MTA faces budget gap of $3 billion

By Matthew Sweeney | msweeney@am-ny.com

May 1, 2008

Rising construction costs have eaten away at the MTA's current capital budget, leaving a gap of up to $3 billion for basic repairs and service, officials said Wednesday.

"The [CAPITAL] program has some shortfalls in it," Metropolitan Transportation Authority CEO Elliot Sander said at an agency board meeting. "We will not be able to fund all projects in it."

The MTA is currently working out details on the amount of the shortfall and where potential cuts will come, Sander said. While mega-projects like the Second Avenue subway are not affected, the "nitty-gritty" work of station repairs and upgrades, signal replacements, or purchase of new cars could suffer, said MTA spokesman Jeremy Soffin. Nothing will be impacted before summer.

NYC Transit's share of the $21 billion capital budget for 2005-2009 is $11.3 billion.

The MTA should know by summer the extent of the budget gap, Soffin said. In the meantime, the agency is waiting on recommendations from a special panel, created by Gov. David Paterson and headed by former MTA Chairman Richard Ravitch, tasked with identifying new or additional funding for the agency. Ravitch has not given a timeline for releasing recommendations.

If the agency can identify new sources of funds going into the next five-year plan, then it can cover the gap, Soffin said. The MTA already expects to be billions of dollars short in its next capital budget.

Meanwhile, the bad financial news keeps piling on for the MTA.

On Monday, agency officials reported a third straight month of lower than expected income from real estate tax returns. This, on top of a loss of $354 million when the congestion pricing proposal died and another loss of $52 million when Albany cut its funding last month.