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Andrew Cuomo

Cuomo Budget: Rising MTA Debt Costs Leave Big Gap for Riders to Cover

1:21 PM EST on January 23, 2013

When it comes to Governor Cuomo and the MTA, no news is bad news, and the governor's 2013 budget contains nothing new for the transit agency's operating budget. With debt, pension, and health care costs on the rise, the MTA continues to slowly drown in red ink, relying on straphangers to keep it afloat.

Although the governor takes credit for a $358 million increase in MTA revenue in his budget, this is due largely to improved receipts from the dedicated real estate, payroll, and petroleum taxes that help fund the agency. Even the increased tax revenue can't keep up with the MTA's rising fixed costs.

The governor's budget shows that MTA revenues are expected to increase 2.6 percent in 2013, but operating expenses -- driven by rising pension and health care costs -- and debt service requirements will surge 7.5 percent and 8.4 percent, respectively. (Not all areas of the transit budget are growing: The MTA says that cost-cutting initiatives begun in 2010 will result in $870 million worth of savings in discretionary spending in 2013.) This is entirely expected, but the result cannot be ignored: The MTA's 2012 operating surplus of $255 million has transformed into a 2013 deficit of $424 million in the governor's budget.

Without a plan from Albany, the MTA has few options to close the gap -- it's relying on straphangers to make up the difference. The toll and fare hikes approved in December will help close the agency's projected 2013 deficit.

In a sliver of good news, Cuomo is keeping his promise to make up for the revenue lost when he teamed up with suburban state legislators to slash the Payroll Mobility Tax in 2011. The budget includes $307 million from the state's general fund for this purpose, although this is $3 million short of the MTA's estimate of what would be needed to cover the gap.

Overall, the governor's budget for MTA operations does nothing new for transit riders. As debt, pension, and health care costs continue to grow, the burden is falling square on straphangers.

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