Home MTA Economics With money tight, MTA gears up for ‘hypothetical’ cuts

With money tight, MTA gears up for ‘hypothetical’ cuts

by Benjamin Kabak

Facing a budget deficit of nearly $1 billion and with no relief in sight, the MTA is preparing an agency-wide cut of 4.5 percent. While officials say they will cut management costs first, if enough money can’t be trimmed, the agencies will be forced to cut operations costs, which, in plain English, means subway, bus and rail service could face the axe.

William Neuman of The Times has more on this dismaying but unsurprising news:

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…

Gary J. Dellaverson, the authority’s chief financial officer, said that he had directed the heads of the agencies that make up the authority…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.”

While everyone at the MTA stressed the hypothetical nature of this exercise — Doreen Frasca, head of the MTA Board’s transit committee, hopped on that bandwagon too — it’s hard to feel too good about it. New York has yet to experience the economic fall-out from the recent collapse of the investment banking business, and tax revenues — and thus city and state contributions to the MTA — are sure to be down.

Meanwhile, these hypothetical cuts do not preclude a fair hike. So, in other words, we could be in for both another fare hike in 2009 as well as across-the-board service cuts. Clearly, that’s not news anyone in New York wants to hear right now.

As riders, our options are limited. The best we can do is lobby our elected representatives and urge them to find more money for the beleaguered transit agency. Since voting them out of office didn’t pan out, our options are severely limited. Maybe now will be a good time for the MTA to ask Richard Brodsky for some money. After all, he promised them funds last July if only they would ask.

In the end, though, I bet the rest of us, through service cuts and fare hikes, will have to pay. That, sadly, is the way of it in New York City these days.

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eric September 23, 2008 - 7:23 am

The way the MTA is structured wihtin they have tons of waste. The MTA acts as separate companies under one name. NYCT, Metro North, LIRR, LI Bus, Staten Island RR, and Bridges & Tunnels all act independently.

The MTA could save millions of dollars by combining the duplicate jobs like human resources for example. They could also save by ordering there uniforms and office supplies as ONE but they don’t because LIRR and Metro North feel that they are above using the same quality items as Transit instead use much better quality uniforms and supplies!!!

Scott E September 23, 2008 - 8:20 am

Good point Eric. Step One is to reduce management costs, and the way they try to accomplish that is to delegate that responsibility directly to those redundant managers. MTA, the parent agency, needs to tackle some of this rather than pass the buck on to the subordinates.

Strangely, MTA Capital Construction was not mentioned in the article. They don’t provide service, per se, but they probably gobble up the most money. Are East Side Access, Second Ave Subway, 7 Line Extension, and Fulton Street Transit Center all supposed to chop 5% across the board? I wouldn’t bet on that happening.

On a different, but related note, I wonder how much the MTA pays out in lawsuits, and how that number compares to “deferred maintenance”. We saw a scathing article yesterday in amNY about the sad state of platform edges, we’re all to familiar with passengers being swallowed by the gap on LIRR (or at best, passengers losing their pants to the armrests).

Marc Shepherd September 23, 2008 - 9:01 am

Strangely, MTA Capital Construction was not mentioned in the article. They don’t provide service, per se, but they probably gobble up the most money.

Are you kidding? MTACC isn’t even 1% of the MTA budget. Look it up.

ScottE September 23, 2008 - 9:11 pm

You may be right, and if so, I stand corrected. I look at the massive costs of these mega-projects, and find it hard to believe that this isn’t the first place that cuts would come from.

Then again, the MTA’s web site says that MTACC manages these projects, but they don’t necessarily fund them. I’m confused.

eric September 23, 2008 - 12:30 pm

It’s time to break up the MTA!!! They are a rogue agency that answers to nobody.

The NYCT branch brings in the majority of revenue for the agency from the subways and buses but they get short changed supplementing the LIRR and Metro North.

Nathanael Nerode September 30, 2008 - 4:43 am

It’s critical not to cut maintenance, or capital programs which are designed for replacement and repair. (Also critical is the 2nd Avenue Subway.) Deferred maintenance is a complete disaster.

Perhaps they will finally have a chance at merging the LIRR and Metro-North now that the LIRR union has been completely discredited? The LIRR union was one of the main reasons the very obvious money-saving merger was killed earlier.

Streetsblog New York City » Is It Time to Swap the 2nd Ave Subway for Bus Rapid Transit? April 12, 2011 - 2:14 pm

[…] and with the MTA cutting capital projects, struggling to maintain existing infrastructure, and pondering cuts in service, is it time to consider shifting capital resources toward a true BRT […]


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