Along with everyone else, the MTA is trying to stave off financial doom. Unlike with Lehman Brothers and the other failed financial institutions, though, the MTA’s fiscal troubles stretch back decades, and the transit agency has been trying to come up with a fix long before Wall St. headed south last month.
For the last few months, Richard Ravitch and his commission have been trying to assess the MTA’s financial situation. The panel’s recommendations are due in approximately six weeks, but it may be too late to solve some of the MTA’s more crushing problems before the agency must adopt a strict budget with cuts to services — but not, as far as I can tell, cuts to train and bus service quite yet.
William Neuman, writing in today’s Times, has more on this alarming story:
When Gov. David A. Paterson created a commission last spring to recommend a solution to the Metropolitan Transportation Authority’s financial troubles, the panel’s head, Richard Ravitch, a respected former chairman of the authority, quickly took on white knight status, with officials and politicians hoping he would ride in before the year was out to save the authority from disaster….
But the stock market’s troubles and the global banking crisis have accelerated the authority’s financial slide to the point that officials are now working to carve deeper cuts in their budget plans for 2009. And it appears likely that there will be insufficient time for the State Legislature to act on the Ravitch commission’s proposals, meaning the authority will be forced to adopt an austerity budget with both service cuts and fare increases by late December, an official said.
Further, because of sharply falling revenues, an even larger increase in fares and tolls might have to be considered than in the authority’s earlier budget plan, which called for an 8 percent rise in revenues from those sources, the official added. All that sets the stage for a winter of wrangling among the governor, the Legislature, the mayor and authority officials, who will be under intense pressure to rescue the region’s mass transportation system.
“We clearly are going to be laying out some very painful stuff,” MTA CEO and Executive Director Elliot Sander said to Neuman. “We are going to have to balance the issue of fare increases and service cuts and also see how we can cut our budget further. Those are the three pieces to the puzzle and we’re just in the process of dealing with those trade-offs.”
From what I’ve heard, the MTA is loathe to cut actual service, and when The Times and officials start talking about “service cuts,” everyone gets worried. In reality, the first services to go will be bureaucratic in nature followed by maintenance and cleaning staff. Only after the agencies are pared to their bare essentials will the MTA brass consider reducing the frequency of trains.
But the MTA and New York City can ill afford these cuts. In a bad economy, the government should be investing in its infrastructure. Spending on the subways could spur on job growth and economic development in areas awaiting investment. Ensuring safe, reliable and steady access to the city’s core business areas via public transportation is just as important for the region’s economic health as anything else.
In the end, we’ll have a clearer picture of the MTA’s short-term financial outlook when Ravitch drops his report during the first week of December, but early signs are not favorable. It could be a cold winter for the MTA.