Barely a month after approving a fare hike and major service cuts to close a budget gap, New York's Metropolitan Transportation Authority has announced that its budget is now an additional $400 million out of whack.
The widening budget hole stems from significantly lower than projected revenues from the Regional Mobility Tax, a payroll tax implemented last year as part of an MTA budget bailout package. Projected revenues for the 2009-2011 period have dropped $700 million, from $4.17 billion to $3.47 billion, according to a report in the New York Daily News.
The bigger deficit raises the possibility that the MTA will raise fares more than the 7.5 percent already approved to take effect this summer. The previously approved fare hike was part of a package of moves intended to close a $383 million budget deficit for the current fiscal year. Transit advocacy groups and unions have organized rallies to protest cuts in service also approved as part of that package. The cuts will eliminate several bus routes, scale back service on dozens more, and reduce the frequency of trains on a number of subway lines.
Riders aren't the only ones who will feel pain thanks to the larger deficit. Moody's Investors Service announced yesterday that it is lowering its rating of New York MTA bonds one notch, to A3, because of the deteriorating revenue picture.
Written by Sandy Smith
For HULIQ.com
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