Home Capital Program 2015-2019 Mayor, Governor agree on funding plan to cover MTA capital budget gap but many questions remain

Mayor, Governor agree on funding plan to cover MTA capital budget gap but many questions remain

by Benjamin Kabak

In a rare moment of political collaboration that ends months of unnecessary bickering, Gov. Andrew Cuomo and Mayor Bill de Blasio have agreed on a funding scheme that will close the MTA’s capital budget gap, the Governor’s office announced this afternoon. As part of the agreement, the city will contribute $2.5 billion to the 2015-2019 plan, and the MTA will trim $700 million from the spending plan through either “further efficiencies or necessary program reductions.” Although numerous questions remain regarding this deal, the MTA will likely not have to slow down or suspend work on ongoing capital work, and the summer (and early autumn) of endless finger-pointing can draw to a close.

“Our transit system is the backbone of New York City’s, and our entire region’s, economy,” the mayor said in a statement. “That is why we’re making an historic investment – the City’s largest ever general capital contribution – while ensuring that NYC dollars stay in NYC transit, and giving NYC riders and taxpayers a stronger voice. I look forward to continuing to partner with the Governor and the MTA to ensure a transit system that reliably, effectively, and safely serves all of its riders.”

As announced by Cuomo, the deal includes the $8.3 billion from the state to which the governor agreed in July, the $2.5 billion from the city and numerous conditions that may or may not have teeth. According to the press release, the city money includes $1.9 billion from “direct City sources” and $600 million from “alternative non tax levy revenue sources” (such as those funding the Grand Central upgrades). The entire agreement is also dependent upon a series of conditions though if one party breaks a condition, it’s highly unlikely that the plan will fall apart. The conditions are as follows:

  1. The City and State will fund on the same schedule on a proportionate basis.
  2. Projects in the City which are funded by the $2.5 billion committed by the City (including projects funded through non tax levy sources agreed to with the MTA) will be planned by the MTA Board in collaboration with the City representatives on the MTA Board, with priority consideration given for projects and timing based on input from the City.? Likewise suburban projects which are funded by the suburbs will be planned by the MTA Board in collaboration with suburban representatives on the MTA Board and with priority consideration given for projects and timing based on input from the those suburban communities.
  3. The State will not divert any funds or fail to provide any funding committed to this Capital Program or due and owing to the MTA for any other expenses unless in accordance with the provisions of Executive Law 182 passed in 2011. Likewise, the City will not divert any funds or fail to provide any funding committed to this Capital Program or due and owing to the MTA for any other expenses.

Let’s start with the lockbox: This prong of the agreement is entirely pointless. Generally, Cuomo has gone after MTA operations money and not MTA capital money. Additionally, this is an agreement to adhere to a law that has no teeth. Cuomo has in fact raided MTA money since signing the lockbox bill, and nothing in this agreement will prevent him from doing the same. Whether that’s a risk the MTA will take in exchange for a guarantee of over $8 billion is a question to consider.

Meanwhile, the other conditions are words on paper, and it seems as though de Blasio got outmaneuvered at a time when he could have put his foot down on MTA doings. It’s unlikely that city officials will force changes to the MTA’s capital plan as many of the big-ticket items, including Phase 2 of the Second Ave. Subway, are already subway-related. So what did de Blasio get, other than a $2.5 billion bill and months of media boxing with someone who seemingly outfoxed him?

Still, there’s a palatable sense of relief over the fact that this is, for now, over. Yes, the city and state legislatures still need to approve funding sources (as the Citizens Budget Commission reminded us in a statement released via Facebook photo), but that’s a fait accompli at this point. We’ll have to see if the repeated statements that there is “no appetite” in Albany for a congestion pricing plan hold up, but one way or another, the spending will get approved, and the MTA can move forward without on pause on work that must be completed. As Gene Russianoff said in the Straphangers’ statement praising the deal, “Hallelujah!”

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brianvan (@brianvan) October 10, 2015 - 6:06 pm

The big questions are:

Just how will things play out with Cuomo and his weak lockbox? (related: will the legislature put up another strong lockbox bill? Will it matter that Cuomo likes to take from operations money but not capital contributions?)

What will the state’s “contribution” look like? (and will it hamstring the MTA for decades in new debt costs?)

