NEW YORK (Reuters) - The New York Metropolitan Transportation Authority’s budget gap may grow more than expected and spur bigger fare and toll hikes unless the service makes deeper cost cuts, the state comptroller said on Friday.
The deficit is currently forecast at $537 million next year but could rise as high as $860 million, Comptroller Thomas DiNapoli said in a new report.
To avoid fare and toll increases that exceed those already planned, “The MTA has to squeeze out every penny of wasteful spending,” he said.
The cash crunch facing the MTA, which runs New York City’s buses, subways, commuter rail roads and several major bridges and tunnels, has already forced it to slash overnight service, lay off administrators and unionized station agents. It has also abolished some bus and subway lines.
The MTA last raised fares and tolls in 2009, lifting the price of a bus or subway fare to $2.25. The agency plans to increase fares and tolls every other year, and expects the hike in 2011 and 2013 to increase them by 7.5 percent.
But “unless the MTA successfully reduces costs, or less likely, obtains additional governmental aid, fares and tolls may increase sooner or faster than currently planned,” said DiNapoli.
Since 2002, fares and tolls have risen nearly 44 percent, the comptroller said. The agency’s spending has grown by an average 7 percent in the past five years.
In a separate statement on Friday, the MTA revised its five-year capital spending plan by cutting nearly $2 billion, reducing the total to $26.3 billion.
The agency has been criticized for its failure to rein in construction cost overruns and has some massive projects underway.
DiNapoli pegged the MTA’s outstanding debt at $27.5 billion — 54 percent more than five years ago — and said debt service will hit $2.2 billion by 2013 from $1.4 billion in 2009.
Sliding real-estate linked tax collections and an unexpected shortfall in a payroll tax the state government created to help shore up the MTA’s finances are additional hazards, the comptroller said.
Reporting by Joan Gralla; Editing by Chizu Nomiyama