Editorial Says Straphangers Are Being Treated Unfairly
The bleak picture of the MTA’s finances is news to no one at this point. Riders should expect to have to shoulder the majority of the burden that the MTA is under due to the inept actions of former leaders such as Gov. Pataki & MTA Chairman Peter Kalikow among other people & actions. An editorial that will appear in today’s edition talks about how the city & state are treating the straphangers unfairly due to the city & state leaving the MTA hung out to dry in the funding department:
Heaven help you if you are among the New Yorkers who own a home, buy clothing, hold a job and rely on mass transit. You are going to pay and pay and pay and pay still more because the state and city say they need you to pay and pay and pay still more.
The Metropolitan Transportation Authority Monday joined the roster of governmental bankrupts with a warning that, barring a huge infusion of cash, it will be forced to boost fares on subways, buses and commuter railroads next year – while severely cutting service.
Paying more and getting less has become New York’s recurring nightmare as Wall Street tax revenue has shriveled in the global financial crisis.
Last week, Mayor Bloomberg called for canceling real estate tax breaks along with hiking the income tax and sales taxes on clothing. Next week, Gov. Paterson is to propose the first in a series of mammoth budget cuts that would slash aid for everything from schools to hospitals.
And now, the economic downturn that cut the legs out from under the state and city has pushed the MTA’s already shaky finances into an abyss.
In July, the agency proposed an 8% rise in the fare for next year to balance the books. That was bad enough, but it wasn’t nearly as painful as the increase that’s in the offing. A hike of 20% is well within the realm of possibility.
Working- and middle-class New Yorkers cannot withstand a hit of that magnitude on top of getting squeezed from every other direction. Nor can the city afford to let deteriorating mass transit drag down the quality of life and further damage the region’s economic health.
Click here for the complete editorial.
I’m exhausted right now as I type this. Lets just say I feel the editorial is very accurate & helps paint part of the bleak picture that is the MTA & its finances.
xoxo Transit Blogger
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Brooklyn Borough President Comments On East River Bridge Toll Proposal
The plan is not a secret to anyone who has not lived under a rock recently. The Ravitch Commission is in charge of recommending new ways for the MTA to bring in different sources of dedicated funds. One of the proposals that is to be submitted as part of next month’s report calls for tolls to be added to 4 East River Bridges which consist of the 59th Street, Brooklyn, Manhattan, & Wiliamsburg Bridges. In what should come as no surprise, Brooklyn Borough President Marty Markowitz had something to say about the proposal:
“Haven’t we been down this road before? I have said it before and will say it again: East River tolls are discriminatory, impractical, and impose an unfair ‘tax’ on the outer boroughs—especially Brooklyn. Three of the four un-tolled bridges—the Brooklyn, Manhattan and Williamsburg—are in Brooklyn, and because some parts of our borough have limited or no access to mass transit, drivers, including those who use their vehicles for small businesses, have no choice but to use these spans. Additionally, even with advances in E-ZPass technology, tolls will create even worse traffic backups for communities such as Downtown Brooklyn, Williamsburg, DUMBO, and the ‘Brownstone Belt’ of Carroll Gardens, Cobble Hill, Brooklyn Heights and Boerum Hill, which already suffer.
It is, of course, imperative to find ways to close the City’s growing budget gap in these tough economic times—but placing the burden unfairly on the backs of hard-working Brooklynites is not one of them.”
I am not surprised that Marty has come out against the tolls. He like many others find this proposal to be an attack on residents of the outer boroughs, in this case Brooklyn. I personally do not support this proposal at this time. Although I can sympathize with his feeling for those in his borough, even he has to admit that the MTA’s financial health is more important than just one borough. Before I could ever agree to this proposal, I would like to see the MTA scratch & claw for every dollar they can in terms of fat trimming, consolidation, along with any aid they rightfully deserve. If they truly do that & are out of other ideas, maybe then I could support this plan.
xoxo Transit Blogger
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MTA CFO Responds To New York Times Report
8 days ago I wrote an entry which talked about how the MTA’s global bond investments backfired. The entry was the result of a New York Times piece on how investments in C.D.O.’s (Collateralized Debt Obligations) backfired for many agencies including the MTA. The report has lead to MTA’s Chief Financial Officer Gary J. Dellaverson sending a letter to the New York Times & this is what he had to say:
“From Midwest to M.T.A., Pain From Global Gamble” (“The Reckoning” series, front page, Nov. 2) reports that “New York subway officials were also being wooed by bankers” to pursue variable-rate bonds.
The Metropolitan Transportation Authority has used these bonds to diversify its traditional fixed-rate debt since the 1980s. This mix provides the most cost-effective financing for the M.T.A.’s capital program of more than $23 billion, with variable rate bonds saving the agency nearly $44 million just this year alone.
The M.T.A. did what was prudent for any governmental issuer of its size — it compiled a list of qualified banks, selected not on the quality of the sales pitch, but on market acceptance and ratings of the institution. The M.T.A. currently uses 14 major domestic and international banks in its variable rate portfolio, of which Depfa is but one.
As the M.T.A. continues to grapple with the volatility in the financial sector as well as the impact of the economic slowdown on the “real” economy, it will keep its riders’ interests first and foremost by managing risk with supplier and product diversification.
