Massachusetts transportation managers seemed to pull another rabbit out of the hat when the most recent chapter in the ongoing drama of MBTA budget woes ended with relatively minor service cuts and fare hikes that aren’t as steep as had been contemplated. But with $8.6 billion in debt and a $3 billion maintenance backlog, those managers are the first to say that the T will be right back in the budget soup again next year.
And the MBTA is just the latest piece of the Massachusetts transportation system to face financial meltdown. Before that there was an emergency program to address the deteriorating condition of our bridges. It is a trend that will continue until we adopt a sensible means of allocating and pricing transportation capacity.
Several transportation professionals have compared our transportation network to Garrett Hardin’s common pasture. It’s a worthwhile analogy.
In Hardin’s pasture, local farmers graze their cows for free. Not surprisingly, each grazes as many cows as s/he can on the pasture because it results in increased milk production at no additional feeding cost.
All is well until the number of cows exceeds the pasture’s feeding capacity. Because the cows get less nourishment, their milk production declines. Yet the farmers’ response is to add even more cows to the now barren pasture.
And so it is with our transportation system. Fuel taxes don’t nearly cover the cost of building new roads and maintaining the ones we have. Other than fuel taxes, the vast majority of roads are free.
Riders pay to use the MBTA and other transit services. But unfunded expansion has left the T owing so much that fares barely cover what it pays in interest on its debt. Yet the clamor is to build more roads and transit lines. When we do, we too often budget based only on the cost of construction, without taking operating and maintenance costs into account.
Pricing is the key to a functioning and sustainable transportation network. Revenue is needed to operate and maintain the system, and also to build new assets when needed. Fares and tolls also help regulate demand, avoiding the consequences of overuse that rendered Hardin’s pasture barren. The goal should be to price each transportation asset based on the value it provides to customers. Doing that effectively is the essence of good management.
A logical pricing system also provides the framework for debates about whether to expand capacity. If toll revenue in a particular area is robust, perhaps new capacity should be considered. If it’s determined that expansion is the best option, toll revenue offers a rational way – as opposed to just borrowing more, like we now do – to pay for it.
And paying for expansion doesn’t just mean the cost of building a new road or transit line; it means covering the cost to build, operate and maintain the asset over the course of its useful life.
Nobody wants to pay more, as Gov. Deval Patrick learned when his proposed a gas tax hike was largely ignored in 2009. But as the MBTA teaches us, the commonwealth’s current transportation system which is in shambles due to an unwillingness to face up to actual construction, operation and maintenance costs – simply isn’t sustainable.
Stopgap measures like those being employed to keep the MBTA afloat don’t solve our transportation problems. In fact, they make the problems worse. Next year, the T’s budget crunch is likely to be even more severe.
Perhaps by then voters will see that a rational pricing system is far less painful than dealing with the fallout from massive debt and maintenance backlogs. If they don’t come to that realization soon, inexorable decline will produce a transportation network that looks eerily like Garrett Hardin’s common pasture.
originally published: April 26, 2012