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As printed in Newsday — http://www.newsday.com

MTA announces new $350M budget shortfall

February 3, 2010 By ALFONSO A. CASTILLO alfonso.castillo@newsday.com

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

comments   1 - 22

krapug1
Were lucky here on the East End, even though our LIRR service sucks big time, we have the Hampton Jitney, that provides better service, and does not swallow one extra dime of tax money. This latest turn of events shows what a joke the MTA/LIRR is.
2/4/10

rocket88
Choo Choo Charlie needs more Good'n'Plenty...!
2/4/10

Themaskedwriter
I bet at the next press conference someone will get up there and talk tough and say they will hold people accountable...another big joke. We should demand the names of the people who are fired because of this atrocity!!! 350 million dollars!!!!
2/4/10

Themaskedwriter
CLEAN HOUSE PLEASE!!!! GET PEOPLE IN THERE WHO ARE COMPETENT AND CAN BALANCE A BUDGET!!! THIS IS ONE OF THE MOST IMPORTANT AGENCIES IN THE STATE AND COUNTRY AND IT IS THE MOST INEPT!!!
2/4/10

MadballNYHC
Dropper48 is on to something. Both Johnson and Foley, people hired to represent LI's best interests, completely sided with the MTA board and voted to implement the tax in the first place. They should have been looking out for Long Islanders and put pressure on the MTA to cut spending, get audited, whatever, not to say "Here you go MTA, please take more of our voters' money. What, they don't all use your services? That's perfectly fine, they'll understand."
2/4/10

EDIPETE
In my business, if employee productivity goes down, people are laid off. No sense in keeping dead wood around. The MTA works in reverse. They reward ineptitude with huge salaries and large increases and continue to hire. If they raise fares and reduce service as drastically as they are proposing in order to keep their unproductive staffed employed, ridership will continue to decrease, thus further decreasing revenues. Let them go bankrupt. Maybe then, each agency can be sold to private investors and run correctly.
2/4/10

stjamesBri
Just one question.....how do these people still have jobs???? This is the definition of incompetence.
2/4/10

WarszawaScream
The ineptitude of whoever is working the budget in the MTA is absolutely staggering. Where is the re-organization of staff we heard about? Why hasn't the government ALREADY jumped down their throats and taken this bull by the horns? The mis-management of funds across this agency has gone WELL beyond out-of-control and it's been that way for many years, so don't even listen to cries of "it's the economy's fault!". The higher you raise fares, the more people you're going lose as paying customers; even those wholly dependant on public transit will manage to find a way to get where they need to go WITHOUT the trains and buses if this nonsense continues.
2/4/10

drc11563
Wow a shortfall at the MTA? Next thing you are going to tell me is Politicans don't lie.
2/4/10

dropper48
Maybe our suffolk democratic represenitive Brian Foley would after voting for the first MTA tax on his suffolk constituents would like to increase the tax again. Vote every TAX increasing incumbent out, Suffolk VOTERS Vote as an INDEPENDENT and follow Massacusetts lead.
2/4/10

oceanblue
Wow, who's the bookkeeper there, pink slip and now!!!! cut down payroll and expenses..Ridership is down, people out of jobs, time to tighten the belts at the MTA.. But of course that won't happen, they will increase tickets prices, so we the hard working over taxed tax payers can foot the bill...The HUGE salary's these bozo's are getting, and they can't even balance the books....FIRE EACH AND EVERY OVER OAID ONE OF THEM, who are stuffing there pockets with the $$$$$$$.. something doesn't add up...... corrupt thieves running the circus.. come on.. not far to us.. VOTE COME NOVEMBER EaCH AND EVERYONE OF THESE CORRUPT CRIMINALS OUT OF OFFICE.. i'M TIRED OF ALL THE SPENDING, BETWEEN OBAMA, PATTERSON, BLOOMBERG...my wallet is empty and I have nothing to show for it...I didn't have a good time it SPENDING LIKE THESE THUGS ARE HAVING..
2/4/10

Toots
Who is taking care of the books? Are they even qualified? Obviously not! They can't even balance a budget. I'm sure a single mother could do a better job who does the bills every month who lives paycheck to paycheck.
2/4/10

RWM49
Ooooops we were off by about ONE MILLION DOLLARS PER DAY????????? Are they KIDDING? How is this not gross incompetence? Eric is right, let it be run privately! Let Companies buy lines if they want.....the Uptown Visa Line, or the Citibank crosstown line.......
2/4/10

THespos
Why does it seem like every few months the MTA "finds" new budget problems? Seemingly, it's easier to get things like fare increases approved if they happen incrementally. The financial ineptitude is easier to swallow that way. Double-digit fare increases are a slap in the face, as was this new payroll tax. My monthly ticket from Ronkonkoma to Penn now costs $382.76 with a 30-day Metrocard on the back (for the subways). Add to that the cost of the payroll tax. Now, wait for the fare increase proposal - it's coming. You can set your watch by it. The MTA will propose something around 20%. After much bellyaching at public hearings, they'll settle for something around 10% and start planning the spin campaign for the next increase.
2/4/10

politics64
State Senator Johnson is correct to tell the MTA board to start consolidating its departments and shedding payroll. Senator Foley roll back of MTA tax from34 cents to 11 cents needs to be implemented. Public subsidized fares are vital and should equal but not exceed 50% of the real cost of a fare, that needs to be looked at and finally the current recession shortfall should be made up by using 10% of the Stimulus infra structure capital improvements monies, there is little sense in capital improving the MTA if people cannot afford to ride them.
2/4/10

Eric
What a surprise...after the tax is implemented, the MTA cuts service and STILL doesn't have enough money! Here's an idea: Start by taking back all of the disability payouts people have been granted by the retirement board, doing away with the tax (which obviously isn't generating as much money as originally projected anyway), and file for bankruptcy. Enough with these B.S. bailouts! Let the MTA go under and get bought out by a private company. A private corporation would never allow its business to be run into the ground and spend well beyond its earnings like the MTA has been doing for years.
2/4/10

WesternElectric
If money is so tight, why would you give the LIRR's political hack president, Helena Williams, with NO qualifications, a $2,500,000 pension after she works only three years?
2/4/10

mac_b
Just finer everyone from the president to the car cleaners. You need to destroy the village to save it.
2/4/10

CoachJim
The ineptitude of the MTA in planning and budgeting is mind boggling. Does this agency ever do anything right?
2/3/10

stevedam
Why does it seem like every few months the MTA "finds" new budget problems. I think they need to disband the MTA and have separate entities running the LIRR, the Busses and the Subways. The MTA has too much CONTROL over the transportation of the NY metro area. I bet a High School Graduate can do a better job at budgeting the numbers than the MTA does. What math does the MTA use to plan its budget. As I have said before. Get rid of the NYS Senate and the Leg this NOVEMBER!!! VOTE them all out and try to get new blood into the state.
2/3/10


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