NY's transportation agency projects deficits from 2012

NEW YORK (Reuters) - New York's Metropolitan Transportation Authority expects to end 2012 with a $46 million cash surplus, officials said on Wednesday, as they unveiled a "risk-laden" financial plan that projects deficits for 2014 through 2016.

Balancing the MTA's budget depends on negotiating a three-year contract with unionized transit workers that has no wage hikes unless current restrictive work rules are amended or workers would pay more for healthcare, officials said.

"Our budget is fragile; I prioritize it probably as our No. One risk," Chairman Joseph Lhota told reporters after a board meeting. "Layoffs are not on the table," he said, adding he hoped to negotiate a new labor agreement by year-end.

Officials said such an accord would save the MTA $307 million and noted the MTA's managers have not had a pay increase since 2008.

John Samuelson, president of TWU Local 100, said transit workers deserved a cost of living increase. "We're not eating three zeroes," he said.

The authority runs New York City's buses, subways, commuter railroads and some major bridges and tunnels.

There is a precedent that could make the MTA's labor negotiations more difficult. Chief Financial Officer Robert Foran said another transit union had won raises of 4 percent in each of the first two years, followed by a 3 percent increase in the third year.

The MTA said in a statement that after another positive balance of approximately $46 million in 2013, it was projecting a $129 million deficit in 2014, a $14 million deficit in 2015 and a $231 million gap in 2016.

Those estimates include the $450 million the MTA expects to raise from toll and fare hikes it plans to start on March 1, 2013, 60 days later than initially scheduled. It also plans another toll and fare increase in 2015 to raise $500 million.

The MTA's current budget is nearly $13 billion, and Foran said non-discretionary costs were the main factors creating the outyear budget gaps. Those expenses include pensions, energy, healthcare, debt service and paratransit transportation for the disabled, all of which have been rising at multiples of the 1.8 percent inflation rate.

From 2011 to 2013 the cost of those five items is projected to rise by $1 billion, and by another $1.5 billion by 2014, Foran said.

In 2013, the MTA expects to spend $4.2 billion on payroll, $2.3 billion on debt service, $1.4 billion on health and welfare costs, and $1.3 billion on pensions, according to a briefing book. Fares paid by passengers should raise nearly $5.5 billion, while motorists will pay almost $1.6 billion in tolls.

The MTA gets a portion of taxes collected in the state, which should bring it $4.7 billion.

This year, the authority expects to save nearly $700 million through a variety of measures, including a 20 percent cut in the number of managers working at its midtown Manhattan headquarters.

From 2013 to 2015 the total savings target is $2.33 billion, which partly will be achieved by getting rid of 3,000 cell phones, 2,100 computers, 2,100 servers and 325 fleet cars.

(Editing by M.D. Golan)

Source: http://news.yahoo.com/nys-transportation-agency-projects-deficits-2012-205850808--finance.html

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