As for the city – de Blasio is not doing anyone in NYC a disservice by contributing as much as he has committed, and the city should not strain to find the $500m a year that this commitment requires. It’ll be easy to forget the last X months of bickering if the capital plan is funded and carried out as planned, and now the ball is in the governor’s court to do the difficult work of lining up NY State’s obligations. At the very least, the governor should not be able to credibly pull the mayor back into a funding debacle until around 2019.

Nathanael October 11, 2015 - 11:23 am

I think the political winds are against raids on transit, *finally*. Given that the legislature passed the strong lockbox bill in 2013 through *both houses* with *large majorities*, Cuomo may have figured out that he’s not in a good position to conduct future raids; even the upstaters oppose the raids on the subway.

Cuomo will therefore try to pull some other scam, like making the state’s entire contribution in the form of debt payable by the MTA.

lop October 10, 2015 - 6:20 pm

Did the MTA stick with the 6.7 billion in new bonds they were planning to issue a a year ago?

Rob October 10, 2015 - 7:55 pm

What do the counties (other than the NYC ones) contribute to the MTA’s projects? For that matter, what do the counties contribute on transportation projects run by other authorities, like NY Thruway and the TZ Bridge?

adirondacker12800 October 10, 2015 - 9:29 pm

The Thruway is supported by tolls.

Duke October 10, 2015 - 10:27 pm

The Thruway actually even runs at a slight profit, with some money diverted to the operations and maintenance of the New York State Canal system (Erie Canal, etc.). The “New NY Bridge”, however, is being built with loan money that the state has yet to determine how it is going to pay back. It is likely that once the new bridge is open to traffic it will see its tolls rise to be similar to those at Port Authority crossings in order to accomplish that.

As for what suburban counties contribute, they don’t in the way the city does but their relationship to the MTA is different. Westchester and Suffolk counties run their own buses without MTA money and now so does Nassau.

Larry Littlefield October 11, 2015 - 12:25 pm

They get state money of for those buses, with tax money raised in part in NYC, but other than that the statements are correct. The NYC bus system requires the most subsidies in absolute dollars. But relative to the money to in, the biggest train is the LIRR. (or perhaps second behind the PATH).

eo October 12, 2015 - 10:03 am

On paper it might run a profit, but it is a mess — they are underinvesting in maintenance and expansion where it is needed (third lane Harriman-Newburgh — that segment seems to be a parking lot on Sundays). Sooner or later these projects will pile up and the tolls will have to go up to pay for it. Enjoy the combination of low tolls and low gas prices while you can.

adirondacker12800 October 12, 2015 - 1:57 pm

You don’t build extra lanes because traffic is bad a few weekends of the year.

Larry Littlefield October 11, 2015 - 12:23 pm

Can someone now talk about either ending the graft, corruption and featherbedding on the LIRR or an end to imposing fare increases and service cuts on poorer NYC residents to pay for it?

That’s on Cuomo now, and on DeBlasio for not bringing it up. Far from preventing a strike, the people should have gotten a strike against the LIRR.

And don’t forget, it isn’t the unions. It’s the unions AND management. And that disability fraud culture was going on while Perdergast was head of the LIRR.

smartone October 11, 2015 - 2:21 pm

Seems like de Blasio got nothing
he wants the money the city gives earmarked to the city
it ‘s a big pot of money and the city was getting some of it anyway..

What he SHOULD have done is get the city money earmarked for an explicit expansion project
like utica avenue line and/or phase 2 of second avenue subway..

then you know the city would get something for it’s money instead of going into the black hole of MTA

Chris C October 11, 2015 - 4:24 pm

From my reading of the plan there are enough projects within the city limits – station upgrades for example – that could easily have a ‘funded by the City / opened by The Mayor’ plaque on the wall

Justin Samuels October 11, 2015 - 6:11 pm

There is no engineering study for the Utica Avenue subway. Meanwhile the second avenue subway phase 2 is much further ahead on the planning stage and with the capital budget funded it will happen.

tacony October 12, 2015 - 12:49 pm

Likewise suburban projects which are funded by the suburbs will be planned by the MTA Board…

Why on earth is this written here? Suburban projects funded by the suburbs? What? Which projects are these?

Dan October 12, 2015 - 5:43 pm

This would presumably refer to LIRR and Metro-North matters (excluding those within NYC or Connecticut).


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