Home Capital Program 2010-2014 The MTA Capital Program’s fall date with destiny

The MTA Capital Program’s fall date with destiny

by Benjamin Kabak

The MTA’s current five-year capital program, unfunded after 2011 and facing a $10-$13 billion funding gap, will live or die this fall, according to a report today by Crain’s Insider. The city’s daily newsletter reports today that Cuomo Administration will wait until the fall to attempt to usher through a political and economic compromise that will save the MTA’s ambitious capital improvement budget.

The brief report aptly sums up the state of things. “Transportation advocates are anxious but not panicked,” it says. “The Legislature rarely acts before it must, and the MTA’s capital plan is funded through 2011.” After 2011 remains a black hole of uncertainty, but Crain’s sources are cautiously optimistic with a few caveats. The report details:

Funding talks will coincide with contract negotiations with the MTA’s largest union, Transport Workers Union Local 100. That will add an extra wrinkle to discussions, perhaps creating a perception that the MTA is “getting squeezed from all sides to make ends meet,” said one transportation insider.

Binding arbitration could neutralize the contract’s politics. If Gov. Andrew Cuomo wrests concessions in a new contract with state workers, arbitrators might award the MTA a similar deal…

It remains unclear exactly how much the MTA will need to borrow, but insiders say bonding could require $750 million to $1 billion in new annual revenue starting next year. Fares have been raised for three consecutive years, and a fare hike is already scheduled for 2013, so another one in 2012 is unlikely. The Legislature will instead have to vote on new taxes or fees during a special session late in the year or early next year.

A few things: I’ve heard from a few people that the MTA’s borrowing capabilities are completely maxed out right now. Without an additional revenue source, it cannot bond out more money for the capital plan. Additionally, while Crain’s suggests binding arbitration for the MTA’s looming negotiations with the TWU, the last time the authority agreed to such a plan resulted in the 11 percent raises. The MTA is already under intense pressure not to go binding arbitration without wresting concessions from the TWU, and I’m surprised Crain’s would even suggest it.

The report notes that state Republicans may resist an effort to identify a revenue source for the MTA without an ironclad promise to fund the next state Department of Transportation capital plan as well. Such a compromise would likely lead to increased state spending, but by keeping these capital budgets funding, the state will guarantee jobs for the construction industry as well. For now, this looming political fight is on hold, but come the fall, the fight for funding will grow tense.

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Marc Shepherd May 12, 2011 - 3:43 pm

Actually, linking the MTA capital plan with the DOT capital plan makes some sense. The readers of this site (including me) are generally more transit focused, but most of the legislature’s Republicans come from districts that are more dependent on roads. I fully accept that Republicans won’t fund one without the other. That is part of the natural horse-trading that produces most legislation. But I wonder what kind of revenue increase the Republicans would agree to.

I agree that binding arbitration with the TWU would be fiscal suicide.

nycpat May 12, 2011 - 4:19 pm

They would go to arbitration IF and after Cuomo gets concessions from other state workers first. The last round of arbitration went the way it did because of the benchmarks set by contracts that Bloomberg gave other comparable civil service workers.
I think the TWU will work without a new contract for several years.

Justin May 13, 2011 - 2:36 pm

Since they want to get rid of the MTA payroll tax in the suburban counties, maybe as the fund the roads, perhaps they would agree to congestion pricing in terms of driving across free bridges from the Bronx, Queens, and Brooklyn.

If the MTA can’t issue more bonds without identifying new revenue sources, I think this would honestly help the most. It will be hard to pass, but I think it will eventually happen. Along those lines, the MTA will raise fares again (originally in 2013, but the state may decided to do this sooner). If you raise fares AND implement congestion pricing, you spread the pain along the entire populace, instead of sone aspect of it. I don’t think any other taxes used to subsidize the MTA are possible, given public opposition to new taxes.

Jerrold May 12, 2011 - 4:38 pm

Somewhat off-topic, but important enough to put here:

A friend from Brooklyn has informed me that signs are going up on the F line, stating that the current station-skipping situation will end on Monday, May 23.
Of course, let’s not forget that over next winter, they will be doing the same thing again in the other direction.

Benjamin Kabak May 12, 2011 - 4:39 pm

The plan was always late May to restore the skip stop service in Windsor Terrace. The Smith/9th St station isn’t opening up any time soon though.

Jerrold May 12, 2011 - 6:52 pm

Yes, maybe I should have included that fact in my post.
The Smith-9th St. station will be completely closed for a year.

Alex C May 12, 2011 - 8:53 pm

Just out of curiosity, how would the end of capital program projects affect the Culver Viaduct rehabilitation? Is that project funded entirely or would they actually have to stop where they are for fiscal 2012? I’m assuming this project is secure as far as funding.


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