Before delving into the renovation, expansion and purchase plans buried in the MTA’s proposed 2010-2014 capital plan, we have to face the fiscal reality of the package. The MTA needs this $25.5 billion to maintain its system in a state of good repair but has just $15.6 billion at its disposal right now. Where the remaining $9.9 billion will come from is anyone’s guess.
In laying out the proposal for this capital plan, the MTA is very upfront with this budget gap. “Even with this $6 billion of new bonding capacity” — from the recent Albany rescue package — “a funding gap of $9.9 billion still remains to be filled to meet all the needs identified in the proposed MTA 2010-2014 Capital Program,” the report reads. “In the absence of additional support from the MTA’s funding partners, the MTA’s ability to maintain its network in good repair and address assets past due for replacement will be severely compromised.”
With this gap in mind, let’s see how the MTA plans to fund the remaining $15.6 billion investment. Some of the assumptions found in the proposed capital plan may lead to a wider-than-expected gap:
Federal Formula Funds: The MTA expects $8.175 billion from the Federal Transportation Funding Reauthorization Act. This bill will hit Congress late in the year, and the authority is “seeking significant increases in federal transit subsidies consistent with the Federal Transit Administration’s recognition of the substantial backlog in investments needed for state-of-good repairs across the country.” The authority is assuming they can receive “a 25% increase in base funding levels.” I am optimistic that the Feds will deliver.
Federal Security Funding: The MTA is planning for $225 million in grants from the Department of Homeland Security. This figure is consistent with current funding levels with a bump by a few million so that the MTA can expand its security programs. I see no potential roadblocks here either.
City of New York Capital Funds: Here, the MTA expects the city to up its contributions from $80 million a year to $100 million a year. Considering Mayor Bloomberg’s recently calls for an MTA overhaul, $500 out of a $25 billion investment program seems to be a token gesture. Perhaps the agency should put more pressure on the city to deliver money to the capital program.
MTA Bus Funding – Federal and City Match: The MTA will receive $160 million over five years through this program. Per the report, “With the MTA takeover of the City private bus lines in 2004, federal funds previously allocated to the City for these properties are now transferred annually to the MTA. As part of the transfer, New York City has agreed to provide the match for the required grant funding.”
MTA Bonds: Again, per the report, “During its 2009 session, the New York State legislature approved new revenue sources adequate to support debt service on $6 billion of new bonds.”
Asset Sales/Pay-As-You-Go Capital/or Other Internal Sources: This $600-million chunk will come from, as you might guess, asset or property sales or other sources. It will “provide support” for 2010 and 2011 only.
Generally, these funding sources are secure. The MTA should be able to wrestle the 25 percent increases out of the Federal Government and the City of New York. But that still leaves the capital program short by nearly 40 percent.
Starting now, the MTA is going to have to do a lot of begging, and that’s just one of the reasons why the State Senate needs to approve Jay Walder as the new agency head. The MTA cannot afford to be in the grips of an interim director at a time when it has to secure $10 billion in funding for a key capital campaign. The money has to be there; the leadership has to be there; the investment has to be there. As always, New York City depends up on it.