Home Capital Program 2015-2019 For $100 billion, the MTA’s next twenty years

For $100 billion, the MTA’s next twenty years

by Benjamin Kabak

It’s full-court press time for the MTA’s next capital campaign. The agency unveiled its initial twenty-year assessment nearly two months ago, and last week, MTA CEO and Chairman Tom Prendergast began to defend his upcoming $29 billion request. After Monday’s MTA Board committee meetings, we have a better sense of what the MTA wants, and over the next twenty years, the agency wants to spend in excess of $100 billion to keep everything running.

On its surface, $100 billion over twenty years is nearly inconceivable. This is $5 billion a year until I turn 50. This is $100 billion in capital funding. This is $100 billion with scant mentions of anything like future phases of the Second Ave. Subway, a rail connection for Staten Island or any other numerous subway expansion projects we dream up on these web pages. This is $100 billion.

But despite the humongous nature of the number, it’s not inconceivable that the MTA will spend this much, and they seem to have a plan. It’s not, as officials continue to note, a sexy plan. It involves a lot of behind-the-scenes work that will replace early 20th century technology in 100-year-old tunnels with mid-21st century technology that will allow Transit run more trains in crowded tunnels. It is, as MTA officials discussed during a board presentation on Monday, part of the natural cycle of components. Acquire or build comes first followed by operating and maintenance followed by renew and replace. Call it the subway circle of life, and it moves us all.

While the last few capital campaigns have been dominated by megaprojects — East Side Access, Fulton St., the 7 Line, the Second Ave. Subway and South Ferry — this expanded look forward at the next 20 years involves the ever-elusive state of good repair. The MTA, not assuming that the money will be there, has recognized the need to push toward that state of good repair while incorporating resiliency standards developed in the 11 months since Sandy hit to prepare the subway system for its next century.

The bulk of this work will include over $18 billion invested in the signal system, and the MTA has taken great pains to stress how large of an undertaking this project will be. Replacing signals require massive system shutdowns, and the way the MTA plans to stagger the work over the next few decades will make the recent FASTRACK treatment seem like minor annoyances. The end result will be greater capacity throughout the preexisting system, and that is likely to be the best way to meet increased subway demand.

As a benefit, the new signals will also lead to a robust countdown clock system, and here, we see another picture emerge. The public will get shiny new toys. The countdown clocks are possible because the MTA needs to know where trains are for safety and security reasons. The latter, in this case, drives the former. We’ll also get a contactless fare payment system sooner rather than later, circulation improvements at some key midtown stations, and eventually some shiny new rolling stock.

So what’s missing? Keeping in mind that we haven’t seen the MTA’s big wishlist yet, it’s worth noting that megaprojects have disappeared. The MTA is not yet proposing Phase 2 of the Second Ave. Subway or any other rail expansion plans within the five boroughs. I expect to see funding for Penn Station Access arrive in the next set of documents to be released later this fall, but I’m bearish on the immediate future of the rest of the Second Ave. Subway. Prendergast wants it to be finished within the next 20 years; he said as much at the Crain’s New York Business breakfast last week. But so far, we’ve heard a lot about signals and not too much about system expansion.

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Patrick @ The LIRR Today September 17, 2013 - 12:44 am

In a way it’s best to keep what we currently have up and running before we go ahead and tack on many more subway expansions. The brand new Second Avenue subway isn’t going to look all that good if the rest of the system is completely falling apart.

Then MTA’s going to be facing an uphill battle in the next two decades trying to hold the system together. I’d imagine it will be much harder then it seems!

Austin September 17, 2013 - 1:02 am

More to do than can ever be done, if you will.

Phantom September 17, 2013 - 1:06 am

Will anyone alive today catch the Second Avenue subway in lower Manhattan?

Sunny September 17, 2013 - 1:21 am

Maybe today’s elementary school children as they near retirement…

alen September 17, 2013 - 10:13 am

is it really that big of a deal? upgrading the signals and having the ability to run more trains will improve service on the over crowded lines. maybe to the point that there won’t be any more political support to spend money to expand the SAS

Bolwerk September 17, 2013 - 10:30 am

Unless you found a way to repeal the laws of physics, no. There is an upper limit to how many trains can possibly be run in an hour on a given stretch of track under the best of circumstances. For that and geographical reasons (e.g., massive population density on the east side), expansion will always be necessary sometimes.

