Cuomo’s ‘support’ for MTA capital plan nothing but a house of cardsBy
When it comes to Gov. Andrew Cuomo and transportation funding, I’m not buying what he’s selling, and now, with details finally emerging three months after he announced a pledge to fund the MTA’s still-unapproved 2015-2019 capital plan, no one else is either. What started out as a promise to fund $8 or $10 billion of the plan via state sources has turned into a business-as-usual approach to the capital budget. Most of the state financing will come via debt, and it will fall on the shoulders of the riders through increases in debt service obligations that will eventually be a leading driver of future fare hikes. It’s not newfangled support from Gov. Cuomo and, coupled with his recent giveaway to New York drivers, it’s a far cry from the parity upstate politicians spent the fall whining about.
For weeks, as Cuomo conducted his infrastructure tour of New York State, pledging to see through lots of pretty projects without funding behind them, whispers of debt filled the air, and when he spoke at the Transit Museum on Friday, Cuomo even mentioned the dreaded d-word as the likely driver behind state contributions to the MTA’s capital plan. “Part of it is debt. Part of it is revenue,” he said to reporters, about state contributions to the MTA.
On Thursday, City & State reported that the state is essentially kicking the can down the road on funding. As Jon Lentz detailed, the state’s budget documents promise funding “only when the MTA’s capital resources have been spent down,” and budget-watchers don’t like this language.
“He’s not really going to add any money to the MTA,” Carol Kellermann, head of the Citizens Budget Commission, said. “Apparently it’s really just that the MTA is going to borrow the money, which doesn’t surprise me, because it’s what I thought all along. There was some conveyance of the idea that the state was going to contribute money to the MTA capital plan, which probably turns out not to be the case.”
The tireless Dana Rubinstein had more on Cuomo’s kinda, sorta rolling back his funding commitments:
Cuomo punts, according to Chuck Brecher, the co-director of research at the Citizens Budget Commission. “We were looking to the budget as being the time and the place where they would indicate how they’re going to pay for the commitment to do the $8-plus billion in the capital plan,” said Brecher. “The approach they’ve taken is to say they want to stall.”
The governor’s office had no immediate comment…Last year, the state appropriated $1 billion for the plan. So, now, the state owes $7.3 billion, according to Brecher. The state is only committing to hand over the rest of that money after the MTA has spent all of its contributions from the city and federal government. “What they’re saying is we promise to give you the rest of the $7.3 billion and we’ll give it to you as the last dollar in the capital plan, after you’ve used up all the money you’ve promised,” he said…
“The plan is to have a plan, and in the meanwhile, to keep having budget surpluses!” said Nicole Gelinas, a transportation expert with the Manhattan Institute, via email. “Practically speaking, it means the MTA will have to do its borrowing up front, and that when and if we have a fiscal crisis, the state will have to come up with a new emergency revenue, a la the 2009 payroll tax, to avoid draconian service cuts,” she added. “They are stretching a five-year capital program well beyond the six-year budget outlook, meaning, officially or unofficially, debt.”
In other words, once the MTA is no longer able to borrow a single dollar more, the state will step in. That’s a terrible plan and one that will surely lead to some combination of significantly higher fares or worse service. In fact, as Charles Komanoff wrote earlier this week, fares could increase by as much as 12 percent simply to fund new debt service obligations, and that figure is an additional 12 percent on top of the MTA’s regularly scheduled biennial fare hikes. Instead of some sort of equitable funding solution — such as Move New York’s fair tolling and traffic pricing plan — Gov. Cuomo has come up with nothing and is taking a lot of credit for it. It’s a veritable house of cards, and the wind is starting to blow.
Meanwhile, Cuomo has also pledged $22 billion to upstate roads, and a significant portion of that will be direct state contributions. When you consider as well that Cuomo is freezing New York’s already-low per-mileage Thruway tolls at current levels for the foreseeable future, the state’s current funding mix — including imposition of debt obligations on relevant agencies — heavily favors roads and drivers over rail lines and their passengers. Is this what Cuomo meant last week when he stressed the need to encourage transit use, especially in downstate areas? Color me discouraged.