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Long Island

MTA announces new $350M budget shortfall

An LIRR train navigates down the tracks in

An LIRR train navigates down the tracks in Queens. (Jan. 6, 2007) Credit: Newsday File / Robert Mecea

In the struggling Metropolitan Transportation Authority's latest financial calamity, the transit agency announced Wednesday it is facing a new $350-million budget shortfall driven by lower-than-expected tax revenue.

The latest budget deficit comes atop a gap of nearly a half-billion dollars that the agency has sought to fill through widespread service cuts. Among those proposed cuts are cancellation of several Long Island Rail Road trains - including most trains between Ronkonkoma and Greenport - and elimination of 15 Long Island Bus lines.

MTA officials did not offer specifics on how they are going to address the latest deficit, saying they are considering "a variety of cost-saving and other measures."

Agency spokesman Jeremy Soffin said that the MTA does not plan to raise fares this year. "Obviously, at the end of the day, we need to balance our budget and we'll do what we have to do," Soffin said.

Matt Anderson, spokesman for the state Division of the Budget, said his office notified the MTA on Tuesday that its latest forecast for the revenue generated from a newly adopted dedicated tax for the MTA was $350 million below previous projections.

The tax, which charges 34 cents for every $100 of payroll to employers in the 12 counties served by the MTA, was the foundation of a $2.26-billion rescue package for the MTA that legislators in Albany approved nine months ago.

In December, officials said revenue from that new tax had fallen $200 million short of projections. As he did then, Anderson said Wednesday that the most recent shortfall may be due largely to employers failing to comply with the tax or not realizing they have to pay it.

"It's our hope that some of these revenues will ultimately materialize," said Anderson, who added that the projected revenue also may be a victim of the "continuing, battering effects of the recession."

State Sen. Craig Johnson (D-Port Washington), a voting member of the MTA Capital Program Review Board, criticized the budget office, saying it cannot count. "This is the second revision in revenues from the MTA payroll tax," he said. "I'm upset by their gross inability to determine what monies are going to come in."

Johnson urged the MTA to reduce expenses and consolidate departments to deal with the shortfall, not cut rail and subway lines or raise fares.

Gene Russianoff, spokesman for the Straphangers Campaign, said the MTA's growing budget gap makes it "more important than ever" for the agency to divert some federal stimulus dollars now earmarked for capital projects, to the operating budget. Federal law allows transit agencies to use up to 10 percent of stimulus funds on operating needs.

The Tri-State Transportation Campaign echoed that sentiment, saying that service cuts are "completely preventable."

MTA chief executive and chairman Jay Walder has said he is opposed to going that route, so as not to jeopardize the agency's critical investments in its infrastructure.

In another sign of the MTA's poor financial shape, Moody's Investors Service Wednesday downgraded the MTA's transportation revenue bond rating from A3 to A2. In a statement, Moody's said the action "was prompted by the MTA's revenue deterioration over the past several months."

With James T. Madore