MBTA officials will announce Monday that they have cut the authority’s projected deficit by 43 percent, potentially allowing them to pump $100 million into much-needed weatherization projects and repairs to aging signal systems.
The rare bit of good news — the result of reduced spending on overtime pay and increased revenue from advertising and other sources — represents a boost for a transit system long plagued by budget problems and still struggling to regain public confidence after it was forced to shut down during last year’s massive winter storms.
But the improving fiscal outlook might also make it harder for the Massachusetts Bay Transportation Authority to convince critics that substantial fare increases, scheduled for a vote next month, are needed. The MBTA is proposing to raise fares systemwide by an average of up to 10 percent.
“It’s really good news,’’ said Kristina Egan, director of Transportation for Massachusetts, an advocacy group that has urged the MBTA to consider more modest increases. “There’s no need to raise fares above 5 percent when they’ve been able to achieve these savings.’’
T officials argue that, despite the brighter budget forecast, significant increases are still needed to help reduce a $7 billion maintenance backlog and improve the service on notoriously temperamental subway and commuter rail lines.
“Our message to the riders is we’re working really hard to control costs,’’ said Brian Shortsleeve, the MBTA’s chief administrator. “But the fare increase is important and will be invested into the system, and they will feel it over time, in a better system that gets them to work more reliably.’’
Officials say the deficit for the fiscal year that begins July 1 is about $138 million, down 43 percent from the $242 million gap that was projected last year.
They attribute the drop to increased revenue from advertising and real estate and reduced spending on overtime pay, materials, and services.
The elimination of late-night service — scheduled for a final vote on Monday — would save an additional $9 million next year.
“The deficit is still quite large, but it’s better, and an improvement in the right direction,’’ said Monica G. Tibbits-Nutt, a member of the MBTA’s fiscal control board. Still, she said, “we have a long way to go’’ to close the remaining $138 million gap.
“Is there some other way to do this, other than a fare increase? I think at this point, no, there isn’t,’’ Tibbits-Nutt said. “And then it becomes a discussion at what level to increase the fares.’’
The control board is considering two proposals: One would raise fares by an average of 6.7 percent, to generate $33 million. The other would increase prices by an average of 9.8 percent, to raise $49 million. A vote is scheduled March 7.
“A fare hike should be a last resort,’’ said Rafael Mares, an attorney at the Conservation Law Foundation, which is among more than 25 groups urging the board to limit increases to no more than 5 percent. “This isn’t a last resort.’’
But T officials say they could cut the deficit even further, to $87 million, if the board were to approve a 10 percent fare hike beginning July 1, offer incentives for early retirement to 300 employees, and allow taxis, Uber, and Lyft to pick up more users of the Ride, the MBTA’s door-to-door service for disabled riders.
The final $87 million gap, officials said, would be plugged if the Legislature, as expected, approves $187 million in state aid that Governor Charlie Baker proposed in January.
T officials said they would then use the remaining $100 million in state aid to begin work on several unglamorous but vital projects.
Those include $26 million to replace sections of the third rail on the Red Line and install more heaters on the third rail on the Orange Line, to keep the trains running during snowstorms.
The Worcester commuter rail line also needs $3.5 million in track work to ensure the rails won’t buckle in summer heat, causing slowdowns.
And the subway system needs more than $500 million in upgrades to its balky signals and switches, which officials blame for 30 percent of the delays on the Green, Red, and Orange lines.
“The number one piece of feedback we get from the riders is they want the service to be better,’’ Shortsleeve said. “The way you will improve the service at the T, long-term, is through this capital investment . . . which will make the trains run better.’’
Michael Levenson can be reached at mlevenson@globe.com. Follow him on Twitter @mlevenson.
