Pataki Transit Speech Eagerly Awaited for Talk of Surplus

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The New York Sun

While Governor Pataki is scheduled to speak to the building industry Friday about the $2.9 billion transportation bond act, transit industry observers are eager to see what, if anything, Mr. Pataki may say about the transit authority’s projected $928 million surplus.


Words they don’t want to hear from the governor include “lockbox” and “rainy day fund.”


Such utterances, which suggest a path of financial prudence, have been heard in past years when governors and mayors made promises that the money from surpluses would be saved to forestall future fare hikes. Instead, they have used the surpluses as a reason to reduce city and state contributions to the Metropolitan Transportation Authority.


“If they put the money in a rainy day fund, keep an eye on their hand because it’s like a three-card-monte game,” the senior attorney for the Straphangers Campaign, Gene Russianoff, said. “When money is put in a lock box or rainy day fund, it almost never goes where it’s originally intended to go.”


In 1994, Mayor Giuliani withdrew the city’s $128 million contribution toward reduced and free subway rides for students in the city just as transit officials announced a surplus of similar size. The next year, Governor Pataki made his own cut, using a $220 million transit surplus as an excuse to funnel state funds into the state’s general budget instead of to the MTA.


If the MTA appropriates its surplus for specific uses rather than having it as cash on hand, the governor and mayor will not be able to point to that money as a reason to cut back government funding of the authority.


Some transit experts said they believe that support within the MTA for the idea of building a platform over the West Side rail yards, first proposed by the authority when it announced its surplus in July, is waning. They said the ideas of paying off pension liabilities and investing in the maintenance of the system, widely seen as more prudent courses, are gaining traction.


A spokesman for the MTA, Tom Kelly, said: “To the best of my knowledge, nobody has ruled anything in or anything out.”


Some believe talk of the MTA even having a surplus is misguided, since budget deficits are predicted starting in 2007, when the next fare hike is scheduled to go into effect.


“Ultimately fares have to go up, and the conversation should be how we need to invest in the system over the long haul,” the deputy research director at the Citizens Budget Commission, Elizabeth Lynam, said.


The commission opposes the bond act – proposal no. 2 on the November 8 ballot – because New York already has more debt than most states.


Since 1995, the amount of money contributed to the MTA by the city and state has fallen, according to the Independent Budget Office. The MTA has made up for this by borrowing money.


The president of the Regional Plan Association, Robert Yaro, referring to past surpluses that have been used to plug city and state budget gaps, said he hopes the governor will make clear that the surplus will be used to reduce the financial obligations of the MTA.


“We will be listening intently to see what his thoughts are about this issue,” Mr. Yaro said.


The New York Sun

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