There is even more to “MTA Credit Rating Down, Worries Up” (Janelle Clausen – Aug. 17.)
Under past Metropolitan Transportation Authority Five Year Capital Plans, both the city and state collectively have cut billions of their own respective financial contributions.
They repeatedly had the MTA refinance or borrow funds to acquire scarce capital funding, formerly made up by hard cash from both City Hall and Albany.
On a bipartisan basis, this included past governors Mario Cuomo, George Pataki, Elliot Spitzer and David Patterson.
Billions more are still needed from both the state and city to make up for past cuts over previous decades.
Everyone insisted that the MTA continue financing more and more of the Capital Program by borrowing.
As a result, 17 percent of the annual MTA budget goes for covering the costs of debt service payments.
By the next MTA 2020 – 2024 Capital Program Plan, this will grow to 20 percent.
This means less money is available for operations to provide more frequent service to riders. It also means there is less cash to maintain the state of good repair and safety.
At the end of the day, the cupboard may be bare for any system expansion.
Contrast City Hall and Albany with Washington.
Federal support for transportation has remained consistent and growing over past decades. When a crises occurred, be it 9-11 in 2001 or Hurricane Sandy in 2012, Washington was there for us.
Additional billions in assistance above and beyond yearly formula allocations from the Federal Transit Administration was provided. In 2009, the American Recovery and Reinvestment Act provided billions more.
Most federal transportation grants require a 20 percent hard-cash local share. In many cases, the FTA accepted toll credits for local share.
This saved the MTA $1 billion in the previous 2010 – 2014 Five Year Capital Program.
Even more will be saved under the $32 billion 2015 – 2019 Five Year Capital Program. The same continues under the current 2015-2019 five-year capital program. Washington has made available over $1.3 billion in 2018 FTA formula funding for the MTA.
Let us assume the next MTA Five Year 2020 – 2024 Capital Program starts out at $30 billion.
First they need $2.265 billion, bringing the total local share of funding for the Second Avenue Subway up to $4 billion. This is necessary to leverage $2 billion in FTA New Starts dollars.
Another $1 billion each will be needed to complete fully funding the $11.2 billion LIRR East Side Access to Grand Central Terminal and $2.6 billion Main Line Third Track Projects.
How will the MTA find $19 billion more toward funding NYC Transit President Andy Byford’s proposed ten year $37 billion subway system recovery plan?
Some want billions more to accelerate bringing more of the 471 subway stations into compliance with Americans With Disabilities Act. Others want billions more to increase the numbers of new and rehabilitated subway cars and buses.
Remember how proud Gov. Andrew Cuomo was when the new Tappan Zee Bridge opened? He made a cold political calculation by promising not to raise the tolls when running for another term in 2018 or president in 2020 (the world’s worst kept secret.)
To pay back the $1.6 billion federal loan and $1 billion Thruway Authority Bond which helped finance the $3.9 billion Tappan Zee Bridge along with up to $900 million in final bills to the contractor, tolls will have to go up by double or more over several years.
Moodys Investment Services estimated the tolls will go up to $7.60 by 2021 and $15 by 2026 for the Thruway Authority to be able to pay back the loan, bond and up to $900 million more in pending contractor final payment claims.
The MTA will pay for Positive Train Control on the LIRR and MNRR by obtaining a $967.1 million loan from the Federal Rail Road Administration. It is a 22 year loan at 2.4 percent interest. The FRA loan will have to be paid back over the next four MTA Five Year Capital Plans ending by 2038.
When it comes to paying for all his $100 billion worth of transportation promises, Cuomo reminds me of Wimpy who famously said “I’ll gladly pay you Tuesday for a hamburger today.”
Taxpayers and MTA riders will have to deal with higher fares, taxes, more debt and borrowing in coming years to cover the costs for all of Cuomo’s transportation improvements. Cuomo doesn’t believe in pay as you go or balanced budgets.
Larry Penner
Great Neck
(Larry Penner is a transportation historian, advocate and writer who previously worked 31 years for the US Department of Transportation Federal Transit Administration Region 2 NY Office.)
