Gov. Andrew Cuomo has, as feared, removed $100 million in dedicated funding from the MTA’s budget as part of his effort to close a state spending gap that reaches the billions. For the authority, this is the second year in a row that the state’s chief executive has striped money intended for downstate transit, and while the MTA says it will not raise fares this year, history is not on the agency’s side.
Basically, the net losses to the MTA will be $100 million overall but such a relatively slim cut was accomplished only through an accounting sleight-of-hand. Essentially, Cuomo is removing $200 million in dedicated operating funds and granted the MTA’s capital fund — with its $10 billion gap — a meager $100 million in economic development money. The loss to the operating side far outpaces the $143 million Gov. David Paterson removed from the budget in late 2009.
John Petro from the Drum Major Institute has some analysis. Despite the potential for another $194 million infusion in capital funding only, Petro warns of the looming spectre of future service cuts if operating dollars aren’t restored. He writes:
Essentially, Cuomo’s budget transfers money from the operating to the capital budget. Of the $200 million being cut from the operating budget, $165 million will be used to pay down the state’s past borrowing on transportation bonds. The remaining $35 million will go to the state’s general fund.
While it is essential that the governor and legislature find ways to fully fund the MTA’s capital program, which has a nearly $10 billion hole, taking critical funds used to maintain good service is not appropriate. Nor is $100 million, or even $294 million if the Bond Act funds are included, enough to begin plugging the capital budget hole.
The governor has repeatedly insisted that he would not raise taxes or implement new taxes. But without a new source of revenue for the capital program, there will be more pressure placed on the MTA’s operating budget. The MTA can trim its costs only so much before more service cuts or fare hikes are on the way. Some of these service cuts will only be slightly perceptible—dirtier train cars and stations, abandoned bus runs. If this trend of cutting operating funds continues, more severe service cuts will need to be considered.
In its own statement, the MTA pledged to avoid service cuts or fare hikes. The authority had said the same thing a few years ago, but in mid-2010, it was forced to axe two subway lines and countless bus routes. Here’s their statement:
We understand that the State’s fiscal crisis requires sacrifice from every area funded by the State, including the MTA. Because the MTA has already taken unprecedented measures to reduce costs, finding an additional $100 million in 2011 will be very painful, especially with sizable deficits still projected for 2012 and 2014. As we continue cost-cutting, further reductions become harder and harder to achieve.
But we must fill this gap, and we will fill it without resorting to fare and toll increases or service cuts, because our riders have already been hit with these painful measures over the past year. Instead, we will work to find additional cost-savings through efficiencies and improved productivity throughout our company. We are hopeful that this year we can work with our labor unions to find productivity improvements that protect jobs even as we reduce costs.
Making these cuts will be painful, but we can only spend as much money as we have. Given the financial pressures facing the State, local governments, and every New Yorker, our only choice is to manage the MTA so that every dollar counts.
The Straphangers Campaign, meanwhile, applauded the MTA for avoiding service cuts and fare hikes — or at least promising to — and urged the state to use dedicated transit money only for transit. “In the view of the Straphangers Campaign and many other groups, those funds should be used to meet transit needs. However, the MTA says it will not have to turn to service cuts or fare increases to make up the shortfall. That’s very welcome after an unprecedented three years in a row of higher fares – as well as last year’s service cuts, the worst in memory,” Gene Russianoff said in a statement. “The MTA says that it will have to take ‘painful’ actions. The Straphangers Campaign and other groups will monitor the agency’s response closely to see that the transit system has adequate resources to provide safe, reliable, well-maintained, secure and clean service.”
Transportation Alternatives was even more direct in its statement. “Governor Cuomo campaigned on restoring honesty and ethics to Albany, but when it comes to transit nothing much has changed,” Paul Steely White, the group’s executive director, said.. “Cuomo is taking dedicated funds away from the riders.”
It’s hard to take this as anything other than bad news. It’s not a surprise, and every agency in the state is suffering under Cuomo’s budget. But the MTA has had it bad lately, and if stations get even dirtier and personnel begin to disappear from those stations again, we’ll know why. This is Albany’s doing through and through, and now it’s up to the MTA to minimize the impact of these cuts.