When Cuts Are Not Enough
New York MTA chief Jay Walder penned an op-ed for the New York Post yesterday in which he details the cost-saving measures the agency has come up with to help close a $750 million budget gap. The gap is the result of cuts in state funding for mass transit as well as long-term neglect by the city and state.
This op-ed seems designed to please those that have been howling at the MTA to reduce costs. But cuts alone will not be sufficient to address the long-term structural problems in the MTA’s finances. Debt service is strangling the agency. The MTA paid $1.4 billion this year out of its operating budget—the money to keep the trains and buses moving—to pay for borrowing from years past. By 2013, the MTA will pay $2.4 billion in debt service.
It is encouraging that the MTA is identifying cost-savings measures that will not impact current levels of service or safety. But without a steady stream of new revenue—in the form of, say, congestion pricing—to fund the MTA’s capital needs, the MTA will never be able to cut it’s way out of its deficit.