TriMet faces budget shortfall for FY2013

Portland, Oregon's TriMet kicked off its Fiscal Year 2013 budget process three months ahead of schedule to begin developing options to respond to a projected $12 million to $17 million shortfall. The shortfall results from the continued recession and slow recovery, an anticipated cut in federal operating grants and costs associated with a new labor contract. The shortfall is part of the agency's FY13 operating budget that begins July 1, 2012. TriMet's FY12 operating budget is $444 million. "We have already cut $60 million from past budgets, but our financial challenges remain," said TriMet General Manager Neil McFarlane. "We face some tough decisions ahead and everything is on the table as we look to take corrective actions to close our budget gap and realign our cost structure." With employment and wage growth stagnant, TriMet expects to receive about $3 million less in payroll tax revenues than previously anticipated. TriMet receives $40 million to $45 million in federal funds for annual preventive maintenance. There is significant uncertainty in the federal budget, including the continuation of that funding level. TriMet is estimating a cut of $4 million. TriMet is working to bring the union contract in line with revenue growth and make it financially sustainable. The contract expired in 2009 and both parties are now heading to interest arbitration scheduled for mid-January 2012. A recent Employee Relations Board decision, which TriMet is asking ERB to reconsider, currently has eliminated potential wage and retiree benefit savings from the current labor arbitration. The ERB decision adds $5 million to $10 million to the FY13 budget shortfall, an amount that grows significantly in future years. There are also additional outstanding items related to the labor contract that could increase the shortfall further. TriMet will create a Budget Task Force with community members that will provide the general manager with recommendations on how to balance the budget. TriMet has limited options to lower costs and increase revenues. The task force will consider internal efficiencies, fare increases and service reductions.