13 March 2009

MTA Warns ‘Doomsday’ is Approaching.

If no rescue plan is adopted by March 25, the agency said it will begin laying the groundwork for fare increases, service reductions, and job cuts.

Crains NY
March 13, 2009. 3:13 pm
by: Matthew Sollars

The Metropolitan Transportation Authority said on Friday that it will start to implement its “doomsday” budget on March 25 if the state Legislature does not pass a financial rescue plan.

The proposed budget would include fare increases of up to 30%, the elimination of some subway and bus lines, and layoffs for up to 1,100 transit workers.

A plan to stave off those increases was proposed in December by former MTA chairman Richard Ravitch. His plan calls for tolls on the Harlem and East River bridges and a payroll tax on all companies in the 12-county MTA service area. The idea has stalled in Albany, largely over opposition to the tolls. Legislators have also questioned the MTA’s finances and whether the agency’s deadline is real.

MTA Chairman Dale Hemmerdinger made clear that while fare and service changes would not take effect on March 25, the agency needs to begin planning for them in order to finish the year with a balanced budget.

This is not an artificial date,” said Mr. Hemmerdinger. “What our numbers showed is what we need to do to balance the budget by the end of the year, as required by law.

Moreover, the MTA argues that without passage of a long-term financing plan, drastic cuts this year would only be the beginning. The agency estimates that even with the 30% fare increase and service reductions the system would run into another $300 million deficit next year.

The pain that we see now is only going to get worse if the Ravitch plan is not adopted,” said MTA board member Allen Cappelli. “It’s time for the Legislature to demonstrate the leadership for which they were elected.

Elliot Sander, the MTA’s chief executive officer, said state legislators faced a choice between continuing deficits for a shrinking transit system and a way to ensure stability and growth.

If the Ravitch Plan is not adopted, we’ll be back here next year looking at a deficit that will be even greater,” said Mr. Sander.

Transit advocates were out in force at the hearing to call on the state senate—and especially Queens Democratic Majority Leader Malcolm Smith—to act.

Gene Russianoff, the president of the Straphangers Campaign, cited 14 bus lines in Mr. Smith’s district that would be eliminated if the cuts go through and urged transit riders to lobby their legislators.

Call now or pay later,” said Mr. Russianoff.

"Our members appreciate the severity of the MTA's budget shortfall and our conference continues to work to address that while protecting taxpayers and straphangers," said a spokesman for Sen. Smith.


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