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MTA budget woes raise fears of more fare, toll hikes than planned

MTA chairman and chief executive Thomas Prendergast is

MTA chairman and chief executive Thomas Prendergast is seen here in Manhattan on July 10, 2014. Credit: Craig Ruttle

The Metropolitan Transportation Authority detailed an uncertain fiscal future Wednesday, raising fears of more fare and toll hikes than the agency planned.

The MTA's latest update to its four-year financial plan, released in June, includes $60 million in new expenses that will increase the size of a projected 2018 budget deficit to $322 million. The agency's 2015 operating budget is $14.4 billion.

That shortfall is in addition to a $15 billion gap in the agency's newly proposed capital program, which aims to fund infrastructure investments through 2019. And while transit advocates continue to push for a new revenue stream for the agency, MTA chief financial officer Robert Foran noted Wednesday that the agency's existing major revenue stream -- the state payroll mobility tax -- is "under constant threat" by opponents in the State Legislature.

"We don't care what the tax is. We just do need this level of funding if we're going to be able to operate and maintain the system as it is now," Foran said at the Manhattan meeting.

With no clear avenue to get more money, MTA board member Jeffrey Kay said he was concerned that the agency will be forced to reach deeper into riders' wallets. The MTA is already planning a 4 percent fare increase in March that will drive up the cost of a monthly Long Island Rail Road ticket by between $7 and $19.

"It wouldn't surprise me if there were more fares hikes, or at least more talk about fare hikes," Kay said.

While committing to keep pushing for new aid for the agency, MTA chairman and chief executive Thomas Prendergast acknowledged that fare revenue and its capital budget shortfall are "intrinsically linked, if nobody comes to the table and gives us the money we need."

The discussion came just two days after the MTA released details of its latest proposed fare increase -- the fifth since 2008. While the public's focus may be on the rising cost of their commutes, Gene Russianoff, spokesman for the nonprofit Straphangers Campaign, said the MTA's underfunded $32 billion Capital Plan should be a far greater concern for riders and lawmakers.

"There's a couple hundred million that's addressed by the fare, and there's $15 billion [in deficits] for your capital program. . . . Keep your eyes on the prize," Russianoff said. "The best thing the governor can do for the millions of people who use the transit system is get this program passed. . . . If he fails, the city and its suburbs will be badly hurt."

The Cuomo administration had no immediate comment Wednesday.

Assembly Democrats will discuss the MTA's fiscal needs next year, said Michael Whyland, a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan). A spokesman for State Senate Majority Leader Dean Skelos (R-Rockville Centre) could not immediately be reached to comment.

The MTA's finances have worsened since June, in part because of new investments in safety improvements, higher-than-expected overtime cost estimates and lower-than-expected revenue from Department of Motor Vehicle and taxi surcharges earmarked for the agency.

Other sources of revenue have improved in recent months, including from fares driven by record subway ridership. Foran said the agency wants to use found money to pay down unfunded liabilities. For example, the MTA will put $135 million in unused 2014 reserve funds toward Long Island Rail Road retiree pensions, reducing its $120 million annual liability to the pension costs by $10 million.

The MTA also announced it has increased its cost-cutting target by another $50 million, bringing the total amount of internal savings to $1.6 billion by 2018.

"It causes a lot of angst and agony for our agency heads," Prendergast said of the MTA's cost-cutting initiative. "But we'll continue to do that."

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