The budget will preserve the continuing roll-out of subway and railroad service increases identified last spring and adopt fare and toll increases that were proposed in October and amended during recent weeks in response to public comment. The budget assumes small cash balances available at the end of 2013 and 2014 that will be rolled forward to help address deficits in the following years that will total more than $330 million by 2016. Fare increases will take place on or about March 1.
The budget moves forward largely as envisioned last July, despite the impact of Superstorm Sandy. The MTA estimates the storm caused $268 million in lost revenue and additional operating costs in 2012 and will result in additional debt payments of as much as $62 million annually attributable to infrastructure losses not recovered from insurance or federal disaster relief.
Despite continuing growth in nondiscretionary costs such as pensions, health care, energy, paratransit and debt service, the budget is in balance in large part as a result of the MTA's most aggressive internal cost-cutting ever undertaken, resulting in annual recurring savings of $809 million in 2013, which grows to more than $1.2 billion in 2016.
Although deficits are predicted for future years, the budget assumes that there will be no budget-driven service reductions in the foreseeable future and that fare increases will be limited to a continuation of the inflation-adjustment-style increases every other year, as agreed upon with the State Legislature in 2009.
In other MTA news, Chairman and Chief Executive Officer Joseph Lhota is resigning from his positions, effective at the end of the day on Dec. 31, 2012.
Lhota assumed the position of executive director on Nov. 14, 2011, and was confirmed as chairman and CEO by the New York State Senate on Jan. 9, 2012.
The MTA Board voted to name board member Fernando Ferrer as vice-chairman, succeeding Andrew Saul. When Lhota's resignation takes effect, Ferrer will serve as acting chairman of the MTA Board until a successor is appointed.
Thomas Prendergast, the president of MTA New York City Transit will serve as interim executive director of the MTA when Lhota's resignation takes effect.