Home MTA Politics Skelos and Co.: No, really, we care about MTA debt

Skelos and Co.: No, really, we care about MTA debt

by Benjamin Kabak

When MTA CEO and Chairman Joe Lhota fired off a letter to the New York Senate Republicans that questioned their commitment to transit within New York, we all knew the letter would not go unanswered, and last week, Dean Skelos and his entourage responded in turn. With a little bit of faux-concern, Skelos along with Senators Charles J. Fuschillo and Martin J. Golden claimed they denied the MTA capital funding because they truly honestly are deeply concerned with the MTA’s looming debt crisis.

The full letter is available here, and I’ll excerpt.

“Let us assure that the Senate understands the critical role the MTA plays in our State’s economy and supports capital investment in the MTA system…However, allowing a staggering $42 billion bonding debt level is of great concern, especially at the same time the MTA has many unresolved issues in its financial plan.

While we recognize the importance of advancing capital projects, we also recognize the importance of funding them in a fiscally responsible and prudent manner. The MTA’s 2012-15 financial plan contains several risks which could adversely impact its ability to fund the remainder of the 2010-2014 Capital Program. The MTA is currently projecting deficits of $141 million and $211 million in 2014 and 2015, respectively. These deficits include factoring in 7.5 percent fare and toll increases in both 2013 and 2015, increases which have yet to be approved by the MTA Board and have never been supported by the Senate Republican Conference.

The MTA’s financial plan also assumes that it will be able to reach a new labor contract which includes three years of no wage increases, unless there are offsetting productivity improvements. If the MTA is unable to achieve these assumed labor contract savings, it would add substantial costs to its operating budget.

Now, nothing these three illustrious Senators say is incorrect. The MTA’s financial plan does rest on some tenuous assumptions, and they are relying on a net-zero wage increase — something that will be achieved through negotiations or layoffs. But this letter doesn’t address Lhota’s main concerns. By playing fast and loose with the MTA’s capital funding, Skelos and the Senate GOP representatives are risking billions in federal financing and the timely completion of East Side Access, Phase 1 of the Second Ave. Subway and countless other capital program items that keep our subway system running.

It’s also disingenuous for anyone in Albany to now express concerns over the MTA’s debt levels. For decades, Albany has scaled back direct investment in the MTA as the authority has turned toward debt financing. Now that austerity is all the rage amongst Tea Party voters, Skelos has found responsible budgeting at the worst possible time, and he has decided to blame the victim by denying it money.

The MTA needs to do a better job of reining in costs. It must not be spending so much on construction and labor. But right now, it also has to finish up to mega-projects, and billions of dollars of money is on the line. This is a game of political chicken the MTA can ill afford to play.

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9 comments

Bolwerk March 19, 2012 - 4:16 pm

Never attribute to malice what can be attributed to stupidity. But, in this case, we seem to have a diarrhea of both issuing out of the NYS Senate.

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Nathanael March 26, 2012 - 12:55 am

The real problem is that the gutless sellout Andrew Cuomo agreed to the State Senate Republicans’ unconstitutional (really, it has too many seats) gerrymander to keep themselves in power.

They wouldn’t have lasted a single election if a judge had drawn the State Senate lines.

So you can blame every single thing Skelos and his evil band are doing on Andrew Cuomo.

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Al D March 19, 2012 - 4:52 pm

Just to drive your point home more directly. In the ‘1 WTC’ Pataki years, State funding of the MTA Capital Program was continually decreased. This decrease forced the MTA to borrow to ensure it’s program, widely credited with and recognized as ‘saving the system’ continue. This was not news. Back then they were warned that they were creating a future unsustainable debt burden for the MTA. Now suddenly Albany is worried about the debt mess that they in effect created and for this reason that they now won’t fund the capital program in effect forcing the MTA to create more debt.

What’s wrong with this picture?!?

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Terratalk March 19, 2012 - 5:39 pm

So what are the alternatives here … they seem to want to back the MTA into a corner but just what is in that corner … what would happen if the MTA declared bankruptcy? Actually when you think about it, it might just work … allowing the MTA to reorder and refinance its debt interest, give the union contracts over to a mediator to pare down, and open the MTA books which some have been asking for quite awhile … hmmmmmmm

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Think twice March 19, 2012 - 8:18 pm

And maybe hand over surface transit and subway construction to the NYSDOT and local DOTs where they belong.

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Larry Littlefield March 19, 2012 - 6:00 pm

Skelos: the debts I approved of for a couple of decades are OK, but any more is too much. After all, my generation is almost done with the transit system, so why invest?

Silver: no amount of debt is too much, since retirees don’t pay taxes on their pensions and don’t have to use mass transit.

Congress: we need cuts in Social Security and Medicare, but only for those 54 and under who will be collecting in the future, to pay back the debts we’ve run up so far and those we expect to keep running up.

Bloomberg: we could afford those teachers who were 55 when I wanted to run for President to retire then rather than at age 62, but we need future teachers to retire at 65 after paying far more out of their own paycheck.

Etc. Etc. Etc. Etc. I might go to see “Hunger Games” to see if any of the above is fictionally represented.

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Chris March 20, 2012 - 4:11 pm

State voting-eligible population (average age in mid-early 40s): yes, yes, yes, more of the same please.

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Nathanael March 26, 2012 - 12:57 am

The demographics are changing quickly. The Greediest Generation isn’t going to be able to get away with this crap forever. And when everyone younger catches up with them, we’ll be *angry*.

And they won’t like us when we’re angry.

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Links roundup « Public Authorities March 19, 2012 - 6:23 pm

[…] State Senate Republicans are truly and honestly concerned about the MTA’s debt problems. [2nd Ave. Sagas] […]

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