New York's Metropolitan Transportation Authority and the Port Authority of New York and New Jersey both passed their 2009 budgets yesterday, but their fiscal circumstances couldn't be more different.
The MTA board passed an $11.42 billion "doomsday budget" that slashes services and raises fares, much to the consternation of the board members who voted for it, the agency staff that crafted it, and the riding public that will bear the costs.
The authority had to close a $1.2 billion budget gap that opened up as dedicated tax revenues fell amid economic turmoil and other expenses, such as debt service, were rising.
The MTA is looking to Albany and Washington for help with its capital program and operating budget but it had to pass a balanced budget by the end of the year that didn't include additional resources that may or may not materialize.
"If we did not pass the board budget, our credit rating [and] the bonds that we put out to finance our programs would probably be downgraded rather rapidly and would have a direct financial impact," said Eliot Sander, the MTA's executive director and chief executive officer. "How we respond in preserving and advancing our transit system is going to be critical in terms of New York's future in this century and so it's in that context that the legislature is going to have to make decisions on how they will fund us."
The "Draconian" budget would raise fares and tolls in June by a net 23% to bring in an additional $670 million in 2009 and $1.15 billion in 2010.
The Legislature will consider proposals by a commission headed by Richard Ravitch, a former MTA commissioner, to raise additional funding for the transit agency.
The Ravitch commission has proposed an additional payroll tax to raise funds that could back as much as $30 billion of bonds over five years to fund the MTA's 2010 to 2014 capital plan and proposed adding tolls to bridges on the East River to fund an expanded bus system. The payroll tax, as proposed, would provide relief to the operating budget in the first year.
Another possible source of capital funding is a federal stimulus package that is expected from the incoming administration of President-elect Barack Obama. The MTA has identified up to $1 billion of projects that are "shovel ready" and could be ready to go within 90 days if federal funding comes through.
"We're ready for whatever they decide to do," said MTA spokesman Jeremy Soffin. The authority has worked with Gov. David Paterson's office to prepare a list of projects such as rehabilitating stations, accelerating track replacement, and speeding up flood prevention measures.
The MTA operates the country's largest mass transit system, which includes subways, commuter rail, buses, bridges, and tunnels serving the New York City metropolitan area.
Also yesterday, the Port Authority, which operates the region's airports and bridges, tunnels, and a transit system between New York and New Jersey, approved its $6.7 billion 2009 budget that includes a record $3.3 billion of capital projects. The budget keeps operating expenses and staffing levels flat.
Although the Port Authority operates transportation assets, its revenues are more diverse than the MTA's and it does not rely on volatile dedicated taxes. The Port Authority raised tolls in the past year but did not do so again with this budget.
