February 24, 2010 / 10:15 PM / in 8 years

'Dire' NY MTA finances may mean another fare hike

NEW YORK (Reuters) - The financial problems confronting New York’s Metropolitan Transportation Authority are so “dire” that straphangers might be hit with a fare hike this year, one year sooner than planned.

Chairman Jay Walder, speaking at a Webcast news conference on Wednesday after a board meeting, said that while he wanted to stick with the plan of raising bus and subway fares and bridge and tunnel tolls every other year, “the financial situation is even grimmer than it was a month ago; we’re watching a declining situation, and still I‘m working very hard to close the magnitude of the gap we have right now.”

The biggest U.S. mass transit agency, with around 9 million daily riders, raised fares just last year. But tax revenues have repeatedly come up short. Walder estimated $750 million of revenue has been lost since December.

Next week, a series of public hearings will begin on drastic service cuts that the agency proposed late last year to close what was a $400 million shortfall.

Walder warned that some of these measures will result in more layoffs, in addition to the more than 1,000 union and nonunion jobs the MTA said on Tuesday would have to be abolished to close soaring deficits.

“The savings that come from these changes will involve more layoffs if the proposed changes are enacted following the public hearing process,” he said.

If, for example, a bus route is cut, the driver and some of the maintenance staff no longer are needed, Walder explained.

The plan announced on Tuesday includes laying off 500 station agents.

Walder rejected criticisms that these workers help keep subway riders safe.

Over 2,500 police officers and 2,000 cleaners are ”moving around our stations“ at all times of day ... and I think we’re providing a safe and secure system, and will continue to do so,” he said.

The MTA, which runs New York City’s buses, subways and commuter railroads and several major bridges and tunnels, employs around 70,000 people. In December, Walder predicted about 700 layoffs would be needed.

The service cuts include ending free subway rides for students. Walder said restoring that benefit, now enjoyed by suburban pupils, depends on getting extra city or state aid.

Asked how he would deal with any “pushback” from the unions, Walder pledged to follow their contracts’ layoff procedures.

The MTA has are around 10 unions, including the Transport Workers Union Local 100, which nearly shut the city down in the winter of 2005 when it went out on strike.

He could not estimate how much it will cost to lay off nonunion workers as that depends on how many opt for a severance package with a maximum payout of $20,000 per person.

Editing by Jan Paschal

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