NEW YORK – The Metropolitan Transportation Authority Thursday released its final proposed 2009 budget and November Financial Plan for 2009-2012.

The MTA is required to pass a balanced budget by the end of the calendar year, and a final plan will be considered by the MTA Board at its December 17 meeting. The Board voted Thursday to authorize the MTA staff to begin the public hearing process for potential fare/toll increases and service cuts.

The proposed budget addresses significant budget gaps in 2009 and beyond due to plummeting tax revenues, higher fuel costs and elevated debt service obligations. In anticipation of pending deficits, the MTA undertook numerous cost-cutting measures beginning last year, including integration of its three bus companies, consolidation of back office functions and a six percent reduction in controllable costs over four years. With the vast majority of the agency’s staff devoted to service, operations and maintenance (only seven percent are in administration), however, the impact of the recent economic crisis could not be covered without service cuts and fare/toll increases.

To bridge the gap, in addition to actions proposed in July, each MTA agency proposed 4.7 percent cost reductions, including at least a five percent reduction in managerial costs. Proposed service reductions were identified because they could be implemented without compromising safety or security, and still provide MTA customers with alternative options for reaching their destination. The remaining deficit was made up by a 23 percent increase in the revenue yield from fares and tolls beginning in June 2009. This increase is projected to generate approximately $670 million in 2009.

Before any gap-closing measures are implemented or prior-year carryover is included, the MTA’s budget deficits are projected to reach $1.441 billion in 2009, $2.394 billion in 2010, $2.647 billion in 2011, and $2.972 billion in 2012. The budget gaps are to be filled through actions from the MTA itself, its employees, governmental partners and customers.