Following a week of bad news for the MTA, the agency’s financial future grew a little dimmer yesterday as Moody’s, the bond-rating agency, warned of an impending rating downgrade. If Moody’s enacts this downgrade, the MTA would be slammed with higher interest rates and would find it harder to borrow money or issue new bonds.
The Times’ William Neuman had more:
The warning applied to about $12 billion in what are known as Transportation Revenue bonds. The bonds are backed by the fares paid by bus, subway and commuter rail riders, as well as other sources, including taxes on real estate transactions, which have declined with the worsening economy.
The report cited the authority’s deepening financial crisis and the failure of the State Legislature to enact a rescue plan backed by Gov. David A. Paterson. In response to the lack of action in Albany, and to help close a $1.2 billion deficit, the authority’s board voted on Wednesday to move ahead with a steep increase in fares and tolls and deep cuts to service.
“In the absence of a long-term funding solution from the State Legislature,” the report said, further fare increases and service cuts were probable. Even so, the report said, the authority faces growing budget deficits in coming years. It warned that “stopgap measures will not stabilize the long-term fiscal health of the M.T.A.”
As a result, the report said, the authority’s financial projections “may not support” the current rating for its fare-backed bonds.
As Neuman notes, Moody’s warning is a direct result of Albany inaction, and MTA officials were quick to point out the relation. “It is making the very direct connection between the failure of Albany to act and the financial viability of the MTA,” CFO Gary Dellaverson said.
I know I’m starting to sound like a broken record, but the point remains: Albany is not taking this MTA crisis seriously. Considering the very public and active statements of the MTA leaders, I’m not inclined to blame them for Albany inaction. Maybe it’s a nature of a legislative body with upstate representation attempting to legislate for New York. Maybe it’s a problem of out-of-touch politicians who don’t know their constituent needs. Maybe New York state really should split into two, as five State Senators recently suggested.
Whatever the cause, whatever the solution, as Albany delays, the MTA’s financial picture looks worse every day.
4 comments
I like the idea of splitting the state into two. Eliminating Albany is probably the only surefire way to give the control over the MTA to downstate, the actual and only region it serves. The New York Metropolitian area could also finally follow through with its agendas, and upstate can follow through with theirs.
> Maybe New York state really should split into two, as five State
> Senators recently suggested.
The dislike is mutual, I can assure them. I was raised up there, and I could not get out fast enough.
I never understood the inertia that kept upstate attached to the city. When I’ve shown non-Americans the map of the United States, they were always surprised that New York City was in the same state as “upstate” and not the surrounding territory which is now in Connecticut and New Jersey. If you look at the map, the two areas are connected by a very narrow corridor and much of “upstate” is pretty obviously in the Midwest.
Add to the fact that much of upstate’s identity is wrapped up in hating the city, and you may get the most dysfunctional state in the country.
agreed. i grew up only 75 miles north of the city and people up there hated the city so much. whats worse is that i would visit various friends in different regions throughout and it always amazed me how truly diverse this state is. Albany is far different than NYC; Buffalo is truly the mid-west. Far flung stretches of the southern tier are like appalachia than new yorker. its so easy to see why this so-called empire state has been dying a slow death for generations.
I and many others i know would fully support creating our own state. Pretty sure the idea has been floated a few times in the past century or so…think they were going to call it Gotham, but not too sure. My only concern is that if we left the state, we would be held ransom by means of our upstate water supply. The upstaters could easily turn it off on us or just charge exorbitant rates that would dry us out entirely.