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NYCTRC Statement – Jan 17, 2012 – MTA 2012 Budget Impacts

Statement of the New York City Transit Riders Council to the

Committee on Transportation of the New York City Council

on the MTA Budget and Its Impact on Riders


January 17, 2012


My name is William Henderson and I serve as Executive Director of the New York City Transit Riders Council (NYCTRC).  The NYCTRC, which was established in 1981, is the legislatively mandated representative of New York City Transit riders, created by the State Legislature in 1981 to represent the users of the New York City Transit system.  The Council consists of fifteen volunteer members appointed by the Governor upon the recommendation of the Mayor, the Public Advocate and the five Borough Presidents.


The Council thanks this Committee for holding these hearings on the MTA’s 2012 budget and its impact on riders.  The word that may best describe the MTA’s 2012 budget is “precarious,” and this is not a comfortable situation for the riders that rely on the New York City Transit system almost 8 million times per day. There are some major assumptions underlying the MTA’s budget, and it’s not entirely clear how these assumptions will come to pass.  The MTA’s Chief Financial Officer even admitted at the Authority’s December Board meeting that he did not know where $35 million in efficiencies included in the budget would come from.

This creative budgeting continues in the funding of the remaining three years of the MTA 2010-2014 Capital Program.  Because no other resources are available to pay for needed repairs and improvements and the completion of major projects that are underway, the MTA has been forced to borrow to complete this needed work.  This budget provides that funds that had originally been intended to undertake capital improvements on a pay as you go basis far into the future will now be spent for debt service on bonds issued to fund these three years of the Capital Program.  This cannot help but put pressure on the operating budget and ultimately upon fares and the riders, as these funds will not be available for capital improvements in future years.

The result of all of this is that MTA’s 2012 budget is balanced, but any number of economic shocks or unforeseen events could knock the supports out from under the budget and lead to another crisis.  Already, we’ve heard the State Division of Budget’s forecast of an $87 million drop in projected subsidies from the Metropolitan Mass Transportation Operating Assistance account next year because of lower than anticipated tax revenues.  If there are further decreases in dedicated taxes or toll revenues because of the economy, there is very little slack remaining in this budget to allow for adjustments that won’t affect the riders, and we are very concerned about this state of affairs.

Today is a very appropriate date for this hearing, as this afternoon the Governor will be delivering his Budget Address and releasing the initial 2012-2013 executive budget.  This State budget will in a very real sense make or break the MTA’s budget for this coming year.  One of our major concerns is the changes that were enacted last month to the Payroll Mobility Tax, which is a major funding source for the MTA.  These changes created exemptions that will reduce funding to the MTA by $250 million and change the path by which the MTA is to receive an additional $70 million.

While the Governor and Senate and Assembly leadership have pledged to make up any Payroll Mobility Tax losses to the MTA dollar for dollar, these changes make the MTA’s finances much less reliable, since the receipt of these funds will now rely upon appropriations from general revenues rather than the receipts from dedicated taxes.  While we take the Governor, Speaker Silver, and Majority Leader Skelos at their word, we must also remember that the state has taken away $260 million in MTA funding over the last two legislative sessions and has a long history of allocating transit operating assistance to the MTA that should have been paid from general revenues out of a pool of dedicated taxes set up for the benefit of the MTA. The riders need strong voices to ensure that this diversion of funds does not happen again.

There is good news in the budget in that it proposes no financially driven service cuts, and MTA Chairman Joseph Lhota has indicated his intention to avoid additional service cuts.  We have to recognize, though, that the service cuts put into place on June 27, 2010 are still affecting riders and have not been reversed.  While there have been a few adjustments, for the most part the riders who were harmed by the service cuts are no better off today than they were immediately after these service cuts.  Despite the best efforts of several MTA Board members, there is no provision in this budget to reverse even the most damaging of the 2010 service cuts.  Unfortunately, the general rule for NYC Transit service changes is clearly that they must be cost and revenue neutral or they cannot happen.

The situation is the same with regard to elements of service that do not appear in timetables and schedules.  Staffing cuts in stations continue to have an impact on riders, as entrances remain unattended and station booths have been removed. Not only is NYC Transit losing revenue from fare evasion, it is frustrating and frightening riders who cannot readily locate help.  Programs that had been implemented a few years ago to determine the resources required to maintain stations at a decent level are gone. Instead, we now have pilot programs to see if NYC Transit can remove trash cans from the stations.

It’s not a good picture for the riders, and one of the only places that straphangers haven’t been told to expect less is at the farebox.  While there is no fare increase programmed for 2012 in the MTA budget, looming in the accompanying financial plan is a 2013 fare increase designed to yield 7.5 percent more revenue.  We expect to see the public hearings on these increases this fall.  This increase is of no small consequence, as NYC Transit riders pay almost 60 percent of the cost of their ride, which is by far the highest proportion of any large transit system in the nation.

The riders need your help.  We need to ensure that the MTA and New York City Transit is treated fairly in areas such as school transportation reimbursement and the disposition of City property that was conveyed to New York City Transit under its master lease.  We need for the City to return to its traditional role as a significant funder of capital improvements in the Transit system.  Finally, the riders need your voices.  We know that you realize the importance of the Transit system to the vitality of this City and its future.  We ask that you, together with us, make your voices heard at the State level.