MTA OKs Budget to Expand Rail and Avoid Fare Increase

The Metropolitan Transportation Authority passed a budget Thursday that will expand rail service while cutting the agency’s overall costs, without raising fares.

The $2.6-billion budget, about 5% smaller than last year’s, represents efforts made by new MTA Chief Executive Roger Snoble to rein in spending and make the agency more responsive to transit riders.

The first budget introduced by Snoble, who arrived from Dallas seven months ago, bets heavily on the agency saving tens of millions of dollars by slashing workers’ compensation costs and creating a decentralized, streamlined bus service. The outcome of those initiatives is unclear. Nevertheless, the prevailing mood at the agency’s board meeting, where the panel voted 11 to 0 for the budget proposal, was highly optimistic.

“We are on our way to creating an agency that takes its customers seriously, and our budget reflects that,” Snoble said in an interview before the vote.

In the fiscal year beginning July 1, the budget proposes to:

* Increase rail service about 5%, to 573,000 hours of operation. About 20% of the budget is spent on rail.

* Spend about $136 million next year on construction or engineering of key construction projects such as a light-rail line serving the Eastside.

* Keep fares steady, with the standard one-way trip costing $1.35. This is significant, because there had been recent talk within the agency of increasing fares for the first time since 1995.

* Essentially maintain the same overall level of bus service, slightly increasing total hours of operation to 74.5 million. The agency is spending nearly half of its budget on buses.

The only opposition to the budget at Thursday’s meeting came from the American Federation of State, County and Municipal Employees, representing supervisors at the agency. Members said the agency was unfairly cutting costs on the backs of workers.

Proposal Pleases Board Members

Board members were pleased with the budget, however.

“I’m getting more and more encouraged by what I’m seeing,” said MTA board member and Los Angeles City Councilman Hal Bernson. “There’s a lot of innovation.”

Along with the innovation comes risk.

One assumption of the budget, which projects spending over five years, is that such items as labor costs will be reduced as the agency splits its bus service into five separate sectors and mandates that general managers in those areas cut waste. Snoble’s budget is hazy, however, on the financial savings to come from the sector plan, and some on the MTA board worry that the sectors could add to bureaucracy and end up boosting costs.

The budget also relies on significant success in the agency’s new effort to fight workers’ compensation fraud, a program that Snoble hopes will lead to about a 14% reduction from the $58 million spent on workers’ comp last year.

The MTA is in the envious position for a governmental agency of having more than half its budget guaranteed by a combination of sales tax and revenue from riders. But the agency relies on state and federal money to help fund its hoped-for construction of rail lines and dedicated busways. For those projects, the new budget forecasts receiving nearly $1.4 billion over the next five years from state and federal sources, all money contingent upon promises made but not yet finalized by politicians in control of the purse strings.

MTA officials acknowledge that there are no guarantees.

“It’s a big concern for us,” said MTA spokesman Marc Littman. “We definitely are reliant on those funds to end up doing the kinds of things we want to do.”