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MTA Unveils 2011 – 2014 Financial Plan

The Metropolitan Transportation Authority (MTA) has released its 2011 Preliminary Budget and proposed Four-Year Financial Plan for 2011-2014. The proposed plan reflects unprecedented internal cost cutting initiatives undertaken in response to a $900 million shortfall for 2010. As a result of its cost-cutting actions, the MTA was able to limit the fare revenue increase to 7.5% in 2011. The Plan faces many risks, however, including the need for labor participation to control wage and benefit costs. The July Plan is preliminary; the MTA Board will consider a final Plan in December.

The Plan relies on three key components. The first is the continuation and expansion of the MTA's cost-cutting initiatives, which have saved more than $380 million in 2010, translating into more than $500 million in annual recurring savings and growing to more than $700 million by 2014. The second key to the Plan is controlling labor costs, which make up 2/3 of the MTA's operating expenses. The Plan acknowledges that in the current economic situation wage increases must be tied to productivity gains or other cost savings. The Plan therefore assumes that all employees – both represented and non-represented – would receive a "net-zero" wage increase for two years. Finally, the Plan includes the 7.5% increases in fare and toll revenue in 2011 and 2013 agreed upon with the Governor and Legislature as part of the MTA rescue package approved last spring, which also included a series of new taxes to support the MTA and funding for the first two years of the MTA's 2010-2014 Capital Program.

"The foundation of this Plan is the most aggressive and comprehensive overhaul in the history of the MTA," said Jay H. Walder, Chairman and CEO of the MTA. "These actions have allowed us to hold true to our commitment regarding fare increases while maintaining the quantity and quality of service that New Yorkers rely on every day. The State's ongoing fiscal crisis is one of many risks to the Plan, but with continued hard work and the participation of our labor unions I believe that this Plan can be achieved."

Financial Plan
Presentation to the Board
Press Release