Gary J. Dellaverson
Chief Financial Officer
Metropolitan Transportation Authority
New York, Nov. 6, 2008
xoxo Transit Blogger
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TWU Local 100 Regains Dues Check-Off Status
The 2005 Transit Strike hurt many people from the riders down to the actual union who represented the workers who went on strike. Due to their strike, TWU Local 100 was hit with serious penalties including losing their “dues check-off” status. This status enabled them to automatically collect union dues from members’ paychecks. The union tried to get this status re-enabled last year but their request was denied. William Neuman of the New York Times has more on this victory for TWU Local 100 in his report:
A Brooklyn judge on Monday lifted the last remaining penalty against the transit workers union for its 2005 strike, saying that the union could once again begin collecting dues directly from members’ paychecks.
Transport Workers Union Local 100 had lost what is known as dues check-off in the aftermath of the strike, which violated the state’s Taylor Law barring strikes by public sector unions.
The union was also fined $2.5 million.
The dues check-off was suspended in June 2007. As a result the union’s revenues dropped significantly, with the shortfall in collections likely totaling millions of dollars.
Many members signed up to have their dues deducted automatically from their bank accounts. But some members stopped paying dues altogether while others paid only some of their dues.
The union represents subway and bus workers and has about 38,000 members.
Click here for the complete report.
I’m sure Roger Toussaint is thrilled with this victory. I know how hard it was for them to collect dues as many employees I knew did not keep up with paying them.
xoxo Transit Blogger
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Service Cuts Are Looming
Three days ago I responded to a comment left by one of my regular readers Abba. She asked if I felt service cuts would happen. I responded by saying “If I had to give a percentage on the chance of service cuts, I would say 5% as of this message.” Unfortunately after yesterday’s special meeting of the MTA Finance Committee, I was way off with the percentage I stated. As I discussed yesterday afternoon, the MTA announced at the meeting that their budget deficit ballooned up to $1.2 billion dollars. Later in the evening both the New York Daily News & New York Times filed reports on the meeting & looming service cuts. Lets start with Pete Donohue’s report for the New York Daily News:
Straphangers will suffer a “Draconian” array of double-digit fare hikes and service cuts next year unless the state helps rescue the MTA, officials warned Monday.
Metropolitan Transportation Authority officials wouldn’t release details of a still-developing doomsday budget plan, but sources said bus riders – particularly on express routes – would likely see the biggest cuts.
Subway riders would see fewer trains, especially on lines with parallel service, such as the Broadway line in Manhattan, where N, R and W trains run, sources said.
Layoffs also are on the table, officials said.
“The word ‘Draconian’ is not inappropriate,” MTA CEO Elliot Sander said.
The projected 2009 MTA budget gap has ballooned by $300 million, to $1.2 billion, officials announced at the meeting.
Click here for the complete report.
Now lets look at William Neuman’s report for the New York Times:
Plummeting real estate and corporate tax collections will cause the Metropolitan Transportation Authority’s budget gap to balloon next year to a projected $1.2 billion, making it increasingly likely that there would be deep service cuts and a fare increase of more than 8 percent, officials said Monday.
“The word draconian is not inappropriate,” the authority’s chief executive, Elliot G. Sander, said on Monday, when asked about the potential service cuts. Mr. Sander spoke after a special meeting of the finance committee of the authority’s board, which was called to discuss the worsening budget picture.
“I think that they will be very, very significant,” Mr. Sander said of the cuts. “Whatever that mix that we come up with, in terms of fare and toll increases or service reductions, there is no question they would have an impact, significantly, on our customers and on the functioning of our region.”
Mr. Sander provided no details of the service changes that he was contemplating; he said he would discuss specific cuts at a meeting of the authority’s full board on Nov. 20.
After the authority revealed its preliminary 2009 budget proposal in July, the authority’s operations heads were asked to make suggestions for spending cuts of up to 4.7 percent, which officials said would almost certainly include severe reductions in service. Since then, the deficit projection has grown by $300 million, and Mr. Sander said on Monday that he has now asked those operations heads to propose even deeper cuts in their budgets. He refused to say how much more they were asked to trim.
The authority’s original budget plan called for a series of measures intended to close what it predicted then as a $900 million gap.
Those included more than $200 million in additional aid from the state and the city, which Mr. Sander acknowledged on Monday would not be forthcoming because the state and the city were also facing deep budget cuts.
The preliminary budget also called for an 8 percent increase in fare and toll revenues, starting in July, which would generate an additional $200 million.
Click here for the complete report.
Well the news just doesn’t get better for the MTA or the riding public. What can only be seen as comical in a non amusing way, the additional $200 million that was to be generated from the original projected 8% fare increase will turn out to not be additional money. Due to the budget deficits that the city & state face, the MTA expects to not received the promised contribution of you guessed it, $200 million dollars.
If this meeting did not throw a bucket of cold water on our government to realize that they need to find a way to help the MTA, I don’t think anything will. The sad thing is if things continue at this pace, our transit infrastructure will start to fall apart & go back to the dark days of the system. When elected officials scratch their end wondering what happened, they could look back at the numerous warnings that were out there from this blog to the MTA leadership & everything in between.
xoxo Transit Blogger
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