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Boston Transit Agency Privatizes Cash Operations

October 21, 2016

Officials overseeing a Boston, Massachusetts government-operated transportation agency voted to turn responsibility for some administrative operations over to a private business.

Officials overseeing a Boston, Massachusetts government-operated transportation agency voted to turn responsibility for some administrative operations over to a private business, after Massachusetts lawmakers declared their support for partial privatization.

The Massachusetts Bay Transportation Authority’s (MBTA) Fiscal and Management Control Board voted in October to transfer responsibility for handling cash over to a private security firm. State lawmakers had granted MBTA authority to explore privatization options in 2015.

Massachusetts lawmakers established a three-year period that allows for the privatization of MBTA by voting for a temporary suspension of the so-called “Pacheco law,” which requires any government privatization plan to receive prior approval from state government officials.

Massachusetts state Rep. Joe McKenna (R-Webster) testified before MBTA officials in September about the benefits of privatization.

McKenna says government agencies provide consumers with fewer services at higher costs.

“I feel that public agencies and bureaucracies are, by nature, relatively inefficient,” McKenna told Budget & Tax News. “They grow even more so over time. Privatization can only improve service and function while being significantly more cost-effective.”

Suggests Other Reforms

Laurie Belsito, legislative director for the Massachusetts Fiscal Alliance, a nonprofit think tank devoted to promoting “fiscal responsibility, transparency, and accountability in state government,” says MBTA officials are looking at other parts of the agency needing improvement, too.

“The MBTA’s Fiscal Management Control Board released an audit they had performed on the MBTA’s parts warehouse that brought to light the dramatic inefficiencies the warehouse operates under,” Belsito said.

Belsito says MBTA could become financially solvent within years, if lawmakers continue making reforms.

“The chief administrator of [MBTA] has been making tremendous headway with laying out a budget plan that focuses on increasing revenue while cutting costs with commonsense solutions that had been overlooked for years,” Belsito said. “There is a goal of having no budget deficit by 2018.”

Author
Jeff Reynolds writes for The Heartland Institute.