OK, OK. Maybe there’s no Jeffrey Lebowski to ask for money, but New York State Comptroller Thomas DiNapoli can’t seem to find around $12 billion for the MTA’s next capital plan. This is hardly a breaking piece of news for anyone who’s watched the recent politicking behind the MTA’s looming need to present a new five-year spending plan, but DiNapoli’s report drives home the fact that the MTA has to spend a lot of money it doesn’t have to keep our trains and buses running smoothly.
“Millions of New Yorkers rely on the MTA transit system and while it is in far better condition than it was 30 years ago, much more needs to be done,” DiNapoli said in a statement. “The MTA has to find a way to finance improvements without putting the financial burden on riders. This can be achieved only by working closely with the federal government, New York state and New York City to develop a long-term financing program and by using resources effectively and efficiently. Otherwise, needed repairs will be pushed even further into the future, and fares and tolls could rise even faster.”
DiNapoli’s main point isn’t necessarily that $12 billion is missing, but rather that $12 billion in funding will not materialize without sending the agency further into debt. In his short report, the New York State Comptroller analyzes the spending needs for the MTA and concludes, as we know, that the next capital plan isn’t a sexy one. Unless the MTA is aggressive in requesting funding for future phases of the Second Ave. Subway or work beyond the never-ending East Side Access plan, the capital program will fund much-needed signal and infrastructure upgrades and rolling stock purchases.
That’s not to say that these aren’t 100 percent necessary for the future healthy of New York City; they are. But when it comes to headlines, few New Yorkers are going to read about signal modernization and long delays caused by the work with any joy. This is stuff we never see even if our daily rides depend on it. Still, says DiNapoli, despite 30 years of investment, the system is not in a state of good repair and may never get there without considerably more investment.
As DiNapoli notes, this funding gap was a problem with the last five-year plan, and the MTA “solved” this problem by cutting expenditures and bonding out its obligations, thus adding more debt to the ledger. Debt service in 2018, notes the Comptroller, will be three times what it was in 2005. How long can this go on?
Ultimately, then, the issue isn’t that $12 billion is missing from the MTA’s capital budget. Rather, the issue is that the MTA will have to continue to go into debt to cover the funding gap. Can they add another round of debt to their finances without beginning to impact service? As debt counts against the operations budget, already riders pay for this debt as fares go up to cover operating obligations. DiNapoli doesn’t offer a stark picture for the future, but the meaning is there. Someone will pay for that $12 billion. Either the MTA doesn’t perform work or somehow it gets paid. Either way, without direct contributions from outside sources, riders alone will foot that bill.
8 comments
Did DiNapoli have nothing to say about the labor deals struck over the past few months? Putting the financial burden on riders is the governor’s and legislature’s job!
Don’t worry, the reinvention committee with invent something not already invented elsewhere to save us.
What you are talking about is the final outcome of the huge game of chicken over the years. What Generation Greed arranged is an “everybody wins” deal for itself. The question is, who loses?
1) The city and state cut off general revenue funding for the MTA capital fund in the deep early 1990s recession and fiscal crisis, and never restored much of it despite three subsequent booms. The money was used for other things, and is still being used for other things.
2) The riders got a huge cut in inflation-adjusted fares in the mid-1990s, thanks in part to advocacy by the Straphangers on behalf of past transit riders. The Straphangers didn’t care where it came from. When the answer came, it wasn’t to their liking.
3) The TWU benefitted from the big retroactive pension increase of 2000, though they didn’t get the additional deals that some other unions did (and haven’t screwed the newbie either). The LIRR continues to be plundered under the “buddy boy” system.
4) Contractors keep jacking up prices, in part to pay for the retroactive pension deals for the construction unions and past pension underfunding. The MTA estimates the cost of future jobs based on past costs, all the contractors see that, and they use that inflated cost estimate as the base for future bids. It keeps ramping up like executive pay.
To finance the “everybody wins” deal the future was sacrificed. Who loses when the future arrives? Thus far, only the riders have given up anything, with service cuts, a lack of service expansion relative to increases in ridership, and fare increases relative to inflation. And NYCT managers, who have had their pay cut relative to inflation.
Even the way this question is posed shows the winners will keep on winning. Why are we talking about a capital plan funding gap at all. Why aren’t we saying that the MTA has PLENTY OF MONEY to fund reasonable operating and capital costs, all the money it needs. Because that’s where the money will go first.
And THEN asking who will get stuck paying the debts, pensions and retiree health care from the past, with what OTHER revenues. How come Generation Greed gets to take all the money off the top, without it even being pointed out that’s where the money is going?
By the way, who voted for all the deals in the past that stole from the future that is now the present?
DiNapoli, and his fellow Generation Greed legislature.
And those values go way below the MTA, and way beyond New York State government. We’ll never understand the present or limit the damage to the future without an honest assessment of the past.
If it’s any consolation (it isn’t for me), newly hired workers at LIRR will be openly hostile to the LIRR unions. This is what the unions get for having *no solidarity* by agreeing to a “screw the newbies” contract. “Screw the newbie” provisions like these decimated union membership in shops across the country.
It isn’t any consolation for me either.
The unions point to these “screw the newbie” provisions and say “we” have made sacrifices. The politicians point to them and claim they have increased fairness and used innovative methods to solve problems.
To me, the screw the newbie, flee to Florida cycle just increases unfairness. The unions not only point to the lower compensation of the newbies as an excuse for the newbies to do a lousy job. They point to the lower compensation of the newbies as an excuse for everyone to do a lousy job.
Then you put it in the broader context of overall public policy and social trends, and you see it for what it is.
http://larrylittlefield.files......equity.doc
I think it is very easy to criticize decision makers when it’s not you on the line. Maybe your ideas are better Mate and Larry. Why not run for mayor and have city fund the mta? Or put yourselves in some other serious positions of power and implement this.stuff,? Keep in mind NY spends massive amounts of money on prisons, social services and Medicaid, education, gives out huge tax credits for.economic development, etc. Politicians.have to spend resources on things that are just as expensive as transit. And in a congress controlled by.republicans and, it’s not like NY can count on vast sums of money from the federal government.
sadly – you are correct… it’s just kicking the can down the road. “everyone wins” is fools gold.
The problem is that the MTA will have to keep accruing debt in order to close the financing shortfall. Can they take on more debt without having a negative impact on servicing? Riders already pay for this debt when rates increase to fund operating responsibilities since debt counts against the operations budget.
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