New York’s MTA releases preliminary 2012 budget, plan to fund capital program investments

The New York Metropolitan Transportation Authority released its 2012 preliminary budget and July financial plan for 2012 to 2015. The plan is expected to achieve a balanced budget while avoiding service cuts and fare and toll increases in 2012. It also addresses the need for a financing strategy for the final three years of the MTA's 2010 to 2014 capital program. The July plan is preliminary; the MTA Board will vote on a final budget in December. The plan has four components: a focus on cost cutting; a three-year zero wage increase initiative; continued implementation of biennial 7.5 percent fare/toll increases in 2013 and 2015; and continued receipt of taxes and subsidies. The plan builds on $525 million in recurring savings achieved in 2010. The capital program is focused on achieving two main objectives: protecting the safety and reliability of the transportation system by maintaining and improving key infrastructure. The MTA's strategy for addressing the capital program's funding gap starts with making choices to stretch available investment dollars. These savings will be achieved by reducing capital administrative staff by 15 percent, reducing the cost of train and bus purchases and partnering with contractors and labor to reduce bid costs. The MTA has identified an innovative and pragmatic financing strategy to fund the final three years of the program: a $2.2 billion federal loan, $4.7 billion in MTA revenue bonds and a manageable debt level with existing capital funds to repay the federal and MTA debt as well as local partnerships ($1.7 billion) and asset sales ($.89 billion). Full details of the Financial Plan are available online at http://www.mta.info/mta/budget/july2012.html.