10:12 am Oct. 2, 2012
Given the state of the M.T.A.'s finances, a budget watchdog recently argued, service cuts and fare hikes are inevitable.
"Everyone—commuters, M.T.A. employees, city and suburban residents, and elected officials—must face reality and contribute in some way to a long-term solution to the M.T.A.'s fiscal problems," wrote Carol Kellerman, president of the Citizens Budget Commission, in an op-ed in Crain's New York Business. "And periodic, predictable fare increases along with continued belt-tightening, including a trimmed service schedule, are unavoidable elements of a sensible solution."
One thing that probably should have been avoided, according to Kellerman? Those recent, much ballyhooed service restorations, which are being funded with a small budgetary surplus that she says is based on bad accounting.
The “surplus” announced for 2012 is based on an accounting approach that focuses only on immediate cash needs. By this calculation, the MTA has a surplus this year because its projected cash receipts are modestly ahead of projections made at the start of the year. But current-year obligations to be paid after Dec. 31 and the need to keep up with capital repair and replacement needs, known as depreciation, are left out.
While we all may welcome service restorations, the $29.5 million going for this purpose should be better justified. The 2010 service cuts were selected based on analysis of ridership patterns and services that were little used. Overall bus ridership has not been growing enough to warrant major service restorations; instead, adjustments can be made to deploy buses in accord with shifting usage patterns.
She also argued that M.T.A. chairman Joe Lhota's delaying of the 2013 fare hikes until March 2013 (rather than January), will "worsen the 2013 deficit by $67 million."
Lhota, it should be said, is no fan of the Citizens Budget Commission.
“Does anybody remember my relationship with the C.B.C., my history with them?” he said at a recent breakfast forum when, during a press scrum, I asked him about a recent C.B.C article arguing that service cuts should be targeted at those counties whose elected officials don't want to fund the M.T.A. “It’s a long and well-documented history of disagreement."
In an email, M.T.A. spokesman Adam Lisberg did not dispute that its current financial plan is "fragile."
But, he said, "I’m not sure what Kellerman is referring to by a 'trimmed service schedule.' We have made clear that we have no plans to reduce service. In the unlikely event the Court of Appeals throws out the [payroll mobility tax], we will have a $1.8 billion hole in our budget that will require grievous cuts and fare hikes to fill. But short of that, the M.T.A. is working hard to serve the growing needs of a growing regional economy. That’s why we are investing $29.5 million in new service, which includes efforts such as spurring off-peak ridership on commuter trains and running buses to New York City neighborhoods such as the Brooklyn Navy Yard and the far West Side of Manhattan."
As for those fare hikes, Lisberg said, "We are putting the new fare and toll increase into effect in March, as she reported, because that is the latest we can defer it before we must get the new revenue into our coffers. We are in no rush to raise fares and tolls, but it is necessary to keep our financial plan in continued balance."
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