Oh, how I long for the days of yesterday when the news was simply about near-record ridership figures. Today’s news is bad, very bad.
With the economy slumping and ridership in 2009 on the decline, the MTA is now projecting a deficit for 2009 as high as $2 billion. Even with action out of Albany, the MTA is now planning on cutting weekend subway service no matter what. This, folks, is dire.
The bad news began on Monday with word that 2009 ridership totals were two percent lower than 2008 figures through this point last year. This marks the first time since 2003 that subway ridership has decreased.
Additionally, real estate tax revenues are already $75 million lower than expected. With the Dow closing at its lowest point since my sister celebrated her tenth birthday, the market isn’t going to help the MTA escape this financial crisis any time soon.
On the money front, William Neuman summarized the bad news: The MTA deficit could expand by $650 million this year. This increase would push the MTA’s deficit to nearly $2 billion. Relying on an informal budge assessment from MTA CFO Gary Dellaverson, Neuman writes:
Mr. Dellaverson said that revenue from taxes on mortgages and real estate transactions was $71.5 million in the first two months of the year, slightly less than half of what the authority had predicted it would receive when it made what it thought was a conservative forecast late last year.
That forecast called for the authority to receive $880 million in real estate tax revenue in 2009. But Mr. Dellaverson said that if the trend continued, the authority could receive $446 million less than predicted.
Mr. Dellaverson cautioned that the figures he was presenting did not rise to the level of a formal budget forecast. But the possibilities he sketched were grim enough. They included a $123 million decline in fare and toll revenue, below what was budgeted. And he said that state taxes receipts that go to the authority, including a sales tax and a corporate income tax, could be $82 million less than forecast.
Basically, Dellaverson’s informal calculations have the MTA owing well beyond half a billion dollars more than they were projected to owe when the Doomsday budget gained board approval last year. Even if the state legislature can somehow cover the original $1.2 billion gap, the transit agency would still be faced with a new and growing deficit that would need closing.
Enter weekend service cuts no matter what. According to Daily News beat writer Pete Donohue, New York City Transit will increase weekend headway on ten lines — the A, D, E, F, G, J, M, N, Q, and R — from eight minutes to ten. While NYC Transit President Howard Roberts defended this as an inevitable move spurred on by construction, MTA Board member Andrew Albert decried these cuts. “This is a major service cut for folks,” Albert said. “I think this is a terrible, terrible move.”
No matter how the officials slice or dice it, there is no way to spin this news. The MTA is facing a financial crisis of epic proportions. It’s one that could, if the worst comes to pass, trigger a monumental collapse of our city’s transit network — and thus its economic infrastructure. Right now, the MTA would need a full-scale bailout package and Mayor Bloomberg’s original congestion pricing plan to stay afloat, and that just isn’t going to happen.
Where this goes from here is anyone’s guess, but I don’t think this crisis has reached its nadir yet.
So now weekend service will be as bad as my weekday commute (9AM, Bay Ridge to Wall Street). Not a huge deal for me.
“New York City Transit will increase weekend headway on ten lines … from eight minutes to ten”
seems a slight thing.
Originally I thought that whole “Dow closing at its lowest point since my sister celebrated her tenth birthday” was a crack on your sister and I was all like “Oh, snap!”, but I think you were serious.
[…] New York City Transit announced that, due to construction and budgetary concerns, weekend service would be slashed no matter what. The cost savings for this move was set at around $4 million a year, and New York City Transit […]
[…] efforts out of the State Senate had yet to collapse, I noted that the MTA deficit may wind up higher than $1.2 billion. At the time, the MTA’s year-to-date tax revenues were well below expected, and the deficit […]