The MTA’s current five-year capital program, unfunded after 2011 and facing a $10-$13 billion funding gap, will live or die this fall, according to a report today by Crain’s Insider. The city’s daily newsletter reports today that Cuomo Administration will wait until the fall to attempt to usher through a political and economic compromise that will save the MTA’s ambitious capital improvement budget.
The brief report aptly sums up the state of things. “Transportation advocates are anxious but not panicked,” it says. “The Legislature rarely acts before it must, and the MTA’s capital plan is funded through 2011.” After 2011 remains a black hole of uncertainty, but Crain’s sources are cautiously optimistic with a few caveats. The report details:
Funding talks will coincide with contract negotiations with the MTA’s largest union, Transport Workers Union Local 100. That will add an extra wrinkle to discussions, perhaps creating a perception that the MTA is “getting squeezed from all sides to make ends meet,” said one transportation insider.
Binding arbitration could neutralize the contract’s politics. If Gov. Andrew Cuomo wrests concessions in a new contract with state workers, arbitrators might award the MTA a similar deal…
It remains unclear exactly how much the MTA will need to borrow, but insiders say bonding could require $750 million to $1 billion in new annual revenue starting next year. Fares have been raised for three consecutive years, and a fare hike is already scheduled for 2013, so another one in 2012 is unlikely. The Legislature will instead have to vote on new taxes or fees during a special session late in the year or early next year.
A few things: I’ve heard from a few people that the MTA’s borrowing capabilities are completely maxed out right now. Without an additional revenue source, it cannot bond out more money for the capital plan. Additionally, while Crain’s suggests binding arbitration for the MTA’s looming negotiations with the TWU, the last time the authority agreed to such a plan resulted in the 11 percent raises. The MTA is already under intense pressure not to go binding arbitration without wresting concessions from the TWU, and I’m surprised Crain’s would even suggest it.
The report notes that state Republicans may resist an effort to identify a revenue source for the MTA without an ironclad promise to fund the next state Department of Transportation capital plan as well. Such a compromise would likely lead to increased state spending, but by keeping these capital budgets funding, the state will guarantee jobs for the construction industry as well. For now, this looming political fight is on hold, but come the fall, the fight for funding will grow tense.