Howard September 19, 2013 - 6:15 pm

They should at least extend the Q to 125th street.

I know several people that dislike the narrower 6 train rolling stock.

Also, the lady and old man announcements are annoying.

Bolwerk September 17, 2013 - 11:39 am

If memory serves, the plans from 1984 to 2004 totaled somewhere about $70-80 billion, not adjusted for inflation or any of that heady number stuff true men of action ignore.

So, okay, $100,000,000,000 paid out in $5,000,000,000 increments. To make this easy, let’s assume inflation stays at 2% per year for the next 20-year period, which is probably insanely unlikely but a generous concession to the people who worry this is a ridiculous sum of money to the lazy transit-riding welfare queens.

How much is that total of $100B today? About $81,757,166,722.99. Apologies that I couldn’t find concrete information about the 1984 to 2004 period readily, but it doesn’t really sound out of line with what what spent during that time period.

Bolwerk September 17, 2013 - 11:41 am

Oops, that was supposed to be an independent comment, not a response to alen. But I guess it fits here too.

BruceNY September 17, 2013 - 5:27 pm

The capital plans from the 80’s & 90’s were about bringing the long-neglected and dilapidated system back from near total collapse. Since then, the system was supposedly maintained better. One would think we would see some savings benefit from those investments going forward.

Bolwerk September 17, 2013 - 7:49 pm

Yeah, fair enough, and we probably are, but there is still plenty of “good state of repair” work to be done. Signal upgrades and replacing the fairly large amount of 20th century rolling stock comes to mind in the next 20 years. There are also mandatory items like several ADA compliant stations, many of which need to be done during this decade.

And normal replacement from 1980s starts coming due before the 2020s, I reckon.

Spendmore Wastemore September 17, 2013 - 1:21 am

Just running the express trains at 65mph like they were built to* instead of 30 would increase capacity. Run around a loop twice as fast and you carry twice as many pax per hour with the same capital equipment.
*87 3/4 if ya wanna be picky, then they ran out of test track.

That, of course, would mean less misery for the suckas, fewer managers due to fewer trains and tracks needed and more management liability for the next triple play drunk/druggie T/O, so it won’t happen. The triple being the T/O is bent, the conductor doesn’t snitch and the supervisor who checked the T/O in sees nothing, says nothing, all according to the the code.
The fault is with the management and the union; the workers will follow the effective on the ground rules.

Chris C September 17, 2013 - 8:10 am

Just because trains have a top speed of 65 mph does not mean they can operate at that speed – especially when there are regular stops a short distance apart. As soon as a train reaches its top speed it has to slow down to be able to stop at the next station.

The Acela only reaches its top speed on 28 miles of track out of a total of 457miles between Washington and Boston i.e. 6%

Even if you just count the NYC to Boston run (231 miles) it is still only 12% of the route (the only real high speed part is in RI and MA). The reason for that is not down to the trains but the infrastructure.

The max speed a train is capable of is just one of many limiting factors. The track and signals and power systems all have to be capable of supporting higher speeds. Until they are capable of that then the trains would be going any faster.

Increased train capacity on some London Underground lines is not just down to marginally increasing the speed of the trains but in reducing the headway between trains by updating the signals and improving the track.

llqbtt September 17, 2013 - 8:58 am

There are grade crossings on Acela. Perhaps we need Monsieur Hollande to show us how to set up a few TGV style lines!

Kai B September 17, 2013 - 10:27 pm

It’s down to about five, and only between here and Boston.

Spendmore Wastemore September 17, 2013 - 1:42 pm

Of course. The locals cannot go any faster, personally I think having them coast for a train length, and begin braking at the start rather than the middle of the platform is worth the extra 10 seconds or whatever per stop. Less wear on the equipment, less jerking the pax, that’s a good trade for maybe 3 minutes per run. Ya can’t go when you’re stopping, that’s the price of closely spaced local stations.

