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NYT: M.T.A. Moves to Slash Pay and Service

December 12, 2009

As Dagny warned us earlier this week, the anticipated slash and burn tactics of the MTA are coming to the fore in light of their persistent budget problems.

The 6,000 nonunion employees of the Metropolitan Transportation Authority would have their salaries cut by 10 percent and subway, bus and commuter rail service would be sharply reduced under a plan to plug a new shortfall of about $340 million in the agency’s budget, according to an official familiar with the plan.

Many of the cuts in the plan — which is being recommended by the authority’s chairman, whose salary would also be reduced — were approved a year ago and then rescinded in the spring after the Legislature passed a limited rescue package. Bus service in New York City would be particularly hard hit; two minor subway lines, the W and Z, would be eliminated; and waiting times for riders, particularly during off-peak hours, would grow.

The chairman, Jay H. Walder, who took office in October and is paid $350,000 a year, plans to present the package on Monday to the Finance Committee of the authority’s board. The full board is to take up the plan, part of the authority’s 2010 budget, on Wednesday. The Daily News reported some of the planned service cuts on Friday.

The official who disclosed the planned pay cuts spoke on the condition of anonymity because the authority’s staff had not been authorized to discuss them.

The official said that Mr. Walder planned to use the threat of the pay cuts to motivate the leaders of the authority’s component agencies — including New York City Transit, the Long Island Rail Road and the Metro-North Railroad — to come up with alternative administrative savings.

Both the service and the pay cuts, which could last indefinitely, would take effect on April 1. The pay cuts, which would save $62 million a year, would probably be carried out through furloughs or through a paycheck lag, in which the authority would delay, for months or even years, paying workers part of their salaries.

The authority’s financial picture has darkened considerably since its preliminary 2010 budget was unveiled in July.

First, Gov. David A. Paterson, who has warned that the state is running out of cash, ordered a $143 million reduction in state financing for the authority.

Then, on Monday, the authority announced that revenue from a payroll tax for transit that the Legislature approved in May was running $200 million less than had been expected, a setback that the authority’s chief financial officer, Gary J. Dellaverson, called “a shocking development.”

While the pay cuts would represent a measure of shared sacrifice by Mr. Walder and other transit executives, riders are likely to bear the brunt of the pain if no additional revenue surfaces by the spring.

The budget proposal that Mr. Walder plans to present on Monday includes service reductions nearly identical to those approved last December and rescinded in May.

In addition to the elimination of the W and Z lines, which supplement the N and J lines, respectively, the reductions would have included a shortening of the G and M lines, and a cut in the frequency of train service during the middle of the day and on weekends, evenings and late nights.

Under the plan approved last year, the number of station booths and agents would also have been slashed. And 56 bus routes would have lost service altogether on weekdays or weekends, with other types of service reductions on an additional 29 lines.

The proposed service cuts are likely to generate an outcry among riders, as they did a year ago. And the state government is unlikely to provide relief.

Mr. Walder has so far ruled out a fare and toll increase in 2010, and the official who discussed his plans said the chairman had no intention of revisiting that decision. However, the authority’s latest 2010 budget plan, released on Nov. 18, calls for 7.5 percent increases in fare and toll revenue in 2011 and 2013.

In general, the users of the authority’s transportation network bear a greater burden for supporting the system than do commuters in other regions.

Even with the payroll tax adopted by the Legislature in the spring — in response to recommendations by a commission led by Richard Ravitch, now the lieutenant governor — dedicated taxes and subsidies were projected as of November to generate only $5.3 billion for the authority in 2010, compared with $6.4 billion from fares, tolls and other operating revenue.

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From The New York Times.

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