MA: Healey signs $1.3B plan to 'stabilize' MBTA

The state’s cash-strapped public transit system will receive a much-needed infusion of funding under a spending plan signed by Gov. Maura Healey on Tuesday.

The $1.39 billion supplemental budget, which passed the Democratic-led state Legislature with bipartisan support, taps into the “millionaires tax” to provide $535 million for the Massachusetts Bay Transportation Authority for improvements to its fleet of buses, subway cars and trains.

At least $175 million of the funding is earmarked for MBTA initiatives to comply with federal mandates to improve safety on the public transit system in response to fatal accidents, subway collisions and malfunctioning elevators.

Regional transportation authorities such as the Merrimack Valley Transit and Cape Ann Transportation Authority would receive a slice of $73 million in new funding for facility upgrades, workforce recruitment initiatives and other priorities.

The spending plan also includes $80 million in Chapter 90 funding for communities to upgrade and maintain local roads and bridges, including $40 million to help support small and rural communities by distributing funding based solely on road mileage.

Healey said the plan will make “transformative” investments in transportation and education that will help drive the state’s economy and improve quality of life for Bay Staters.

“This funding provides real fiscal stability at the T for the first time in decades,” Healey said Tuesday at a bill signing at the Statehouse. “And as this money enters the system, you will see continued improvement and service and reliability.”

In January, Healey announced plans to “stabilize” the MBTA’s finances and improve regional transit infrastructure by spending $8 billion over the next decade.

The plan, filed as part of her $62 billion budget proposal, called for tapping $765 million in Fair Share Amendment revenue as leverage for $5 billion in borrowing over the next 10 years to bolster the MBTA system.

But legislative leaders scrapped Healey’s borrowing plan and crafted their own plans to tap into revenue collected from the “millionaires tax”.

Both the Senate and House approved plans calling for spending a similar amount of surplus revenue from the 4% surtax on incomes larger than $1 million, but less than what Healey originally proposed.

A final version of the bill was hammered out by a six-member conference committee before it was approved by the full Legislature last week.

The MBTA faces a looming fiscal cliff with federal funding that helped the agency cover rising operating costs and lower fare revenue during the COVID-19 pandemic largely dried up.

MBTA officials estimated that – absent an infusion of hundreds of millions of dollars – the revenue shortfall could grow to nearly $1 billion a year by the end of the decade. Rising labor costs are expected to increase the T’s deficit.

Two weeks ago, the MBTA board of directors signed off on a $3.24 billion fiscal 2026 budget that increases total expenses by $222 million, or 7%, over the previous fiscal year.

Healey cited progress in improving the service and reliability of the MBTA system, including track replacement on the subway lines that was completed last year.

“For the first time in over 20 years, the T is running full speed, no slow zones on every line,” she said Tuesday. “Riders are saving a total of 2.4 million minutes every single workday.”

The supplemental budget signed by Healey also divvies up money from the surtax to fund education programs and initiatives, including $248 million for special education costs, including Circuit Breaker reimbursements to local school districts and $115 million for public college and university upgrades.

The spending comes as state budget writers say revenue from the “millionaires tax” is exceeding expectations, generating more than $2.43 billion in the previous fiscal year. Under the 2022 voter-approved law, proceeds from the surtax can only be spent on transportation or education.

“While other states are facing billion-dollar budget deficits that are forcing them to hike transit fares, slash public school funding and raise college tuition, we’re getting the T back on track and starting to rebuild our vocational schools and public college campuses,” Raise Up Massachusetts, a group that pushed for the “millionaires tax”, said in a statement.

“Every single city and town in Massachusetts is getting more money to pave roads, rebuild bridges and culverts, and fund local public schools, and regional transit authorities are receiving millions more to improve local bus service.”

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