New York’s Metropolitan Transportation Authority Friday announced it had slashed $1.8 billion from its proposed five-year capital plan in a bid to win state approval. Like an earlier proposal rejected last year by Gov. David Paterson, the slimmed-down $26.27 billion capital program has a $9.91 billion funding gap.
“We certainly recognize that there’s a big gap that needs to be filled, but better to actually get on with the program, move things forward … than be in a position today where we’re not getting along with a set of critically important capital investments,” said MTA chairman and chief executive officer Jay Walder.
The MTA’s $2.5 billion bridge and tunnel capital program would be fully funded through toll revenue under the proposal. The first two years of the authority’s other capital projects would be funded through $6 billion of bonds backed by a payroll tax enacted last year, $2.28 billion of federal funds, and $864 million from several other sources, including New York City.
“What we’re showing you is, this is the money we have for the first two years, we can show you we can use it well, we can show you that the projects that we’re starting will have the money to complete those projects,” Walder said.
The bonding portion of the funding relies on a payroll tax imposed last year on employers in the 12 counties served by the transit agency known as the regional mobility tax.
Regional mobility tax receipts have been disappointing, bringing in $787.8 million last year, 21.2% below the $1 billion forecast for 2009. Last year, the MTA sold $600 million of revenue anticipation notes secured primarily by the tax and last month sold another $475 million. The MTA has not gotten a long-term rating on the mobility tax separate from its existing credits.
“We haven’t structured the credit,” Walder said. The capital program proposal presented last week doesn’t rely on bonds issued on other MTA credits that are backed by toll and fare revenue and other dedicated taxes.
“Effectively, those other revenue streams are already committed to existing bonds,” Walder said. “There’s no capacity to issue those, it’s the [regional mobility tax] that’s creating the new capacity.”
The savings anticipated under the proposal stem from a three-pronged approach to reduce capital spending by changing current MTA practices. The authority has used a top-to-bottom approach to rehabilitate subway stations. The new practice would focus only on station components that needed repair or replacement.
Walder also called for different agencies within the MTA to consolidate facilities — for example, a maintenance shop that could service both Metro North and Long Island Rail Road commuter trains.
Under another proposed change, the MTA would no longer replace rolling stock — train cars and buses — based on age. Rather, it would look at repairing when cost effective and seek to reduce rolling stock weight to save energy and reduce wear and tear on the tracks.
A draft proposal of the plan was submitted Friday to the authority’s board and to the state Capital Program Review Board, an oversight board. The MTA board will consider on the plan Wednesday and if approved, send it to the state oversight board for final approval.
