserve.
How big is the deficit?
The immediate shortfall for FY27 looks like it’ll be covered. Governor Healey’s FY27 budget proposal and accompanying a supplemental budget that already passed would close that FY27 gap, but that doesn’t solve the $837 million that will be needed next year.
And that’s not the only problem. There is a reported a $24.5 billion repair backlog (as of 2023), meaning the system still needs major long-term investment even if the operating budget is balanced for one year.
Why did the deficit get worse?
The MBTA’s budget problems are not new. A decade ago, the agency was already struggling with not enough revenue to cover expenses. The pandemic made that long-running problem much worse.
Before COVID, fares covered a much larger share of MBTA operating costs. When ridership collapsed in 2020, fare revenue fell sharply. Ridership has been recovering, but it has not returned to pre-pandemic levels. The MBTA’s data shows total annual ridership falling from roughly 400 million trips before the pandemic to a much lower level in during the pandim, then gradually recovering through but still lower than before.
This has had an impact on the finances. The MBTA Advisory Board’s FY26 report showed that the amount of operational expenses covered by fairs dropped from 43% in 2019 to 16% in 2026. That’s revenue that has to come from somewhere else.
How has the state covered the deficit?
Massachusetts avoided immediate service cuts by using a mix of federal relief, state support, reserves, sales tax revenues, and Fair Share revenue. This last one was key, and an unseen benefit of the 2022 ballot question establishing a 4% surtax on incomes over $1 million dollars. This means that the MBTA’s operating budget in 2026 was almost 80% from the state, split between the sales tax and additional money.
What is the FY27 plan?
Governor Healey’s FY27 budget proposal would likely get the MBTA through the next budget year and I expect that this section will be preserved in the final version passed by the House and Senate.
To cover the deficit, the governor’s accompanying FY26 Fair Share supplemental budget would add $523 million in MBTA operating support and $121.7 million for a reserve to support workforce, safety, and reliability investments.
However, this relies heavily on the Fair Share revenues, which may not be there as much in the future. Because of the way that Fair Share was implemented, the first few years saw more money come in than had been expected, meaning that there was more available in FY26 and FY27 than there will be in FY28.
It could even be worse if there is a recession or a stock market drop. Fair Share revenues are much more volatile than other forms of taxation, so we cannot expect it to be the go-to solution in the future.
What happens next year
FY28 is the real test.
Even if the FY27 gap is closed, the MBTA projects an $837 million operating deficit in FY28.
If that deficit is not resolved, it could mean reduced service, with longer waits for trains, reduced frequency on bus routes, and delayed repairs.
If you’ve ever waited at Sullivan Square for the 89 or 101 bus on a Saturday with a cranky toddler, as I have many a time, you know that this is not just a minor inconvenience.
So this is the job of whoever is elected in 2026. They will take office in January 2027 just in time to start work on a budget that needs nearly a billion dollars (out of a total budget of about $63 billion) to cover just the MBTA’s bills.
That won’t be easy. But it also isn’t impossible.
The legislature next year should work to deliver a consistent funding stream for the MBTA as well as demanding greater accountability over how that money is translating into results for riders. There may be trade offs in terms of what services are expanded and which contracted, or other ways to gain new revenue.
But regardless of what path is taken, what matters is that people engage with the process.
The MBTA has launched Focus 2050 to guide long-term planning and TransitMatters has a parallel project called FRAME the Future.
Get involved. Learn more about the plans. And then next year, engage with your representative and senator about how we pay for the transit system we want to use.
