Fuel Costs, Declining Revenues Slam MTA. Will Anyone Face the Facts?

The MTA just released some figures from its preliminary 2009 financial plan. Here’s what was actually happening to our transit system while the dailies were focused like a laser beam on board members’ travel perks and the CEO’s "scandalous" three percent raise:

The July Financial Plan assumes an increase of $81 million in 2008 and $127 million in 2009 for fuel costs, and reduced real estate tax projections of $201 million in 2008 and $242 million in 2009.  These are the primary reasons that the $216 million budget deficit projected in February for 2009 has grown to over $900 million.

In the face of these numbers, why are Paterson and Bloomberg trying to blame a potential fare hike on the MTA alone? Maybe it’s impolitic to remind people of the $500 million dollars congestion pricing would have funneled to transit every year. But even if the city and state want to hold out as long as possible before they pony up, right now there’s legislation currently stalled in Congress that would deliver $237 million to New York City’s transit system. Let’s hope that yesterday’s rally for transit at City Hall spurs more local electeds to pressure the feds — this means you, Senators Schumer and Clinton — to revive the Saving Energy Through Public Transportation Act.

  • Larry Littlefield

    May I point out that while real estate investment sales are down in NY, in many of not most other markets they have dropped to zero. The MTA is lucky to have a $900 million deficit. It will probably get worse.

    Over on the Gotham Gazette, the Working Families Party has released a tax-the-rich-only plan to raise $200 million. For everything. It’s laughable.

    I’ll admit I’ve been feeling a little down lately. Maybe I should stop reading this stuff. For most people, what’s coming is going to feel like being blindsided by a bus after stepping off the curve. For me it’s like being tied to the subway tracks and seeing the train come from several stations away.

  • spnder

    Well clearly the state and city are drowning in debt as well, so it’s not wonder they’re calling for MTA attrition first…

  • Larry Littlefield

    After they all got together and handed out goodies to the insiders for 20 years, the goal of every pol is to get people to blame someone else for the then-deferred cost. My guess is the non-plan is to make Governor Dinkins — er Paterson — the fall guy, now that he has cooperated by putting off all the pain until after the election.

    That’s why you hear Brodsky saying the chickens are coming home to roost. Well, why did you vote yes on all that stuff, you turkey?

  • anonymouse

    I’d like to see some numbers on how much fuel costs have gone up for the bus versus subway parts of NYCT, and perhaps the electric vs. diesel operations on the commuter rail. Maybe it’s time to start considering more electrification, and maybe some streetcars, to save on operating costs?

  • Red

    The MTA posted the presentation staff gave on the board meeting online at http://www.mta.info/mta/budget/ (at the top). Between 2007 and 2008, there’s an estimated increase in fuel costs of 62% and an increase in “traction & propulsion power” of 6%. That’s not as detailed a breakdown as anonymouse is looking for but it illustrated the split pretty clearly.

  • I don’t remember any of Bloomberg’s four stooges on the MTA board raising their voices about the less-than-50%-of-the-MTA’s-own-appraised-value giveaway of the Vanderbilt Railyard to Bruce C. Ratner. Et tu, Bloomy?

  • MS

    While it’s easy to point the finger at Albany for rejecting congestion pricing, the story is a bit more complicated than that.

    The MTA has two deficits: an operating deficit and a capital deficit. The operating budget pays to run the trains and buses, and it also covers payments on the debt that the MTA has borrowed over the last 25+ years to run its capital program. The MTA has a lot of debt largely because the Pataki administration cut back the state’s contribution to the capital program in the 90s and early 2000s. Now the MTA and riders will be paying the price for those decisions.

    The capital program has a different deficit. The five year capital program proposed by the MTA this spring had a deficit on the order of $15 billion. In that program, the MTA proposed spending $30 billion over five years for big projects like the 2nd Ave subway, the LIRR-Grand Central link, new bus rapid transit, station renovations, security upgrades, and screens that tell you when the next train is coming. But they only lined up about half the money they needed to get all that done.

    Congestion pricing would have helped plug the capital program deficit. The MTA had planned to issue bonds worth about $4.5 billion based on congestion pricing. The MTA had also proposed using about $100 million annually from congestion pricing to cover the operating expenses of new service that they planned for riders switching from cars to transit. But congestion pricing would not have helped plug the $900 million operating deficit that we’re now talking about.

  • Be

    If we would abandon the idiotic 7-extension to an area that is mostly unpopulated, and is essentially a give-away to real estate speculators/developers then we’d have a lot more money freed up for the rest of the system and for the speedy completion of the Second Ave subway, which will serve hundreds of thousands of residents in the Bronx and the East side of Manhattan (which is not mostly populated by rich people who only take cabs!!!!)

  • MS

    Regarding the #7 extension:

    The City has budgeted $2.1 billion for this project. The MTA would probably get hit with cost overruns, which will be significant considering that construction costs have skyrocketed since the budget was drawn up. Removing the #7 from the MTA’s plans would relieve the MTA of its worries about cost overruns but would not do anything about the current deficit.

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