The expresses tho have 1-3 miles between stops. Let’s say you divide that into 1/3 accelerate, 1/2 coast, 1/6th brake, that’s easily 50-75mph depending on distance. 125th to Columbus could be done in four minutes rather than 7-8. In other places, it’s two minutes here, a minute there. The B in Brooklyn could run a ton faster, it’s a ruler straight line.
Of course, that would require track, signal and power work, all of which could be rolled out over time as part of regular maintenance.

Bolwerk September 17, 2013 - 3:15 pm

10 seconds a stop worth it?

With 1500 working people on a train, that’s 15,000 seconds wasted, or 250 working minutes per train or ~4.17 hours of potential working time per train. IYBW, at the U.S. average of $63.27 PPP GDP per hour worked, you just blew about $263.63 worth of potential economically productive time.

pete September 17, 2013 - 4:31 pm

IND was built for 55 mph operation. It was downgraded with grade timers and other insane signals, and lower HP motors during the 1980s car rebuilds so now trains barely break 30 mph.

llqbtt September 17, 2013 - 8:53 am

Whew! I’m glad that I’m not the only one who’s noticed that trains have slowed down over time! The trains on the A & D Central Park run used to really get up speed. Same for the D between W 4 & 34. Now, my recent rides on that line have them going along at a rather pokey speed for such a long express run.

Nick Ober September 17, 2013 - 9:15 am

Have speeds in the system actually declined over the past few decades and if so what’s the root cause? Train dwell time due to crowding, track conditions, signaling or something else?

Tsuyoshi September 17, 2013 - 9:22 am

They’ve been slowed down for safety reasons.

Spendmore Wastemore September 17, 2013 - 1:47 pm

With all the train crashes, nobody survived through the 1930s, 40s or 60s. That’s why you never see anyone over 50 here.

tacony palmyra September 17, 2013 - 9:56 am

Yes. If you look at early schedules from when the subways first opened, the headways and travel times were better than they are now. They were running shorter trains more quickly and more frequently.

Travel by private auto is quicker and more reliable than it was 100 years ago. Travel by transit is not.

Phantom September 17, 2013 - 11:06 am

Yes. You realy notice it as the D or A crawls up to 125 St, when it once raced up there.

The ultimate ” safety measure ” is to have them run at five miles an hour, or better still not at all. Otherwise, someone could get hurt.

Bolwerk September 17, 2013 - 1:44 pm

Coincidentally, it also demands higher labor costs.

But anything for teh childrenz, amirite?

BoerumBum September 17, 2013 - 10:03 am

The big one that I notice is the speed (or lack thereof) of the downtown Lexington Express trains between Grand Central & Union Square. Usually 2-4 downtown local trains pass the express as it crawls between those two stations. Anyone know the root cause of that one? Are there major signal problems there?

Nick Ober September 17, 2013 - 10:12 am

I notice this all the time. More often than not in the morning the local and the express train on the Lexington Ave line will make the same time on the run between those stations even though the local has made stops at 3 stations on the way.

Nick Ober September 17, 2013 - 10:12 am

Head ways during midday seem a lot better on the express. I’ve always chalked it up to dwell time issues and the moving platform at Union Sq.

John-2 September 17, 2013 - 3:21 pm

Locals also have the moving platform at Union Square.

The pokey speed may be a 22-year-old legacy of the 1991 Union Square crash, just north of the station on the express tracks. It seems as if with the modern MTA, wherever there’s an accident, the result is the agency becomes extremely cautions in that area and the result is much slower speeds (see the after-effects of the Willie B crash for a similar example).

BruceNY September 17, 2013 - 5:28 pm

The Lexington express also grinds to a crawl around Spring Street though I remember it used to maintain speed in the early 90’s when I used to commute on it every day. The 7th Avenue express crawls from Franklin to Chambers, and uptown it slows down inexplicably at Christopher. And as mentioned above, the Central Park West express used to be a fun ride, but now is a dull crawl. Are all of these mysterious slow-downs simply a result of past safety infractions?

