Reading budget documents can be confusing. We've put together this glossary to help explain some frequently used but less common terms.
Accrual Basis: A form of accounting where revenues are recognized when they are earned, not received, and expenses are recognized when incurred, not paid out. In accrual accounting, cash does not need to change hands before the revenue or expense is recognized.
Additional Savings Actions: A below-the-line item included in the MTA's November Financial Plan 2019-2022. It captured additional reductions and re-estimates resulting in savings beyond the Agency baseline projections. These "one-shot" (non-recurring) savings are expected to be implemented in time for inclusion within Agency baselines in the 2019 July Financial Plan.
Baseline: The MTA uses "baseline" (or "above-the-line") to signify all financial plan budget requirements, e.g. revenue and expenses on an Agency and consolidated basis.
Below-the-line: Financial proposals and policy actions made by MTA Management are placed below-the-line (not in Agency baselines). They are then presented to the MTA Board for approval. Financial information that arrives late in the process may be placed below-the-line due to time-constraints. These items will typically be incorporated in the Agencies' baselines during the next plan cycle.
Capital and Other Reimbursements: Reimbursements from sources other than the operating revenue, e.g. fares and tolls. Typically, reimbursable expenses (e.g., capital projects and directed patrol by the MTA PD) are funded by either the capital program, grants, and/or other sources.
Carryover: Unused funds that are carried over to the following year.
Cash Basis: A form of accounting that recognizes receipts and expenditures at the time cash is received or paid out, unlike accrual accounting, which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred.
Consolidated: MTA-wide revenues and expenses, including agencies' baseline revenues and expenses and below-the-line adjustments, together with all MTA subsidy revenues and debt service expenses.
Debt service: The cash required to cover the repayment of interest and principal on debt.
Depreciation: An accounting method of allocating the cost of a tangible asset over its useful life.
Drawdown: Using funds in an account.
Environmental Remediation: Expenses related to the removal of pollution or contaminants from the environment. This can include soil, groundwater, sediment, or surface water. Contaminants are removed for the general protection of human health and the environment or from a brownfield site intended for redevelopment.
General Reserve: Funds, based on 1% of total expenses, that are identified in the budget to fund unanticipated expenses.
MTA Capital Budget: The part of the MTA budget related to expenses incurred to either buy or build a new asset or add value to an existing asset.
MTA Efficiencies-Not Yet Implemented: The MTA introduced savings initiatives and programs categorized as MTA Efficiencies in 2009 and 2010. These included administrative reductions, operational consolidations, strategic initiatives, paratransit savings, operating efficiencies, and improved MTA-wide business practices. With each Financial Plan since 2010, the MTA increased its savings targets. We continue to work towards these targets by identifying savings initiatives that generate funding for the capital program, safety, service, and operational needs. This also helps maintain the level of planned bi-annual fare and toll increases at 4%. Through 2018, the MTA accumulated annual savings and implemented programs approximating $2 billion.
MTA Operating Budget: Related to revenues received and expenses incurred during the course of regular business. This includes:
- farebox and toll revenues received,
- labor expenses for employees of the MTA,
- non-labor expenses to provide transportation services, etc.
Non-Labor Expenses: Expenses including electric power, fuel, insurance, claims, Paratransit service contracts, maintenance and other operating contracts, professional services contracts, materials and supplies, and other business expenses.
OPEB (Other Post-employment Benefits): Benefits, other than pensions, that U.S. state and local governments provide to their retired employees, such as health care benefits. The MTA budgets for current retiree expenses (OPEB Current Payment) and future retiree liabilities (GASB 75 OPEB Expense Adjustment).
Service Guideline Adjustments: Service guidelines are reviewed and approved by the MTA Board. We maintain an appropriate level of service based upon actual ridership on a route. This reduces occurrences when buses or trains are either overcrowded or underutilized.
Subsidy Impact of Fare and Toll Increases: The impact to MTA subsidies resulting from the fare and toll increase.
Yield: The amount generated on an investment or initiative over a particular period of time and expressed in terms of a percentage.