With the prospective toll hikes at the Pike taking all of our attention the dire financial condition of the M.B.T.A. has not received much attention lately. But we should all start paying attention, as the situation there goes from bad to worse. Yesterday’s Globe further detailed the woes, with sales tax revenue declining and debt payments gobbling up ever larger portions of the budget. From the Globe:

New financial setbacks and grim projections have observers inside and outside the Massachusetts Bay Transportation Authority worried about large fare increases and cuts in public transit service over the next 12 to 18 months. One watchdog says the agency is near bankruptcy.

The head of the MBTA advisory board estimates the agency’s deficit is on pace to hit $142 million in the 2009-2010 budget year, a year after budget managers depleted reserves and refinanced debt to stave off insolvency.

The sales tax decline impacts the MBTA because one penny of it is dedicated to the T. The decline may force Massachusetts to take $86 million in general tax revenue to bring the T back to last years level in the new budget. And even with that $86 million the T has court ordered pay increases, as well as other cost increases that will cripple its ability to even deliver todays level of services. Fare increases and service cutbacks loom on the horizon unless action is taken to relieve the MBTA of its crushing debt burden.

With all of this bad news the MBTA was looking to expand the Silver Line to the tune of about $1.5 billion dollars. The Federal Government refused to offer the requisite matching funds, as they do not believe the MBTA would be able to afford its share.

The Federal Transit Administration has also told state officials that the T’s finances are so poor that it will not qualify for federal matching money on its biggest expansion project – a $1.5 billion Silver Line bus tunnel – until it can prove the system can afford its share of the new project without short-changing bus, subway, and train service.

That project is gone, and should be gone until someone, somewhere explains how it will be funded. And it is more than a little disturbing that after the Big Dig planners would contemplate another project that requires tunneling under Boston and that serves Boston’s transport needs only. What about the rest of the State?

Michael Widmer called again for a comprehensive look at transportation.

“They’re effectively headed to bankruptcy, so they’re in desperate shape,” said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation and a member of that commission. “It makes no sense to deal with some major transportation reform and ignore the MBTA.”

Good advice Michael. Read the Globe story here.