need a primer on forward funding
January 18, 2012 2:51 PM   Subscribe

Can someone give me a quick primer on the MBTA debt crisis?

I'm trying to make a case that debt forgiveness is a higher priority than a gas tax, but don't know enough about how that debt is packaged to be really solid on why that's true. My gut sense that it's the interest from the Big Dig, rather than the initial assumption of debt. That said, I'm fuzzy on the details of who holds the $8 billion and counting, and how it's been transferred and moved around. I've read this and this, as well as a number of articles, so I have a rough sketch. I'd be grateful if someone here could help me fill in the details!

also helpful: is there somewhere I can go to get a rundown of the 2000 forward funding legislation?
posted by puckish to Travel & Transportation (2 answers total) 3 users marked this as a favorite
This is a good place to start.

See also this (part III in a multi-part Boston Magazine article.

TL;DR Summary of Forward Funding:

"FLAWED FUNDING FORMULA Legislators anticipated that revenue from the sales tax would grow at 3 percent a year. That wasn’t an outrageous idea; it had gone up at an even higher rate in the 1990s. To enact forward funding, lawmakers dedicated one penny out of every 5 cents of the sales tax to the MBTA. But — and this is a big but — legislators never accounted for the possibility that healthcare, fuel, energy, or, really, any costs at all might ever increase. They also didn’t adequately prepare for future T expansion — not even for projects then mandated by Beacon Hill. To make matters worse, some $3 billion of preexisting debt was piled onto the system — including $1.67 billion in borrowing related to the Big Dig that had less to do with the T and more to do with political horse-trading."
posted by Wretch729 at 4:45 PM on January 18, 2012

These folks are working on fighting the funding cuts, and have links to other groups doing the same. They skate pretty quickly over the source of the funding problems on the page I linked to, but I'd guess they or one of their partners have more information.
posted by ldthomps at 9:53 AM on January 20, 2012

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