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Rail News: Passenger Rail
7/26/2012
Rail News: Passenger Rail
MTA's financial plan shows balanced budget in 2012 and 2013, but deficits thereafter
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Yesterday, New York’s Metropolitan Transportation Authority (MTA) released a 2013 preliminary budget and July numbers for its 2013-2016 financial plan.
The good news: MTA is building on cost-cutting initiatives it launched in 2010 to help achieve a balanced 2013 budget. The bad: The authority’s financial situation remains fragile, and MTA projects a deficit in future years.
During the past two years, MTA has cut jobs, frozen wages for non-represented employees, and rebid health-care, dental and vision contracts. Those efforts generated $686 million in annual savings beginning in 2011; that figure is projected to grow to $745 million in 2012, $870 million in 2013 and $1.13 billion by 2016.
Assuming key components of MTA’s financial plan meet current expectations, the authority is expected to virtually break even in 2012, MTA officials said in a prepared statement. Those components are: continued receipt of dedicated taxes as projected, continued success of the MTA savings initiatives, three years of net zero labor cost increases and continuation of biennial fare and toll increases.
Agency officials project a similarly balanced budget in 2013. However, deficits of $129 million, $14 million and $231 million are projected for 2014, 2015 and 2016, respectively. That’s because MTA’s non-discretionary expenses — such as pension obligations, employee and retiree health-care costs, paratransit and debt service — continue to increase.
To help address the increasing costs, MTA plans to adopt a fare and toll increase of $450 million on an annualized basis in 2013 and $500 million in 2015.
The good news: MTA is building on cost-cutting initiatives it launched in 2010 to help achieve a balanced 2013 budget. The bad: The authority’s financial situation remains fragile, and MTA projects a deficit in future years.
During the past two years, MTA has cut jobs, frozen wages for non-represented employees, and rebid health-care, dental and vision contracts. Those efforts generated $686 million in annual savings beginning in 2011; that figure is projected to grow to $745 million in 2012, $870 million in 2013 and $1.13 billion by 2016.
Assuming key components of MTA’s financial plan meet current expectations, the authority is expected to virtually break even in 2012, MTA officials said in a prepared statement. Those components are: continued receipt of dedicated taxes as projected, continued success of the MTA savings initiatives, three years of net zero labor cost increases and continuation of biennial fare and toll increases.
Agency officials project a similarly balanced budget in 2013. However, deficits of $129 million, $14 million and $231 million are projected for 2014, 2015 and 2016, respectively. That’s because MTA’s non-discretionary expenses — such as pension obligations, employee and retiree health-care costs, paratransit and debt service — continue to increase.
To help address the increasing costs, MTA plans to adopt a fare and toll increase of $450 million on an annualized basis in 2013 and $500 million in 2015.