Tuesday, April 28, 2009

New York MTA budget deficit balloons

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The New York Metropolitan Transportation Authority says its estimated deficit for the current year has increased by $621 million since the MTA board approved a budget in December that was designed to close a deficit then projected to be $1.2 billion.

ravitch.jpgMTA said the additional shortfall, which it announced Monday, “is due to the continuing decline in the real estate and dedicated taxes that support the MTA, all of which are economically sensitive. In addition, increasing unemployment and higher fares led the MTA to predict a 7.2% drop in use of of its facilities in 2009.”

The higher fares, along with service cuts, are due to go into effect starting May 31. Expected to produce a 23% increase in revenues, they have been called a “doomsday” scenario that could be avoided only by a bailout from Albany.

That help was expected to come in the form of legislative approval of a rescue plan developed by a special commission headed by former MTA Chairman Richard Ravitch (center, with New York Gov. David A. Patterson, left, and New York City Mayor Michael Bloomberg). In a contentious legislature the Ravitch plan was all but batted down, and the search for a politically acceptable bailout has been ongoing.

Gov. Patterson and Assembly Speaker Sheldon Silver (lower right) sheldon_silver.jpgcurrently back a plan that would include the Ravitch-proposed new bridge tolls and payroll taxes imposed on employers in the MTA service area. The Transportation Committee voted Monday for an alternative plan, of which a key feature world be a $1 per ride surcharge on all taxi rides.

It may not have been timed that way, but MTA’s announcement of a worsening deficit will increase pressure on the legislature to do something fast if it wants to avoid the worst of all possible political scenarios—a voter backlash.