The MTA is in a world of budget hurt that will almost certainly lead to both fare hikes and service cuts next year.
The budget beginning in January will be almost $600 million short of what the agency predicted in July.
Over the summer, the MTA warned that its budget was running into big trouble as the taxes it counts on for revenue dropped. Of course, since that July forecast, the economy has gone from bad to worse.
For the remainder of 2008 the agency is down only $54 million. The biggest reason? Ridership (and therefore revenue from fare) is up.
That means no big emergency actions now but the pain is still coming -- big time. The new update shows next year's budget is now more than a half billion dollars worse than predicted in July.
The bottom line: The MTA will need to find $575 million starting in January. That means the potential for much larger fare hikes than already planned, 80s-style service cuts, or some new funding source (Federal stimulus package? Congestion pricing? New dedicated taxes?).
The MTA dropped this bomb to get ahead of the Ravitch Commission report (Dec 5) which will propose new revenue streams like congestion pricing or East River tolls and the Governor's budget (Dec 16).
In past years the MTA has often done this kind of "fare scare" in order to prompt Albany to act. This time, though, MTA insiders and outside watchdogs agree: The scare is no tactic. It's real, it's coming, and it's going to be very nasty for the city and region.