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For more than a year, local transit officials have warned that New York State’s reluctance to adequately fund Metro Bus and Rail could result in drastic cuts in service.

Now the federal government is reinforcing Niagara Frontier Transportation Authority fears of serious financial troubles ahead, even while state officials offer little hope that new dollars will soon flow to the area.

In a new report issued by the Federal Transit Administration, Washington makes it clear that New York must substantially bolster the dollars it sends to run buses and trains in Erie and Niagara counties or face an unsustainable situation. The NFTA’s $40 million project to rebuild its 27-car rail fleet also is imperiled by the shortfall, the report says.

“NFTA does not have the financial capacity to sustain existing services, is unlikely to meet its state of good repair needs over the next five years, and lacks the financial capacity to complete the light rail vehicle project as currently scheduled,” federal transit officials said.

NFTA Executive Director Kimberley A. Minkel says the budget her staff will present to the board of commissioners today will seek a 5 percent increase in the state’s Surface Transit Operating Assistance program, and renewed her plea for Albany to recognize the special needs of upstate New York’s largest and most comprehensive transit system.

“It really validates everything we’ve been saying for a while,” Minkel said, pointing to zero increases in state aid over the past six years. “The challenge is that when the subsidy goes down, we can’t maintain the same level of service.”

The potential for layoffs or cutbacks within the authority has been exhausted, she emphasized, pointing out that Washington commends the NFTA for its management.

“The NFTA has managed its operations effectively and efficiently but has been hampered by zero growth in the revenue sources used to provide operating assistance,” the federal report said.

Now Minkel wonders how cuts could balance the budget without catastrophic reductions in service.

“If you look at what FTA says, we’re doing a good job and managing our operations effectively and efficiently,” she said. “If there is low-hanging fruit, I don’t know where it is.”

NFTA officials say the state fails to recognize that the local transit agency also operates a subway in addition to upstate’s largest bus fleet. Rochester, Syracuse and Albany, they say, only run buses.

Minkel said about $45 million in state transit operating assistance is calculated on passenger numbers and another measurement called “revenue miles.” And she argues Metro Bus and Rail are faring worse than any other upstate transit agency, despite the NFTA’s significantly larger operation.

While the Buffalo/Niagara Falls transit system last year received $1.56 in state aid per trip and $3.34 per revenue mile, those figures fall far below the smaller upstate systems. Rochester for example, receives $1.77 in state aid per trip and $4.50 per revenue mile. Albany gets $2.11 and $3.51, respectively, while Syracuse receives $2.20 and $5.76.

“An important distinction between us and the other upstate transit agencies is our light rail system ... and the seven to eight million passengers it carries each year,” she said. “I think that somehow is getting lost.”

The federal report, meanwhile, noted that state operating assistance remained essentially the same in 2012 as in 2007, while federal funds used primarily for preventive maintenance grew only 1.3 percent in the same period.

State Division of Budget officials say they believe the NFTA is treated as fairly as other upstate transit agencies and that efforts should be made to reduce expenses. They point to the one-eighth of 1 percent sales tax revenue dedicated to transit in Erie County, as well as proceeds from a mortgage recording tax and petroleum business tax – even if they have not proven to be “robust” sources of revenue in recent years.

“Even in these difficult financial times, this administration took extraordinary steps to keep NFTA’s state funding whole,” said Morris Peters, spokesman for the Division of Budget.

Still, two local assemblymen say they will champion the NFTA’s case in Albany as the executive branch begins to craft a new budget. Assemblyman Robin L. Schimminger, D-Kenmore, said he wants the focus for the problem put on the administration, especially since Howard A. Zemsky – whom Schimminger referred to as “the governor’s best buddy” – heads the NFTA.

“We will make the pitch,” Schimminger said, promising a united delegation in the effort.

Even Assemblyman Sean M. Ryan, D-Buffalo, a frequent NFTA critic, said he also would support the authority’s effort for more funding.

“They make a persuasive case,” he said, nevertheless pointing to the uphill challenge in Albany and a host of problems he sees in local funding – including continued tax breaks granted by industrial development agencies that shortchange the NFTA and his contention that Niagara County fails to contribute its fair share to the system.

“I would support an increase,” Ryan said. “For the first time in a long time, the NFTA has leadership with vision.”

Minkel pointed out that downstate’s giant Metropolitan Transportation Authority remains insulated from stagnant funding because of reliable taxes and revenue streams that pertain only to New York City and its suburbs. The MTA relies on commuter taxes to fund the nation’s largest transit system, she said, while upstate authorities gain their revenue from taxes on petroleum and telephone lines. The irony, Minkel said, is that when fuel prices rise, people buy less fuel, and the petroleum tax revenue declines.

While the authority has been able to “cobble together” various funding sources to continue rebuilding its rail fleet, she said it remains hampered by the state’s slow pace of releasing capital dollars to fund the program. Minkel said the NFTA continues to urge the state to make available those funds as it did this year, but was forced to secure a $12 million line of credit to ensure the rebuild program in case the state rejects requests for the capital funds.

Minkel also noted that state operating assistance that fails to grow and keep pace with current needs will not help the authority’s new effort to expand service to Amherst with an extension of Metro Rail or enhanced bus service. Federal authorities will require a reliable source, she said.

email: rmccarthy@buffnews.com