During the build-up to the fare hike, a common refrain emerged from the mouths of New York’s elected legislatures. “Ask us for money, and we’ll give it to you,” these representatives said to MTA CEO and Executive Director Elliot Sander over and over again. They practically begged for the chance to dole out funds to the financially-strapped transportation agency.
Now, based on a newly-released Comptroller’s report, the legislature will have a chance to make good on their promise to the tune of at least $9 billion over the next five years. Whether or not they can deliver the funds will impact the MTA and the region for years to come.
In his report (available here as a PDF, New York State Comptroller Thomas P. DiNapoli crunches the numbers in the MTA’s proposed capital plan for 2008-2013(PDF) and determines that the MTA needs at least $9.3 billion more to fully fund the plan. That number could climb to $13.8 billion if congestion pricing fails.
DiNapoli’s report paints something of a bleak picture regarding the MTA’s financial future. Under the current iteration of the next five-year capital campaign, the agency will be saddled with rising debt service costs that could end up crippling the agency. New York City cannot afford a repeat of the 1970s when it comes to its public transportation network.
“The MTA is absolutely vital to the region’s economy,” DiNapoli said. “The system must be kept in good repair and crucial expansion projects must be completed as planned and on time. But the MTA can’t close the funding gap without the help of the State and the City. And the MTA should not rely too heavily on debt. Debt service is already placing increasing pressure on the MTA’s operating budget.”
According to DiNapoli’s report — which I’ll be examining further next week — the MTA has proposed a capital plan that, annually, is 36.6 percent larger than the current five-year program. But the plan is not without a trade off. As DiNapoli writes, “every $1 billion in MTA capital spending generates 8700 jobs, $454 million in total wages, and $1.5 billion in economic activity in the metropolitan region.” Might MTA construction actually pay for itself? Shouldn’t the MTA deserve some more state money based upon these figures? It seems so.
In the end, though, for DiNapoli, it all boils down to debt payments. Once the MTA covers the portion of the plan that they can through potential federal contributions due to congestion pricing, farebox revenue and bond issues, they will be left with large debt service payments that could cripple the agency in ten or fifteen years. “Debt service on bonds issued in support of approved capital programs will peak at $2.1 billion annually beginning in 2013 — 38 percent higher than the current level — and will reach $2.5 billion by 2017 based on the proposed capital program,” he wrote. “Debt service will place increasing pressure on the MTA’s operating budget and will consume 43 percent of fare and toll revenue by 2017, compared with 28 percent today.”
So here then is the chance for the legislature to step in. The MTA is at least $9.3 billion and will be facing burdensome debt service payments in the near future. After years of neglect, the state and city could rescue the MTA from a fiscal crisis. It’s time to make good on those pleas we’ve been hearing for the last few months. Give the MTA the money.
2 comments
I’m a little upset that someone had to put numbers to what we already know is true… then again, business is numbers so…
Anyway, the decision might be obvious but I still doubt that representatives that represent other parts of the state will send money to a district that isn’t theirs.
I have read books and studied history of how trains, planes and roads transform towns into cities and wastelands into Las Vegas, but I never witnessed it personally. The L line and the communities it served literally transformed into the trendy money making places it is now (also thanks to good work by the police as well). I remember the L train was a train you TOTALLY avoided along with the neighborhoods it went through.
Now you have trains running every 4-6 minutes and most are PACKED all the way to Broadway Junction!!! J line PACKED. A line PACKED 12am in the morning…
We want to build a east side lux co-ops, on the west side we want parks, a new MSG and build over the LIRR 42 street yards. They want a new NETS stadium, co-ops, hotels and brand new businesses at ATLANTIC AVE. We want a new CONEY ISLAND, we want a new Gateway Park in brooklyn, we want Averne By The Sea in the Rockaways. We want our Ivy League schools to take more land and build. We want more housing for the 1 million + people who will be here in the next decade or so.
We (as in the state representatives) want to tax the workers, the housing developers, the businesses to the tune of billions of dollars a year… A YEAR… but it won’t happen because we can’t get the 10-12 BILLION over the course of a decade to fix and improve our subway system.
Second ave subway (with 3 tracks) should be a no brainer. 7 train extension with 2 stops to the west side? No problem. Fulton street hub… not to sure, but with the rents they would have collected from the businesses, it might have been nice.
Bottom line, this is an emergency need. This is not a “well, I wish we could but…”. These projects basically will decide whether or not NYC will continue to grow or at the very least, keep things going strong. People are not going to keep wanting to pay 2,000 rent a month and get crap for it just to live in NYC. 750,000 homes with home owners paying 25-50,000 a year in taxes… you can get a 5 bedroom, 3 bath somewhere else with the same money and pay WAY less tax on the land a year.
We don’t just need a better subway, we demand a better subway. PERIOD.
Sorry for the rant, but this is ridiculous.
As Jane Jacobs explains, it’s not the capital improvements that make a city, but the city that makes capital improvements. The Erie Canal gave New York and Jersey City the same natural advantages, but only New York grew explosively subsequently. The St. Lawrence Seaway and the ensuing decline of the Erie Canal devastated Upstate New York, but Downstate New York emerged unscathed. The TVA was meant to transform the Upper South, but the region remained impoverished even after it had dammed every river and strip-mined every coal field. Calgary has existed as a railroad town for almost a century, but it only became of any significance once they discovered oil in the area.