Giuliani Cuts Transit In Wake of Operating Surplus

On the heels of an announced Transit Authority budget surplus, Mayor Giuliani again announced deep cuts in NYC's contribution to Metropolitan Transportation Authority. The cut announced Tuesday would be $113 million, about $10 million more than the surplus announced by the

Transit Authority last week. The TA surplus resulted from higher than expected ridership. In defending the cuts, Giuliani attacked the MTA, claiming that the agency has "one of the highest paid executive staffs in the city and the state" and that MTA belt-tightening could hold off a fare hike.

Transit officials countered that the surplus was evidence of effective management by the Transit Authority. Technically, the Mayor's cut seeks to shift the cost of subsidized student fares from the City to the MTA for this year, though the Mayor is also seeking to permanently shift most of the

burden for that program to the State.

Giuliani's overall budget-cutting proposal was heavily criticized by City Council members this week. His transit cuts received special comment from NY Assembly Speaker Sheldon Silver, who said that change in the financing formula for student transportation would face an uphill battle in

Albany, and who said Giuliani's possible precipitation of an early fare hike could reduce ridership and hurt the Transit Authority budget further. "If the City withdraws what the ridership has put into the fare box, the you're asking riders of the subways and buses to pay for the failure of the City to

properly estimate their own budget to begin with," Silver said. Earlier this year, the Mayor slashed $24 million from the TA's operating budget and $250 million from its capital program. MTA and Transit Authority comments to the press were not definitive on the effect the cuts would have on the

timing of a 1995 fare hike, but said that the announcement earlier this year which postponed the scheduled January increase to July was made on the basis of a growing TA surplus.