Cutting the state sales tax could force MBTA fare increases, service cuts, T advisory board says
The MBTA Advisory Board analyzes the potential impact of Question 3, which would cut the state sales tax from 6.25% to 3%, concludes passage and actual enactment would mean a big hit on the T, which now gets 57% of its revenue from state sales-tax revenue.
A portion of the sales tax is dedicated to the T; the board notes the T last year forestalled fare increases in part through additional revenue from the increase in the sales tax from 5% to 6.25%.
In addition to requiring fare increases and service cuts, the board writes passage could affect the covenants on bonds the state issued for capital projects that were based on the assumption they'd be repaid in large part through sales-tax revenue:
Any attempt to disrupt this framework could place the MBTA and Commonwealth in violation of its bond covenants, potentially triggering major and expensive legal action that could result in the seizure of assets.