The Metropolitan Transportation Authority is facing an unexpected budget shortfall, which could have consequences for commuters.
The MTA says tax revenues earmarked for the agency are $220 million less than the state projected. That's on top of a $143 million cut in funding under the state budget deal passed last week.
Earlier this year, the state bailed out the agency and instituted a new payroll tax to fund mass transit.
At that time, the MTA promised no fare hikes until 2011 and also scrapped plans for service cuts.
While the agency says fare hikes are still off the table, it says some difficult choices will have to be made in the agency's budget which comes out next week.
From Develop Don't Destroy:
Some simple math...
In 2005 the MTA appraised the 8-acre Vanderbilt Yards at $214.5 million. They then undertook a sham RFP process. Extell Development Company bid $150 million and Forest City Ratner (which wanted the Yards for its 22-acre Atlantic Yards project) bid $50 million. The MTA told Ratner that bid was too low and after six weeks of "negotiating" Ratner upped it to $100 million.
Ratner was then supposed to pay the MTA $100 million cash at closing. They didn't.
Fast forward to the summer of 2009. The MTA announces that it has "negotiated" a new deal with Ratner. Despite having Ratner over a barrel the MTA strikes a deal where Ratner pays only $20 million at closing. The rest would be paid over a 22 year period. The MTA and Ratner expected to close in 2009. But they haven't
$100 million minus $20 million is $80 million. At minimum the $200 million MTA shortfall, should be only $100 million and $120 million maximum. Of course had the MTA had a competitive bidding process for the Vanderbilt Yards there is a reasonable chance they'd have no shortfall this year.
Aaaaand this is why we need public authorities oversight.