(The following story by Steve Ritea appeared on the Newsday website on July 22.)
NEW YORK — Long Island Rail Road riders could face a roughly 8-percent fare hike next summer as part of a round of systemwide increases if the Metropolitan Transportation Authority’s financial outlook doesn’t improve before the end of this year, an official said yesterday.
Speaking on condition of anonymity, an official who had been briefed on the plan said that and other measures designed to help the agency grapple with a roughly $900-million deficit projected for next year will be unveiled at the board’s meeting tomorrow.
One element of the cost-saving measures would also involve capping MTA’s funding of Long Island Bus at $10 million. That could create problems for the bus agency, which relied on $20.3 million from the MTA this year and $14 million in prior years.
For months now, a steady decline in real estate tax revenue, coupled with rising fuel costs, among other factors, have eroded an MTA surplus originally projected at around $350 million by the end of this year. Now, the official said, it’s expected to shrink to less than half that by December.
Officials previously said they expect to use that surplus to mitigate a deficit projected for the 2009 budget year. Barring any change in the current forecast, the source said, the MTA now faces a deficit next year of roughly $900 million. At the start of this year, that deficit was pegged at around $200 million.
In March, the MTA raised fares an average 3.85 percent on the LIRR and systemwide. Officials previously said they expected the next increase to occur in early 2010 in an effort to keep pace with inflation.
The current proposal – if the MTA’s revenue picture remains unchanged – would move a fare hike up by six months, to July 2009, the official said. The increase would call for an 8 percent increase in revenue, they said. Historically that percentage has roughly equaled hikes on the LIRR and Metro-North.
The board would vote to hold hearings on the increases in December and vote on any increases in the spring, the official said.
Higher fares will make up only part of the roughly $900-million deficit, with internal belt-tightening at the MTA, and state and city assistance playing equal roles, the official said.
The MTA is not proposing cuts to service or maintenance.
At Long Island Bus, capping the MTA’s contribution at $10 million is likely to fuel a long-standing feud between MTA and Nassau County.
Under a unique 35-year-old agreement, the MTA operates buses for the county. The agency and the county have been at odds over which has responsibility for paying for the system. This year, Nassau contributed $10.5 million to LI Bus, less than the MTA’s subsidy.
Other cost-saving measures include forcing city and state agencies to cover the cost of their E-ZPasses. Free passes cost MTA about $10 million each year, the official said.
SAVINGS PLAN
Facing what may become a $900-million deficit next year, the MTA is expected to try these methods to make up the shortfall without cuts in service:
$45 million: Internal belt-tightening over the next four years
$135 million: Borrowed from an account that funds retirees’ medical costs
$120 million: Unspent funds from a 2006 surplus
$10 million: Capping subsidies to Long Island Bus at $10 million ($20 million spent this year)
$10 million: Asking other city and state agencies to pay for their employees’ E-ZPasses
$60 million: Expected elimination of federal mandates
$100 million: Greater city and state subsidies for students’ and seniors’ fares
$110 million: Increased city funding for paratransit
$60 million: Tax restoration from state for revenue MTA expected but never realized
$50 million: Closing tax loopholes
$200 million: An 8 percent fare hike in mid-2009