Thursday, May 07, 2009

NYMTA “rescue plan” may not meet vast capital needs

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A “rescue plan” for the deficit-plagued New York Metropolitan Transportation Authority finally emerged from the state legislature Wednesday night, but critics immediately assailed it as clumsy to execute and insufficient to meet the authority’s capital needs.

new-york-mta-logo.jpgThe financial package approved in Albany would generate an estimated $1.9 billion a year for the MTA, which originally said it faced a $1.2 billion budget shortfall but recently increased that figure by $621 million. It would only partially finance the agency's current $15 billion capital program.

The strongest appeal of the plan is that it would avoid much of the “doomsday scenario” that MTA has been ready to implement—a  23% increase in revenue derived from fares plus deep service cuts. The plan envisions that the basic New York City Transit fare of $2.00 would not rise above $2.25 vs. the $2.50 planned by the MTA, and the worst service cuts would be avoided.

The “rescue” package consists of taxes and fees that include 50-cents-per-ride surcharge on taxicab fares—raising the question of how such a fee would be collected—plus the long-debated  payroll tax to be imposed on employers in the  14 counties served by the MTA’s subways, commuter railroads, and buses.