Joseph Steindam September 17, 2013 - 2:51 pm

There are few spots where even express trains would likely be able to get up to top speed. Those that come to mind include:
-Queens Blvd line from Queens Plaza to 74 St and to Forest Hills.
-8 Ave Line from 125 St to 59 St.
-7 Ave Line from 14 St to Chambers St and from 72 St to 42 St.
-Lexington Ave Line from 42 St to 14th St and to Brooklyn Bridge.
-4 Ave Line from Pacific to 36 St.
-Eastern Parkway Line from Atlantic Ave to Franklin Ave.
-Concourse Line from 145 St to Tremont Ave.
-White Plains Rd Line from 139 St to E 180 St.

These express runs are among the longest in the system, most of them pass three or more local stations and actually have large stop spacing. Notice that I omitted two whole lines that have express tracks in Manhattan: the 6 Ave line is omitted because there’s only one express run on the line, and its not that long, and the Broadway Line, which also has short express runs and the sole express line terminates in Manhattan.

The point of this thought experiment was to point out that speeding up express trains shouldn’t make much of a difference in the capacity of the line because there are so few opportunities to actually reach top speed. The time savings would be minuscule. Combined with the outdated signal systems that don’t know exactly where trains are, you could make the system more dangerous by running at top speeds, giving trains less time to stop in case of an emergency and increasing the likelihood that collisions would be deadlier. We have to live with the stop spacing we have, we’re not likely to shutter any stations much less express stations.

The signal improvements will at least allow Transit to know where trains are exactly and shrink the standard block spacing kept between trains. Reducing that spacing, when its known exactly where the trains are, will actually free up space to run more trains.

alen September 17, 2013 - 3:06 pm

most days after 8am the E and F train crawl under queens blvd. reason being is that roosevelt is packed full of people and it takes longer to board.

upgrading the signals would allow them to run more trains and improve the times for all the trains. all you really need is one or two more trains per hour during rush hour to make a difference

pete September 17, 2013 - 4:33 pm

No, its grade timers on Queens Blvd tracks.

llqbtt September 18, 2013 - 9:25 am

I’d like to add:


Newkirk to Kings Hwy
Kings Hwy to Sheepshead Bay

However ‘up to speed’ I believe connotes something different from the current ‘speed limited’ environment.

Howard September 17, 2013 - 1:42 am

Maybe the city can pitch in a few dollars for another phase for the second avenue system.

AG September 17, 2013 - 5:31 pm

that’s a big maybe… getting approval for rezoning is difficult enough right now… and it would take a lot of such to get the same type of scenario as happened with Hudson Yards.

Howard September 17, 2013 - 8:09 pm

So the midtown east rezoning is a big deal after all…

Anyway, would more entrances/widening platforms actually help 4/5/6 commuters? It seems like an excellent opportunity for funds but wasted on “improvements”.

JMB September 17, 2013 - 10:17 pm

One place I would love to see a platform widening is the Canal st station for N,Q….its kinda narrow as is, but worse is that its the only means of transfer between the different lines. Its generally packed with waiting passengers for the N/Q and more so with people transferring….wonder how hard it would be to push back the station walls an extra 8-10′.

Union Square and City Hall are also getting pretty ridiculously crowded but are both islands. Maybe the side platforms could be reopened and lengthened to deal with extra passengers? New train models have the conductor cab taking up both sides of the train car so opening doors could be easily done.

llqbtt September 18, 2013 - 9:26 am

Union Square on the Lex desperately needs wider platforms. The L there too could use a wider platform.

Larry Littlefield September 17, 2013 - 7:47 am

That’s $70 billion (in today’s dollars) for ongoing normal replacement. What you need just to keep what you have, and maybe have the replacements be a little improved due to changes in technology.

Assuming this is all borrowed, by the MTA or someone else, and interest rates rise to a more normal 5 percent, that is $3.5 billion per year in interest. In today’s money. Without the Second Avenue Subway, Metro North to Penn, New York paying for a new tunnel for New Jersey (which is what they want), anything like that.

That $3.5 billion is about half the operating budget proposed for New York City Transit.

Generation Greed will leave those that follow much poorer, and this city in ruins. And this time, unlike the 1970s, there may not be anywhere else in the U.S. to flee to.

