Cuomo Cuts $100 Million to Transit [Updated]

executivebudgeReactions to Governor Cuomo’s proposed budget are beginning to come in. The cuts to transit, which are being pegged at $100 million, are being portrayed as painful, though perhaps not devastating.

The MTA itself sees Cuomo’s plan as cutting $100 million from its budget, not the $57 million we estimated earlier. That’s $200 million in raids on dedicated transit funds, offset by $100 million in economic development aid to the capital program.

We’re still looking into why the $43 million in increased operating aid that the Cuomo administration mentioned in its press release doesn’t seem to be a part of the MTA’s math. It may be that increase was expected, in the form of increased payroll tax revenue, say, and therefore not truly a new budget action.

In a press release, the MTA stated:

Because the MTA has already taken unprecedented measures to reduce costs, finding an additional $100 million in 2011 will be very painful, especially with sizable deficits still projected for 2012 and 2014. As we continue cost-cutting, further reductions become harder and harder to achieve.

But we must fill this gap, and we will fill it without resorting to fare and toll increases or service cuts, because our riders have already been hit with these painful measures over the past year.

The transit agency continues to note that it will try to find that $100 million through efficiencies, and that it hopes labor will cooperate in increasing productivity.

The Drum Major Institute’s John Petro also scores the budget’s impact as a $100 million cut. As Petro notes in a post on DMIBlog, Cuomo is proposing not only a cut to the MTA, but a shift from the operating budget to the capital plan:

While it is essential that the governor and legislature find ways to fully fund the MTA’s capital program, which has a nearly $10 billion hole, taking critical funds used to maintain good service is not appropriate. Nor is $100 million, or even $294 million if the Bond Act funds are included, enough to begin plugging the capital budget hole.

A $200 million raid on the operating budget is, in fact, significantly larger than the $143 million dollar theft last year that triggered unprecedented service cuts and fare hikes. The new cuts come when the lowest-hanging fruit — the least intrusive service cuts and most easily-implemented efficiencies — has already been plucked.

Update: The net impact on the operating budget will only be $100 million, according to the Straphangers’ Campaign’s Gene Russianoff. The intent is for the $100 million in re-directed economic development aid to pay for capital projects that would otherwise have been paid for out of the operating budget, he said. Those operating funds will be freed up to pay for service. As a result, the net loss for the MTA is $100 million, which will come exclusively from the operating budget — a somewhat smaller hit than the agency absorbed last year.

Petro also warns that the MTA can honor its promise of avoiding further service cuts while still in practice reducing service. It could clean the subways less frequently, or cancel bus runs if the driver calls in sick, for example.

His ultimate conclusion: “Cuts like these will make it nearly impossible for the MTA to improve service and to update the region’s mass transit system for the 21st century.”

The Straphanger’s Campaign’s Gene Russianoff had a more optimistic take on the budget. “Governor Andrew Cuomo’s proposed state budget has mostly good news for New York City-area transit riders in these tough economic times,” wrote Russianoff in a statement. Though he noted the $100 million raid, Russianoff focused on the fact that service cuts and fare increases will be avoided for now. “That’s very welcome after an unprecedented three years in a row of higher fares – as well as last year’s service cuts, the worst in memory,” he said.

  • Regna

    Page 230 of the agency budget has the dedicated fund raid at $102.3m
    http://publications.budget.state.ny.us/eBudget1112/agencyPresentations/pdf/AgencyPresentations.pdf

  • Without fare increases or service cuts, deferred maintenance looms large. I remember what the subway was like in the mid-’70s. Maybe a fare increase isn’t the worst thing that could happen.

  • Larry Littlefield

    The MTA was caught deferring maintenace by fudging inspections, and was caught using borrowed money for operating expenses. No announcement was made.

  • J

    Is it realistic that they’ll be able to fill a $100 million dollar gap through improved labor efficiency? I know this is perhaps the MTA’s biggest expense and a big source of criticism (excessive overtime, pensions, etc.). Unions are still pretty strong, though. Thoughts?

  • Larry Littlefield

    “Productivity” is not a response to a budget crisis. It is an ongoing search for efficiency, year after year.

    You can’t put less than one driver on a bus, or (by contract) two workers on a train. Fewer, bigger buses (the articulateds) can be used on the busiest routes, but increase dwell time.

    There have been productivity gains in Car Equipment and Maintenance of Way over the years, due to innovations like easier to maintain subway cars, replacement kits and schedules, track panels, and new machines. Not so much in buses, stations and rapid transit operations. Or at least that was the case through 2004, when I left the MTA.

