Economic Downturn Contributes to Major Deficit at M.T.A.
An Ironic Situation
Public transit, which in the face of record gas prices has been looking increasingly attractive (although fuel costs have recently declined), is now being challenged by the economic downturn as certain revenue streams dry up. For example, the Metropolitan Transit Authority "faces a $1.2 billion budget deficit in 2009 — $300 million more than it had projected in July — that will very likely require new fare and toll increases or service reductions." This deficit comes in spite of the fact that ridership is up across the country. In the case of the M.T.A., which servces New York City and surrounding areas, "the deficit was caused. . .by the collapse of revenues from real estate and corporate taxes." The irony here is that while high gas prices encouraged more people to consider public transit, and the economic downturn only strengthened the need to save money, many transit authorities will be forced to raise fares and decrease services.The problem is that future revenues from real estate transaction taxes are expected to decline in the coming years, and the MTA must "pass a balanced budget in December for the fiscal year that starts on Jan. 1." What's more, the MTA is paying off debt from "heavy borrowing for capital projects that occurred in the early part of this decade." As a result, the authority is considering several options to overcome the budget deficit, including:
--"imposing tolls on the four East River bridges — the Brooklyn, Manhattan, Queensboro and Williamsburg Bridges — that are run by the city"
--reducing service, and
Whatever they do, it is essential that the MTA continue serving the people of New York. As Governor Paterson put it, "The M.T.A.’s subway system, buses and extensive regional commuter rail network are the lifelines of the greatest city in the world."
Via: City Room (NY Times Blog)
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