Bolwerk September 17, 2013 - 10:39 am

Why would it all be borrowed? The state and city should kick in at least some of the costs for normal replacement. Also, it won’t be spent/borrowed at once. Whatever is spent/borrowed is going to be spent/borrowed in more modest disbursements over the next twenty years.

Larry Littlefield September 17, 2013 - 11:37 am

“Why would it all be borrowed?”

Every dime has been borrowed for some time. Last time around the state’s contribution was debt incurred by the state instead of directlty by the MTA. It later deducted the interest payments by the state from the MTA’s own “dedicated” taxes.

And of course the federal government is hardly in the black.

The city paid for the Flushing Line extension through bonds, but at least that was debt to pay for an actual extension that is associated with an actual increase of economic activity/popultion, instead of just keeping what we have.

Larry Littlefield September 17, 2013 - 11:38 am

It would be nice to have Phase II open for Fasttrack.

Nathanael September 17, 2013 - 12:03 pm

Tolling the cordon with the neighboring states, and raising taxes on the obscenely rich, would do the trick. But Generation Greed is still in power, and they won’t do it…

Larry Littlefield September 17, 2013 - 12:51 pm

The current candidate for Mayor promised to raise taxes on the obscenely rich not for transit but for schools.

And our overall state and local tax burden is already 50 percent higher than the U.S. average as a percentage of income. Due mostly to Generation Greed debts and pensions, including MTA debts already on the books.

The obscenely rich have four houses, and can arrange to spend little enough time in NYC to claim to reside elsewhere. They also claim their income is capital gains at the federal level, to pay less in tax. The pensions of retired public employees are exempt for NY state and local income taxes. The rich and the retired also don’t pay the federal payroll tax, and the MTA payroll tax.


Nathanael September 18, 2013 - 10:42 pm

“And our overall state and local tax burden is already 50 percent higher than the U.S. average as a percentage of income.
– See more at: http://bkabak.wpengine.com/201...../#comments

Not for the rich. Look at those top rates. They’re far lower than they were when I was a kid in the 70s and early 80s.

There has been a consistent trend of cutting taxes for the rich and raising taxes for the poor, at all levels of government, which has only occasionally been interrupted during my lifetime.

Spendmore Wastemore September 17, 2013 - 2:00 pm

Paying $100K for MTA work and $150+ for a cop on the beat may just have something to do with it.

That’s just the visible jobs. There was the NYCHA “community” position that paid six figures. Other places fill the same job with a volunteer. They also pay parents in school to chat with other parents and show them around.
It’s fun spending the other people’s paychecks.

Larry Littlefield September 17, 2013 - 2:19 pm

It’s the race to 100 percent of GDP. Health care, pensions, education, housing, transportation, every sector thinks they have a right to every dime there is.

When someone gets it, we’ll all stave to death.

Spendmore Wastemore September 17, 2013 - 4:11 pm

” every sector thinks they have a right to every dime there is.”

The less productive the sector, the more they demand.
Truly productive people don’t have time to work the system.

Bolwerk September 17, 2013 - 4:35 pm

And what is the most productive sector?

Larry Littlefield September 17, 2013 - 6:58 pm

Finance is most productive at working the system!

Bolwerk September 17, 2013 - 12:48 pm

Whatever shell games exist with finances, the state has the resources to pay the costs upfront. Presumably it was done that way because the state can borrow at a lower rate than the MTA.

Woody September 17, 2013 - 10:26 am

If they’re gonna be shutting down the Lexington line to install new signaling and stuff, sure would be nice to have Phase 2 of the SAS open by then.

Alargule September 17, 2013 - 10:39 am

…that will replace early 20th century technology in 100-year-old tunnels with mid-21st century technology…

Now I understand where all that money goes to. Early implementation of technology that will only get invented around 2050 comes at a price, of course…;)

PeakVT September 17, 2013 - 12:04 pm

This is $5 billion a year until I turn 50.

$5B is about 1% of NYC’s GDP. The country as a whole spent about 2% up until 2008. Europe spends about 5% on average, and China (which is a developing country) spends about 9%.

