MTA Faces Severe Financial Woes
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After announcing that another hike in subway and bus fares is possibly in the works, the MTA is trying to deal with its severe financial troubles. NY1’s Transit reporter Bobby Cuza filed the following report.
MTA executive director Elliot Lee Sander used dramatic language this week to talk about the transit budget crisis, saying the MTA was "a financial basket case," and that its budget deficit next year could grow as high as $700 million, largely due to a huge drop-off in tax revenue from real estate transactions.
"Basically the real estate revenue fell off of a cliff at the end of March. We didn't anticipate that," said Sander.
While headlines this week focused on a possible fare hike next year, which would be the second year in a row, Sander insisted that the news is premature.
"If there is no support from Albany, then the MTA only -- by law, which has to balance its budget, is to either increase fares or reduce service," said Sander.
Another factor driving the deficit, in addition to the loss in tax revenue, is rising fuel prices, which the MTA expects to run about $70 million over budget this year.
Transit advocates forecast the budget gaps will only worsen in future years, as the agency struggles to pay off billions of dollars in debt.
"The agency borrowed an incredible sum of money, and the bills are coming due. The single largest growing expense in the MTA is debt service," said Gene Russianoff of the Straphangers Campaign.
Rider activists like Gene Russianoff blame Albany, which has slashed MTA funding over the years.
Governor David Paterson formed a commission to come up with new funding solutions, with former MTA chairman Richard Ravitch as its chair.
"Clearly, the need for money for the mass transit system in New York is real. And the amount required is very, very serious," said Ravitch.
While the MTA’s growing budget deficit is real, any decision about a fare hike is still a long way off. While the MTA may raise the possibility of fare hikes when it releases its preliminary 2009 budget next month, any decision about fare hikes won't come until December.
- Bobby Cuza