MTA upbeat about balanced budget, no cuts

The MTA will balance its $12-billion budget next year and beyond and fund the rest of its multiyear capital plan without service cuts or unplanned fare hikes -- as long as several things go right and none go wrong, transit officials said Tuesday.

The Metropolitan Transportation Authority is expected Wednesday to release its 2012 preliminary operating budget, which aims to close a deficit of nearly $250 million without a significant impact on riders. The transit agency says none of the painful measures taken in recent years to fill budget gaps -- big fare increases, deep service cuts, a $2.5-billion state bailout -- is on the table this time around. Instead, the MTA plans to close its deficit using efficiencies and, some observers said, a fair amount of wishful thinking.

"There's a lot of assumptions, and a lot of things have to go right," said William Henderson, executive director of the MTA's Permanent Citizens Advisory Committee, who was briefed on the proposed budget. "And if we have a double-digit recession, all bets are off."

Variables upon which the MTA is relying for its 2012 budget picture include: acceptance of a three-year wage freeze by its 59 unions at the end of their existing contracts; continuation of the unpopular payroll mobility tax, which the legislature is considering repealing; no further reduction in aid from the state, which has cut subsidies to the MTA in two of the last three years; and no major decline in ridership. The MTA board will vote on a final 2012 budget in November that will take effect on Jan. 1, 2012.

"The budget that will be presented today shows stability returning to the MTA's finances thanks to aggressive cost-cutting," MTA spokesman Jeremy Soffin said. "This stability has many risks, though, and depends on retaining existing revenues and achieving labor agreements that reflect the current economic reality."

Anthony Simon, general chairman of the Transportation Workers Union -- the Long Island Rail Road's largest labor group -- said it was "entirely unfair" of the MTA to speak of targeting wages to balance its budget before negotiating with unions.

The MTA is banking on a predicted $170-million surplus at year's end to help close its nearly $250-million deficit in 2012. The agency is predicting smaller surpluses in 2012 and 2013.

Officials said some of the extra money resulted from aggressive internal cost-cutting that began last year and will save the agency $800 million a year by 2015.

Those efficiencies have ranged from taking away cellphones from 3,000 workers to having employees share printers.

The MTA also is counting on revenue from a 7.5 percent fare increase in 2013, part of the state's 2009 bailout of the agency, which then faced a $900-million deficit. Similar fare increases are slated to come in alternating years -- 2015, 2017 and so forth, MTA officials said.

The authority Tuesday also detailed its plan to fund the last three years of its current five-year capital plan, which goes through 2014 but runs out of money on Dec. 31 of this year.

The MTA wants to borrow half of the roughly $14 billion needed to complete the plan -- with $3 billion of that coming through a federal loan. Some operating-budget funds usually earmarked to pay off new capital expenses instead would go toward paying the capital plan's debt service.The MTA hopes to partner with city, state and federal governments on strategies to cover the rest, officials said.One proposal involves sharing in property taxes on real estate purchases near the sites of the MTA's two so-called "megaprojects" -- the Second Avenue Subway and the LIRR's East Side Access plan to Grand Central Terminal. Another would have the Port Authority buy rail cars, then lease them to the MTA.

"Our hope is that we will get enough partners in the program that everybody will do their share," said MTA board member Mitchell Pally, of Stony Brook. "Obviously, the MTA is doing more than its share."

Funding the budget

How the MTA plans to fund its $12-billion 2012 and fill a $250-million deficit:

Use surplus from 2011

The MTA projects it will close out the year with a $170-million surplus, achieved in part by taking $50 million from its reserves.

Cut costs

New efficiencies are saving the MTA more than $600 million a year, a figure expected to grow to $800 million by 2015. The measures include consolidating e-mail servers and data centers, eliminating some company cars and taking away cell phones from 3,000 employees.

Freeze wages

Both union and non-union workers are expected to forgo a raise for three years. Unions have not agreed to those terms yet.

Get what's coming to them

The plan counts on the state not cutting its aid to the MTA, as has happened in two of the last three years. It assumes the MTA's payroll mobility tax, which brings in $1.5 billion a year, remains in place (the Legislature is considering repealing it.)

-- ALFONSO A. CASTILLO