PeakVT September 18, 2013 - 12:19 am

No doubt, though that particular example is not a big ticket item on an annual basis (about 2.5% of what the MTA wants to spend). Plus NYC is heavily transit-dependent, so infrastructure spending should be higher there than in most of the rest of the country.

Alon Levy September 18, 2013 - 9:28 pm

Yeah, but being transit-dependent means not needing to spend as much on highways.

Water Tunnel 3 is just one example of a project, just like SAS. New York’s water infrastructure is a lot more than that.

Nathanael September 18, 2013 - 10:43 pm

That’s transportation of water, Alon. 🙂

Bolwerk September 19, 2013 - 12:07 am

Mass transportation for copepods.

Bolwerk September 17, 2013 - 12:19 pm

OK, a follow-up on my comment above that I accidentally placed in response to alen. Figuring average disbursements of $3.5B/year in the 20-year period from 1985 to 2004, looks like the inflation-adjusted total of all disbursements was in the $47,743,534,860.84 ballpark in 1985 dollars…or $103,603,470,648.03 in 2013 dollars.

I took the low number I mentioned above ($70B) as total nominal spending over those 20 years. Still depending on memory to make kinda wild assumptions, I admit, but if I’m about right about $70B this really doesn’t seem very out of line with prior experience.

The MTA doesn’t seem to have capital program numbers older than the 2005 plan on its site.

Larry Littlefield September 17, 2013 - 1:00 pm

For a litle more perspective, the average U.S. household spent $1,639 on new motor vehicles in 2012, according to the Consumer Expenditure Survey. There was an average of 1.9 vehicles, 1.3 earners, and 2.5 persons per household.

There are about 3 million households in NYC, so that would be the equivalent of about $5 billion spent on new motor vehicles at the U.S. rate. — the same as the proposed spending in the MTA capital plan. And as a net outlay, $1,516 on used cars, or the equivalent of $4.5 billion for everyone in New York City.

To the extent that NYers (and those in the suburbs) have fewer motor vehicles of their own, money not saved on motor vehicles would offset some of that MTA capital spending. Then again, transit is supposed to be cheaper.

That’s the sort of comparison that should be made. The question is, why should people in the year 2040, when Generation Greed is gone, be paying for the next five years of ongoing normal replacement? Why should younger generations be paying for the past 20 years of ongoing normal replacement.

David Brown September 17, 2013 - 3:10 pm

I will not be in New York in 20 years (as will many of us). But the biggest factor involved with Transit, will how much will the City grow and where will it occur? One place will be along the (M)Line. SPURA, NYU Expansion, Ridgewood, Bushwick, Long Island City and Sunnyside to name a few spots. To its credit, the MTA with the work on Queens Blvd, and extending the (M) to Delancey St on weekends is preparing for it.

Bolwerk September 17, 2013 - 3:20 pm

Taking your pension to Florida with you?

David Brown September 17, 2013 - 5:20 pm

Arizona is more to my liking (although it will be rare that I can see a Yankee, Steeler, Nittany Lion or Penguin Game in person).

Dan September 17, 2013 - 6:38 pm

I’m going to Arizona as well. Way less humid than Florida, and everything’s pretty cheap down there, including housing.

Bolwerk September 17, 2013 - 7:38 pm

You guys could gay marry here, and save more on your taxes there!

llqbtt September 18, 2013 - 9:32 am

Not only that, but they persecute Mexicans, and only grudgingly adopted Dr. King’s holiday!

And don’t forget to stock up on rifles at WalMart!

Nyland8 September 18, 2013 - 10:12 am

… and don’t forget this.

Bolwerk September 18, 2013 - 1:12 pm


Dan September 17, 2013 - 3:29 pm

Thankfully I’m not staying in NYC long enough to see how absurd the spending gets in a few years. Moving on down to Arizona, can’t wait to drive everywhere like a normal American. But seriously, the labor costs have skyrocketed through the roof lately. A prime example is the newer South Ferry station, which is costing more to rebuild than it did to build it from scratch just a few years ago. I know unions are supposed to be for the benefit of the worker, but they are really making things hard financially. Imagine if the MTA got rid of all the union workers and got non-union ones. They could still pay them good wages without all the union spending, and workers might actually be motivated to get stuff done instead of standing around knowing they’ll never get fired.

