Thursday, July 26, 2012

New York MTA unveils austerity budget

Written by  Luther S. Miller, Senior Consulting Editor

To achieve balanced operating budgets, New York Metropolitan Transportation Authority says it must aggressively cut costs and raise fares and tolls.

Despite the success of past cost-cutting efforts, MTA said it continues to face large out-year deficits caused by increases to non-discretionary expenses: pension obligations, employee and retiree health care costs, paratransit, and debt service.

"To help meet these growing expenses, the budget assumes a fare and toll increase in 2013 of $450 million on an annualized basis, and one in 2015 of $500 million annualized," said the agency.

MTRA said its 2013 Preliminary Budget, released Wednesday, "describes a fragile stability for the budget, and it assumes that four key components will meet current expectations: continued receipt of dedicated taxes as projected, continued success of the MTA's savings initiatives, three years of net zero labor cost increases, and continuation of biennial fare and toll increases."

"If those components hold, the MTA expects to virtually break even for 2012, with a positive cash balance of less than half of one percent of the operating budget, $46 million that will be rolled forward to meet expenses in 2013," said the agency.

"With continued success of its cost savings initiatives and three years of net zero labor increases, the agency projects a similar balance in 2013 and deficits of $129 million in 2014, $14 million in 2015, and $231 million in 2016," MTA said.