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Stimulus Instead of Service Cuts?

After successfully winning a $2 billion financing solution earlier in June, transit riders, elected officials and MTA board members alike are frustrated by the nearly $400 million budget shortfall at the end of the year. According to MTA CFO Gary Dellaverson, the unforeseen deficit is the result of lower than expected revenue from the payroll tax, recent $143 million cut by the state to balance its own budget deficit and last week’s State Supreme Court decision upholding an arbitration ruling that awarded 11.5 percent raises to transit workers over the next three years. Tri-State’s federal advocate,Ya-Ting Liu, testified at yesterday’s MTA Finance Committee hearing.

The proposed cuts, which fall overwhelmingly on NYC transit riders, add up to $182 million in savings for the MTA. On Monday, MTA board member Doreen Frasca noted such devastating service cuts actually yield very little in savings for the agency and they should be more creative in finding that money elsewhere. Ms. Frasca urged the MTA to redirect unspent stimulus money to plug the operating deficit.

Transit agencies are allowed to flex 10% of their stimulus grants to pay for operating costs. Of the $1.2 billion MTA has received, up to $120 million could be available to plug the current $182 million budget deficit. Another potential source of revenue for the MTA is the federal jobs bill recently announced by President Obama. The transportation portion of the the bill is expected be $50 billion, leaving an opportunity for both capital and operating budgets to be funded.   While relying on federal aid is only a short term solution, it may help 8 million daily NYC transit riders avoid drastic service cuts until the city, the state and our elected leaders find a long term solution to finance the MTA.

The full board will meet this Wednesday and likely vote to approve the proposed plan in hopes the payroll tax compliance and timing issues will resolve before cuts go in effect July 2010. Meanwhile, as required by law, there will be another round MTA public hearings on the proposed cuts starting next month.

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[…] the state restore the $143 million cut to the MTA it made in November.  The state and city must also work together to cover the cost of […]

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