Higher Projected Deficit Could Lead To More Pain
The state of the MTA’s financial crisis continues to get worse by the day. Riders are expected to pay the ultimate price when the MTA’s doomsday scenario is officially enacted. However if things continue to progress in the current downward spiral, riders can expect even more fare increases or service cuts. As is usually the case, a lower than expected returns in tax revenue is to blame. William Neuman of the New York Times has more in this report:
An alarmingly sharp decline in state tax revenues could further undermine the finances of the Metropolitan Transportation Authority, according to a new projection made public on Monday. Combined with other recent forecasts of plummeting revenue, the data made it likely that, without a financial rescue from Albany, the authority might have to resort to additional service cuts or fare increases beyond the measures already proposed.
“What it suggests is that the M.T.A. will have to take additional actions in order to balance the budget,” said Gary Dellaverson, chief financial officer of the authority. He said that could include deeper service cuts or a second fare increase before the year is out, but he refused to give details of what was being considered.
In the latest forecast, released Monday in materials for a coming bond sale, the authority said the state had informed the authority that it should expect a shortfall as large as $200 million in revenue this year from a basket of taxes dedicated to mass transit, including portions of the sales tax and a tax on corporate profits.
That is more than double what the authority projected in February when it tried to gauge how its tax revenues would be affected if the decline in the region’s economy became much worse. At that time it estimated that if the economy hit bottom, its dedicated state tax receipts could be down by as much as $82 million.
Making the picture even bleaker, the projected shortfall in dedicated taxes is in addition to a previously disclosed drop in revenue from taxes on real estate transfers and mortgages. For just the first three months of the year, those taxes were $123 million below the levels written into the authority’s budget.
Click here for the complete report.
Sometimes just reading or talking about this crisis gets to me. The thought of the MTA going bankrupt is a real possibility at this rate especially if Albany does not come up with a legitimate financial package. Do the lawmakers up there still think this is just the MTA portraying the boy who cried wolf? The facts are out in the open & it is clear that this is a serious crisis which needs a fix now. If Albany fails to act, the repercussions will be felt by millions for years to come.
xoxo Transit Blogger
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