MTA fares have climbed much faster than the inflation rate in recent years, and nearly all of the money generated by next years planned fare hike will be needed just to pay for existing projects and agency debt, according to a new financial analysis.
The state comptrollers annual financial outlook report on the Metropolitan Transportation Authority, released Tuesday, shows that although the MTAs budget has been looking better in the past two years, the financially plagued agency still faces big hurdles. Among them are the slow economic recovery, union negotiations and uncertainty surrounding its payroll mobility tax, which a state judge ruled unconstitutional in August. That ruling is under appeal.
While acknowledging those challenges, state Comptroller Thomas DiNapoli said the MTAs fare and toll hikes are a burden on working New Yorkers and should be a last resort.
His office reported that by 2015, fares and tolls will have climbed by 35 percent since 2007, while inflation during that same period has been about 15 percent. The MTA is planning 7.5 percent fare hikes next March and others in 2015 and 2017.
But DiNapoli said he doesnt expect the MTA to reverse its plans.
Given how fragile the finances are ... I dont think anybody's anticipating any immediate rollback on what theyve already built into their plan with regard to the toll and fare hikes, he told amNewYork Monday night.
In a statement, MTA chairman Joe Lhota said he appreciated DiNapolis thoughtful and thorough analysis of the agencys financial plan.
His report recognizes the significant financial challenges the MTA faces in the near term, the aggressive steps we have taken to meet them and our ongoing efforts to address longer-term challenges, Lhota said.
Bill Henderson, of the MTAs Permanent Citizens Advisory Committee, said it was sobering to see that the MTAs debt service will increase to $3 billion by 2016, even with higher fares.
The problem with borrowing huge amounts of money is that you have to pay them back eventually, and you have to pay them back with interest, Henderson said. Theres a big reliance on debt, and thats frightening.
The report also says that various cost-cutting initiatives are expected to save the MTA $1.1 billion annually by 2016. Nearly half that comes from overhauling how the MTA provides transit services for the disabled.