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New York MTA Sees Gap Of $9.9B

New York's Metropolitan Transportation Authority faces a $9.91 billion funding gap in its next five-year capital plan, according to a draft released yesterday.

The $28.08 billion program envisions selling $6 billion of bonds backed by new revenue sources established under a state bailout package earlier this year.

The agency also identified $128.83 billion of capital needs as part of a 20-year assessment.

"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," the plan said.

The new revenue stream, a combination of a payroll tax and motor-vehicle fees, is expected to fund the first two years of the program, leaving the remaining three years underfunded. When the payroll tax was approved by the Legislature in May, it was expected to support a larger debt issuance of $6.8 billion, according statements made at the time by Austin Shafran, spokesman for Senate Majority Leader Malcom Smith, D-Queens.

"It was an estimate taken at the time," Shafran said yesterday. "It might end up being somewhere between what had we initially thought and what their number is ... a lot depends on the money that's generated from the payroll tax and payroll fluctuates."

The MTA sold $600 million of revenue anticipation notes against the new revenue sources last month but its chief financial officer, Gary Dellaverson, has said that they will wait until next year to decide whether or not to issue bonds against the revenue streams as a new credit.

Shafran said the Legislature had anticipated that it would have to find more revenue to support the plan but didn't want to make commitments until the five-year capital plan was submitted.

"We'll have a better idea what amount of money is required," Shafran said. With the state facing a $2.1 billion current-year budget deficit, the Legislature will take that up first, he said.

The MTA's plan assumes that, in addition to bond financing, it will use a mix of federal, state and city funding as well as pay-as-you-go and money from asset sales.

The projected gap was slightly larger than the $9.31 billion hole projected last year as part of a special six-year capital plan created as part of the legislative review of congestion-pricing proposal that would have securitized revenue from fees charged on vehicles entering or travelling within much of Manhattan. That proposal, which would have supported $4.5 billion of bonds, died in the Legislature as did a subsequent plan to add tolls to certain New York City bridges.

Last month the MTA released a preliminary 2010 budget and four-year financial plan that assumed the authority would sell $10.32 billion of bonds from 2010 through 2013. The financial plan's borrowing schedule includes bonding backed by the new revenue sources for the 2010-2014 capital plan as well as borrowing on existing credits for projects approved in the current capital program that have not yet been financed.

The capital plan calls for $18.78 billion of capital spending on what the MTA terms "core" capital projects, which are projects that maintain the current system in a state of good repair and replace system assets on subway, commuter railroads and bus systems. It also calls for $5.73 billion for system-expansion projects such as the Second Avenue subway line and the East Side Access projects, which are currently under construction.

A revised five-year capital plan will be presented to the board next month following public input and will be submitted for final approval to the MTA Capital Program Review Board, a four-member board representing the Legislature, governor and New York City mayor.

Once submitted on October 1, the board will have 90 days to review the capital plan. The new plan is for the year that begins on January 1.

The MTA, the nation's largest mass transit system, has invested more than $75 billion in capital projects since 1982.

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