Uncertain times for straphangers with $200 billion budgetary hole
The MTA’s budget has suddenly derailed, and it’s left agency officials scrambling to get back on track by year’s end.
The agency was hit with a $200 million budgetary bombshell Monday, when officials found out cash from the new payroll tax fell 20 percent below projections for this year. The MTA’s chief financial officer called the news “shocking,” saying it will force them to make “very difficult choices.”
The blow comes on top of a $143 million cut in state aid handed down last week.
The MTA still intends to avoid fare hikes next year, agency spokesman Jeremy Soffin said. Some of the burden will be absorbed in the 2010 budget, but officials could not detail Monday how they will fill the remaining shortfall.
“There were will be serious impacts in this budget,” Soffin said.
Prior to enactment of the payroll tax, officials considered dozens of service cuts, including the elimination of bus routes and less frequent subway service. The agency board has to close the budgetary hole next week, when the MTA votes on its 2010 budget. Board members, who are responsible for the MTA’s finances, were reeling from the news.
“This is very bad stuff,” said board member Andrew Albert, board member. “There’s not much more spending to control.”
MTA officials could not say Monday why receipts from the tax levied on employers had plummeted. The tax, part of the MTA rescue plan passed earlier this year, was supposed to raise $1.5 billion a year.
“Paterson should take a hard look at whether state tax officials have done a decent job collecting the new payroll tax,” said Gene Russianoff, of the Straphangers Campaign.
According to sources, non-compliance only fueled a small portion of the hole. The MTA relied on state projections in estimating revenue from the tax, Soffin said.
A state budget spokesman said it was "premature" to say what caused the shortfall. State taxes are down overall, and big job losses likely took a toll on the payroll tax, according to the state Comptroller’s office.
Riders expected the worse.
“We New Yorkers get the raw end of the deal when they make these cuts,” said Ashton Reid, 33, of Rego Park.
Phoebe Kingsak contributed to this story.