Phantom September 17, 2013 - 4:56 pm

We are now in the worst of all worlds. The construction workers and contractors have zero incentive to do anything on time and for a reasonable budget.

The goal is to work just hard enough so that you don’t get fired but to ” earn ” every possible dime through ” labor “

Larry Littlefield September 18, 2013 - 11:08 am

Spending on seniors is also low in AZ. It is what is most out of line in NY, if one includes Medicaid and public employee pensions.

Will you be coming back when the money runs out and Medicaid-financed nursing home or home health care is required, like the rest of them?

AG September 18, 2013 - 6:21 pm

yeah – a lot of ppl who retire to Florida and the Carolinas keep their NY doctors… well the ones who can afford to travel back and forth.

AG September 17, 2013 - 5:39 pm

Unfortunately – unless like other cities there are some new dedicated transit taxes or federal largesse – we won’t see as many “mega projects”. That said a lot of the things they are planning are important.

Alon Levy September 17, 2013 - 10:39 pm

Just as a quick calculation, $100 billion divided by the system length is $300 million per km, for a system that’s about 60% underground.

Put another way, it’s cheaper to build a system of NYCT’s length from scratch in almost every city than to do normal replacement and state of good repair works in New York.

(Well, normal replacement should be viewed as an operating cost anyway, but we can play this game if the state and the MTA treat it as a capital cost so that they don’t need to come up with steady funding.)

Bolwerk September 17, 2013 - 11:19 pm

Isn’t a lot of that also capital improvement (e.g., widening platforms)? Not to say the $100B is not overpriced, but the normal replacement part is probably not that overpriced.

Still, normal replacement is rightly regarded as capital expenditure, if following GAAP, because it creates a long-term asset. Oiling an engine is maintenance. Replacing an engine is capital. Likewise replacing long-term infrastructure, refurbishing a car, or replacing a signal system.

Larry Littlefield September 18, 2013 - 7:17 am

It’s an ongoing expense. If you treat it as a one time expense long enough, interest ends up covering 100 percent of the budget.

And don’t forget the $600 million per year in “reimbursable” operating expenses, paid for by the capital budget, and thus by borrowing. Those were operating expenses paid for by the operating budget until the early 1990s, when the city and state cut off general revenue support.

Bolwerk September 18, 2013 - 1:11 pm

The MTA has enough infrastructure/equipment that it should have an ongoing capital program. We wouldn’t want it replacing all its equipment at once every 10/20/40 years because that would be impractical.

There is nothing inherently evil about reimbursable operating expenses either, as far as I can tell. Part of the expense of refurbishing Smith-9th was terminating the G at Chruch.

It’s just that the future shouldn’t be paying for everything.

Alon Levy September 18, 2013 - 9:40 pm

For accounting purposes you’re right, but for budgeting purposes, a mature agency should have roughly equal capital maintenance expenditure and depreciation, and ongoing sources of funding to cover these as well as day-to-day operations.

Re actual improvements, what’s being proposed? I doubt it’s just widening platforms, since there aren’t many places in the system where platforms a) can be widened (i.e. aren’t island platforms) and b) may need to be widened (i.e. are crowded). The most crowded stations have island platforms, with only a handful of exceptions like the two 59th Street IRT stations and the Penn Station local tracks.

Bolwerk September 19, 2013 - 12:06 am

For budgeting purposes, I sorta agree, but the logic in separating them remains that long-term assets may be financed in a long-term capital budget, which may exploit long[er]-term financing strategies the operating budget cannot exploit. Still, the city and state screwed the pooch on deferred maintenance and the MTA is deprived of steady funding to cover even routine capital expenses. I’m not sure the MTA can be faulted for that.

Re improvements: I haven’t seen anything specific proposed (has anyone?), was just using widening as an example of improvement. Any ADA compliance, station refurbishment, Sandy-related bolstering are politically unavoidable capital improvements that don’t count as routine replacement. Any system expansion would count too.


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