Home MTA Economics Early state budget cuts MTA revenues by $104M

Early state budget cuts MTA revenues by $104M

by Benjamin Kabak

As the first step in New York State’s complicated budget process, Gov. David Paterson unveiled his executive budget for fiscal year 2010-11 this afternoon, and the news is not good for the beleaguered MTA. The Governor will, on paper, increase the overall value of subsidies by approximately $161 million from FY2009-10, but in real dollars, the MTA may be short $104 million in 2010.

Basically, it comes down to a matter of projections. When the MTA planned its 2010 budget and when Albany passed the funding plan earlier in 2009, state tax officials projected certain revenue totals for the MTA based upon estimated tax intakes. Now, the state is saying these revenue totals will be $104 million short, and the MTA will face yet another year of fiscal crises.

MTA CEO and Chair Jay Walder issued a statement this afternoon:

The proposed Executive Budget Governor Paterson presented today reflects a further deterioration in the tax revenues dedicated to the Metropolitan Transportation Authority. This continued erosion of the MTA’s revenue base amounts to $104 million in this calendar year. We continue to be very concerned about the impact of current economic conditions on the revenues dedicated to the MTA, including the recently enacted payroll mobility tax. The continued uncertainty about the economy underscores the necessity of the course I’ve set for the MTA.

As I have often said, MTA must use every dollar that it receives from taxes, fares and tolls as efficiently and effectively as possible. That is why we are undertaking a fundamental restructuring of the way that the MTA does business. To that end, we have begun to dramatically reduce our administrative costs. We are renegotiating contracts with suppliers. We are re-evaluating how we provide service.

I know that the Governor and the Legislature are acutely aware of the MTA’s importance to the economy of the New York City region and the MTA’s positive economic impact on the rest of the Empire State. I appreciate that the Governor’s Executive Budget does not repeat the MTA cuts enacted in the Deficit Reduction Plan in December. During this budget process, we will continue to work with the New York State Department of Taxation and Finance to better understand the issues related to the dedicated taxes that support the MTA.

Meanwhile, the restoration of some subsidies seems to be a victory for the MTA, but even that is just spin from Paterson. Paterson is proposing to fund just $25.3 million of a Student MetroCard, and while that includes a restoration of $18.9, that’s barely half of the $45 million the state contributed in 2008 and prior years. MTA officials say the agency can reap over $200 million by charging fares and expects that much from the state and city to continue the free student transit program.

All in all, this is yet another transit funding mess. Last year’s funding package hasn’t delivered the funds lawmakers promised, and the MTA is left dangling from a fiscal cliff with no Richard Ravitch to step in and save the day.

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Boris January 20, 2010 - 12:24 am

Can’t wait for November. Since I don’t expect real competitive races in the State Legislature, it will be the first time I’ll be voting for a write-in candidate.

Don Anon January 20, 2010 - 1:04 am

A write-in candidate? Yeah, that’ll help.

Abba January 20, 2010 - 2:54 am

Richard ravitch can’t step in? Why not?

Scott E January 20, 2010 - 8:33 am

Sure he can — as Lieutenant Governor, Ravitch can step in if Governor Paterson is no longer able or willing to fulfill the duties of Governor. That’s how Paterson got the job in the first place. But there’s not much, ethically, that we can do to make that happen.

More money for the MTA, but at the expsense of NYC businesses :: Second Ave. Sagas | A New York City Subway Blog February 8, 2010 - 6:36 pm

[…] 2010-2011 fiscal year, it contained a shock for the MTA. Payroll tax receipts were project to be $104 million less than originally anticipated, and the MTA’s overall budget hole has grown to nearly $800 […]

MTA questions state after more hazy tax projections :: Second Ave. Sagas April 27, 2010 - 1:30 am

[…] have delivered bad financial news to the MTA. In January, state tax revenues were believed to be $104 million less than expected. This time, the MTA is started to question the state’s ability to calculate tax projections, […]


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