Regular readers of Second Ave. Sagas know all about the MTA’s budget problems. As the authority has slashed subway lines and bus routes, raised fares, trimmed internal spending by hundreds of millions of dollars and fought to keep costs down, its money is drying up. Its capital plans can no longer be bonded out, and its operations budget is under attack in the form of assaults on the payroll tax. It’s only going to get worse.

In the new print edition of Crain’s New York Business, Erik Engquist and Jeremy Smerd ran down the challenges facing the MTA’s budget, and the picture they paint is a depressing one indeed. From Washington, D.C, where Republicans want to cut infrastructure spending to Albany where an austerity budget will leave the MTA with few capital dollars, the authority’s money is under assault. As I noted on Friday, the worst-case scenario could include 33-percent fare hikes. For New Yorkers who need transit, that’s a scary thought.

In three concise paragraphs, Engquist and Smerd delve into the budget battles:

The budget plan of Rep. Paul Ryan that House Republicans unveiled last week would cost the MTA more than $2.3 billion over 10 years in funding for rail and bus infrastructure and security projects, Rep. Anthony Weiner, D-Brooklyn/Queens, calculates. While that plan for 2012 is unlikely to pass, cuts in federal funding for the MTA appear probable.

A larger problem for the agency is that the last three years of its five-year, $26.3 billion capital plan have no state funding, and it’s unclear how it will be raised. Gov. Andrew Cuomo, who did not appropriate money for the capital plan in the new budget, has not said whether his no-new-taxes pledge applies to the MTA capital plan. Funding it from user fees alone would result in huge fare and toll increases. The MTA payroll tax imposed two years ago will continue for two decades but funds only the first two years of the plan.

Meanwhile, state Sen. Martin Golden, R-Brooklyn, intends to introduce legislation to eliminate the 50-cent surcharge on taxi rides that goes to the Metropolitan Transportation Authority’s operating budget. The surcharge brought in $81 million during the state fiscal year that ended March 31.

Now, these problems admittedly sound worse than they are. The federal government isn’t going to cut $2.3 billion from the start, but the MTA has come to lean on federal funds for major projects. The Fulton Street Transit Center has been funded solely through federal dollars, and while we can and have debated the wisdom of that expenditure, nothing would have happened in Lower Manhattan without federal money. Along the East Side and underneath the East River, the Second Ave. Subway and East Side Access projects are powered by large federal grants as well.

Hand-in-hand with those considerations are fears of inaction from Albany. How will Andrew Cuomo address the MTA’s capital budget? The authority’s current five-year plan, which includes the completion of both SAS and ESA as well as numerous station rehab plans, is funded only through this year. As April ticks away, no sign of action on this problem has emerged. The MTA will likely prioritize big-ticket items that have federal money (and thus require completion) over maintenance, and thus, the State of Good Repair will suffer further if Albany stays quiet.

And then finally, we arrive at Marty Golden’s latest plan to strip $81 million from the MTA. Is he aware that $81 million would lead to more subway and bus cuts? Golden, a Brooklyn Republican, is currently serving on the state’s Capital Program Review Board, and so he has — or should have — first-hand knowledge of the MTA’s fiscal woes. Golden has long opposed the cab fare surcharge on that grounds that it is just another tax on New York City residents that somehow winds up in upstate coffers, but it’s undeniable that the MTA needs that money. How will he replace it?

Times are tough right now for the MTA, and they’re only going to get tougher. The folks who end up losing the most though are riders who will wind up paying more for less. Without proper support, our transit system, our wallets and our city economy will suffer.

In a sense, the MTA is broke. It currently has a $10 billion gap in its capital plan, and it can’t bond out anymore. Without state intervention and funding, the authority’s revenue sources have run dry, and by all accounts, it will have no money for another five-year capital plan when the current one expires after 2014.

On the bright side, the MTA’s megaprojects are in no danger of being canceled. The 7 line extension has been funded solely through city dollars while enough federal money has been pumped into the Second Ave. Subway to keep it afloat. The Fulton St. Transit Center is being powered by stimulus dollars while East Side Access is simply too far along to cancel. But what of the future?

At Streetsblog yesterday, Noah Kazis pondered the MTA’s next few years, and the picture is not a pretty one. He writes:

Albany has twice passed up the chance to plug a major part of this gap by enacting bridge tolls or congestion pricing. Increasingly, it’s time to ask what happens to transit riders if legislators just don’t do anything. The options aren’t appealing: a $3.00 base fare or 1970s-style breakdowns and delays.

In one scenario, the MTA could decide that everything in the capital plan, from basic repairs to the system to megaprojects like the Second Avenue Subway, has to happen. In this case, they’d have to borrow the money to pay for the improvements up front. If the MTA borrowed all $10 billion, according to the state comptroller’s office [PDF], the MTA’s yearly debt service obligations would soar even higher than they are already projected to. In 2010, debt service cost the MTA $1.9 billion. If the capital plan is paid for by borrowing, by 2019 debt service would total $3.9 billion.

To pay for all that extra debt, the MTA would have to increase its yearly revenues the only way it can, by raising fares and tolls. According to Neysa Pranger of the Regional Plan Association, the MTA would need between $1 billion and $1.5 billion in new annual revenues to pay for $10 billion in bonds. The 7.5 percent fare hike scheduled for 2013 — that’s on top of this year’s equivalently sized hike — is predicted to raise around $460 million a year, according to the comptroller’s report. Based on that number, it will take roughly a 24 percent fare hike to get $1 billion in new revenue and a 32.25 percent hike to reach $1.5 billion.

Kazis sees a world in which 30-day unlimited cards cost nearly $140. It was bad enough a few days ago when I had to buy a new triple-digit MetroCard. If the prices go up even more, it simply becomes a greater drain on the wallet.

Of course, this analysis isn’t new to anyone who’s followed along over the past few years. City and state politicians have routinely ignored the MTA’s fiscal pleas. It may be tough to take seriously an organization with four decades of financial ineptitude behind it, but the State Senate approved Jay Walder with the understanding that he knew what he was doing. Now that the true picture has emerged, it’s not a pretty one for a state nearly bankrupt.

So what’s the answer here? As always, we have two choices. Either New Yorkers — the five million who take the subway every day — will see their annual commuter costs increase drastically over the next four years or the city begins to levy a fare on those who choose to eschew mass transit. We can charge drivers for their bridge usage; we can bump up on-street parking rates to better reflect market prices; we can levy fees on congestion-causing activities that drag down the region’s economy.

Ultimately, the debate sounds the same after a while, but as city politicians argue over a 17-block bike lane on Prospect Park West, the mass transit system that powers New York slides ever backwards. Streetsblog says they will soon look at a system plagued by deferred maintenance and unreliable service. Anyone old enough to have lived through the 1970s and early 1980s knows what that means, and what that means is higher costs for everyone, congestion pricing or not.