MTA Board Seeks Job Cuts and NYC Payments to Balance Its Budget

(Bloomberg) -- New York’s Metropolitan Transportation Board has been asked to approve a $17.6 billion budget that hinges on eliminating 2,700 administrative jobs and requiring the city to assume half the cost of its paratransit system.

The agency, which runs the city’s subways and buses, regional commuter rail and several bridges and tunnels, needs to implement a “transformation plan” containing those proposals to save about $1.6 billion over the next four years, MTA Chief Financial Officer Robert Foran said during a board meeting in Manhattan on Thursday. The plan contains no budget-driven service cuts, anticipates subway improvements funded by congestion pricing and for-hire vehicle fees, and assumes 4% fare and toll increases in 2021 and 2023, he said.

The shedding of 2,700 administrative positions would be achieved mostly through attrition, Foran said. The cost of the agency’s paratransit program has increased to $549 million a year from $11 million 25 years ago as users increased to 159,000 from 25,000. The city, which now pays 33% of the cost, would have to pay about $100 million more a year if it agreed to split the cost evenly with the MTA, Foran said.

“We are making great progress to achieve a balanced budget that will provide the essential funding to deliver improved service,” Foran said. The board is scheduled to vote on the plan at its December meeting.

Budget Increase

A spokeswoman for Mayor Bill de Blasio, Freddi Goldstein, criticized the budget plan, saying the MTA should agree to an outside review of its spending, particularity in the paratransit program.

“The MTA seems to think it’s easier to extort New Yorkers for additional funds than to solve their long-term management woes,” Goldstein said in a statement. “The MTA should submit to an independent audit of its paratransit system, convince New Yorkers it has its budget under control, and come up with a plan to rein in inefficient services before demanding another contribution.”

The budget, a $421 million increase over what had been anticipated in July, includes $253 million in higher fare-box revenue than had been projected then, due to increased ridership across the system, according to the agency plan.

The agency has had to pay almost $250 million to hire 500 police officers to curb fare evasion on its buses and subways and improve safety and security of employees and customers, according to the proposed financial plan. MTA officials assume the move will reduce the loss of fare-box revenue by $200 million over four years.

Transit Workers Union President John Samuelsen said the financial plan doesn’t adequately anticipate raises, including plans to inject about $100 million from fare-box revenue into capital spending funds as a pay-as-you-go construction and maintenance program.

“That fare box is operating money,” Samuelsen said. “You’re taking money directly out of the fare box into the capital plan where we’re flush.” If the union settled for concessions, “which we’re not going to do, that money going from the fare box into capital would go right back into the operating budget,” he said.

The agency has identified more than $50 billion in needed capital to make improvements and repairs to city subway, buses and commuter rail transit. It has committed billions more to its operating budgets over the next 10 years to improve daily service of its subway system, which has been plagued by delays and interrupted service due to obsolete technology, deferred maintenance and damage from salt-water flooding after Hurricane Sandy in 2012.

The MTA is expected to end this year with a $143 million surplus, which would roll into next year’s budget. The agency forecasts it will see a $212 million deficit in 2022 that would increase to $426 million in 2023, Foran said. If the transformation plan isn’t adopted, the agency would experience a $219 million deficit next year rising to $900 million in 2023, he said.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Michael B. Marois

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