How could this happen? That’s what frustrated commuters are asking following the MTA’s latest budget surprise. The agency discovered that revenue projections were off by $200 million, and commuters were already dreading possible cuts in services.
MTA officials were reluctant to raise fares following May’s 25 cent subway fare increase, so financial relief may have to come in the form of eliminating less popular local bus routes, fewer trains running during off-peak hours and off-peak station closures.
The MTA blames a down economy and an under-performing state-administered payroll tax. It’s important to note the $200 million dollar shortfall accounts for only 2-percent of the MTA’s $10 billion budget.
MTA Spokesman Jeremy Soffin said the MTA is reeling from a 1-2 combination it didn’t see coming: the dip in tax revenues and the state legislature’s recent decision to cut $143-million in transit funds. Complicating matters, the MTA board is scheduled to approve its final 2010 budget next week in front a skeptical ridership.
And while Soffin said there will be no proposed fare increases in next year’s budget, he warns everything else is on the table.
(Source: WCBSTV)
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6 Responses
1. Higher fares discourage use for some people.
2. The economy encourages fewer trips (less spending on recreation, no paying fares if you stay home being unemployed).
3. People who predict revenue based on a previous year’s usage in a different economy and lower fares are clearly deluded. Perhaps they should work for mortgage banks making NINJA loans – they’ll fit right in.
What did they think they will cut services and raise the rates and this will increase their revenue? Well the people who used to go with the public transportation lines that where cut. Found other ways of transportation not with the MTA. The rate increase accomplished that the people that live on a very tight budget because of the economy found other means of transportation like car pooling, hitching, bike riding or even walking. Next time they should act like private business owners or airlines do. To get more riders they do just the opposite lower the prices and add services.
akuperma, Barney Frank was the one who concocted the Community Reinvestment Act which spawned NINJA loans.
I got a better idea; Privatize the MTA! mayerfreund got it almost right. Then you will see real service. But, if you are someone who wants to maintain government control over the MTA, then you will deride me and attack me personally. Just watch.
Flatbush Buddy is mistaken. The Community Reinvestment Act was enacted in 1977. Barney Frank wasn’t even in Congress until 1981.
And the Community Reinvestment Act wasn’t even the problem: Unregulated mortgage lenders not subject to the law were more likely to make subprime loans than the banks that were subject to the law.
I would support a fare increase in order to avoid service cuts. Even now, the trains from Manhattan to the Bronx are all over capacity in rush hours, and the service at off hours is inadequate.
Charlie-
You have a very simplistic way of looking at a crisis that had many causes.
Fannie Mae and Freddic Mac had 65-1 leverage by the time they were seized by the Government. They had $5.2 trillion in debt. The most shocking part about it is they didnt try to securitize and sell all the subprime mortgages they issued, they actually kept it thinking the loans would be paid back.