    Productivity in the suburban railroads is low, particularly on the LIRR, but I doubt Dean Skelos would want it to be higher.

  • J:Lai

    Raise fares and increase service. Raise the fare as high as it needs to go in order to fully fund operating expenses, including restoration of service cuts, and leave enough additional revenue to bond in order to pay for the capital budget except for expansion projects like SAS.
    Let Albany and City Hall subsidize transit for those with lower incomes, thus obviating the need for the MTA to depend on direct transfers from the state. If they refuse, at least people could focus their displeasure on elected officials instead of the MTA, which neither cares about nor responds to public opinion.
    Seems like a base subway fare in the range of $5, with regularly scheduled increases, should achieve this (with corresponding increases in commuter RR fares and bridge/tunnel tolls.)

  • Ian Turner

    J:Lai, in that case, wouldn’t labor arbitrators grant 300% pay raises to MTA workers, since the agency could “afford” it?

  • Larry Littlefield

    “J:Lai, in that case, wouldn’t labor arbitrators grant 300% pay raises to MTA workers, since the agency could “afford” it?”

    That does seem to be the definition of “afford.” And I believe arbitrators by law are required to compromise between what the workers want and what taxpayers can afford, but are not to consider the impact of the contract on the quality and extent of public services. So the perfect contract, for wealthy taxpayers and the unions, is one that pays somewhat less but allows the ex-workers to retire immediately as public services are eliminated.

  • Rob

    “And I believe arbitrators by law are required to compromise between what the workers want and what taxpayers can afford, but are not to consider the impact of the contract on the quality and extent of public services.”

    Public sector arbitrators in NY state are required only to consider management’s ability to pay. In this past, this has been defined as the ability to either levy taxes or increase fees. Since the MTA could ideally increase fees to any number it choses, the issue of the impact on individual riders isn’t even part of the equation. That’s not to say that arbitrators aren’t provided with information on the impact of a particular labor proposal, just that they are under no obligation to use that information in making their decision.

    Realistically, most arbitrators try to find a balance between labor’s and managment’s proposals, but the riders are not taken into account in the process at all.

  • Larry Littlefield

    Just remember, Cuomo is an admirer of Hugh Carey, who brokered the deals under which existing public employees got their enriched pensions with no givebacks, rich people got their bonds paid, and New York’s tax burden stabilized at the highest level in the country.

    By allowing the city’s infrastructure to collapse, ending public education in New York for all but the few, and allowing the police to stop preventing crime, all while future public employees were given lower pay and benefits.

    I’ll be the UFT is up in Albany right now proposing that future teachers not be allowed to retire until age 75 — in exchange for a pension incentive for existing teachers over 45 to retire right now.

  • $100 million is a little less than the difference between the MTA’s own appraisal of the value of development rights for the Vanderbilt Yard ($214.5 million), and what it sold those rights to Bruce Ratner for ($100 million). I didn’t see anything in the Governor’s budget about cutting subsidies for Atlantic Yards, however.

  • Frank

    Inflation wise the fare is cheaper than it was in 1974. It was 35 cents then which would be equal to 3.50 in todays dollars. Remember when a slice of pizza was a quarter and gas was fifty cents a gallon? most thingts have gone up 10x in the last 40 years,maybe a fare hike is the solution.

  • Bolwerk

    Hmm? According this CPI calculator, $0.35 in 1974 is equivalent to $1.56 today. It’s more expensive than it was in 1974. For equivalence, the fare would have been 50 cents in 1974 ($2.25 in 2011 dollars).

  • Joe R.

    The problem isn’t that transit fares are too low. Rather, there isn’t a dedicated source of transit funding. Also, the MTA should do things like either charge more during peak times when the cost of an incremental rider is higher, or reduce off-peak fares to shift some portion of ridership away from rush hour. A lot of the MTA’s costs are providing capacity which is only used a few hours a day. Spread the rush hour out, better yet stagger work hours so there is no rush hour.

    I also wonder what the costs are of keeping measures in place to ensure that riders pay their fare? If the system were free, you could get rid of turnstiles, token clerks, some transit police, etc. I sometimes wonder if the cost of providing all these things exceeds the revenue collected from the fare. Really, the long term goal should be towards reducing the fare to zero. An oft-used excuse why people drive is that they’re paying for the car anyway, can’t see paying yet more for the subway when their car is “paid for”. Lack of a fare removes that psychological hurdle. We just need to find a dedicated, reliable way to fund transit in order to accomplish this.

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