MTA Financial Contingency Plan Could Turn Hypothetical Service Cuts Into Reality

We all know how the story has gone so far. For years the MTA’s path to financial ruin has been aided by bad decisions & public officials who felt properly funding the agency was not a priority. For years this road has been covered up by black ice due to a windfall of profit from real estate among other areas. However we all know black ice while not visible is quite the slippery slope & this has played out exactly like one would expect. The good times have hit a snag & the MTA or more accurately the riding public is left in the middle of the wreck.

The wreck is the current budget deficit which seems to grow by the day with no end in sight. This road is filled with so many potholes that it has led the MTA to find ways to cut expenses by 4.5 percent. So you might be asking yourself, what exactly is new about this story? Well the new part is one I like others hate to have to report. If the MTA can not trim enough management level expenses, a logical candidate to make up the difference will be service cuts. William Neuman of the New York Times has more in this report which will appear in today’s print edition:

The Metropolitan Transportation Authority has begun exploring possible cuts in subway, bus and commuter rail service to shore up its budget in the face of a projected deficit next year of nearly $900 million, officials said on Monday.

The cuts could be necessary if the authority does not receive enough additional money from the state and city or if the economic crisis deepens significantly, the officials said. They cautioned, however, that any service cuts were purely theoretical at this point.

The authority has already proposed fare and toll increases that would go into effect next July, although it has not said how big those increases might be.

Gary J. Dellaverson, the authority’s chief financial officer, said that he had directed the heads of the agencies that make up the authority — including New York City Transit, which runs the subway and buses, Metro-North Railroad and the Long Island Rail Road — to come up with alternative budgets “in the event either the economy is worse than predicted, which is possible, or assistance from government partners in its entirety is not forthcoming.”

Jeremy Soffin, a spokesman for the authority, said that the agencies were told to explain how they would make cuts of 4.5 percent or so in their expenses. He declined to say how much that would amount to, but a 4.5 percent reduction of the total authority-wide budget projected to be $9.7 billion next year would equal $437 million.

“This is an exercise in case of a hypothetical situation,” Mr. Soffin said. “It’s very preliminary.”

The cuts are supposed to target management-level expenses first and then expenses that directly affect operations. That could include cuts to train and bus service, Mr. Dellaverson said.

“I think it’s fair to say that it will be difficult for agencies to find that much savings without affecting the service package,” he said.

Click here for the complete report.

New York Daily News Transit Reporter Pete Donohue also filed a report on this topic:

Doomsday plans that could include bus and subway service cuts are being drafted in case the MTA’s financial troubles worsen even more, officials said Monday.

Metropolitan Transportation Authority headquarters recently told its divisions to detail ways to cut spending by about 4.5% in the event the economy deteriorates beyond the MTA’s latest budget projections – or if city and state funding isn’t increased to levels sought by the MTA, Chief Financial Officer Gary Dellaverson said.

The MTA wouldn’t say how much money in savings is being sought in this latest budget directive, but using the authority’s preliminary 2009 budget, the sum can be estimated at more than $400 million.

“I don’t know what the outcome is going to be but I think it’s fair to say that it will be difficult for the agencies to find that much savings without affecting the service package …,” Dellaverson said after an authority finance committee meeting.

The savings are on top of more than $200 million in belt-tightening actions for 2008 and 2009 previously outlined by the MTA, including a limited hiring freeze.

Click here for the complete report.

Although the proposed service cuts (which have not reached the detailed stage) are hypothetical, it should strike fear into riders in the tri-state area. “Service Cuts” are the two words that will make any mass transit commuter cringe & who could blame them. This seriously needs to be a wake up call to any & everyone who depends on, is involved with, or both with mass transit in our region.

If the economy continues to spiral downwards & our elected officials don’t come through with the money the MTA & its riding public deserves, we will get hit with a double whammy like none other. We will not only have to deal with potentially multiple fare hikes, but service cuts on top of that. This could truly turn into a case of paying more for less & that is never a good thing.

So in the end will our elected officials like Richard Brodsky come through & help with funding or is it more of the same spin to look good while hanging the riding public out to dry? Time will tell but if you ask me, it is not looking promising for the good guys…

xoxo Transit Blogger

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