Capital Plan Next as N.Y. MTA Approves Operating Budget

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The board of New York's Metropolitan Transportation Authority on Wednesday approved a $14 billion budget for 2015 and four-year financial plan from 2015 through 2018.

The plan budgets 4% toll and fare increases for 2015 and 2017, each spread over two years, with the board to vote on the proposed hikes in January.

Wednesday's action was perfunctory.

The big uncertainty for the MTA as the calendar flips to 2015 is its proposed $32 billion, four-year capital plan, which is separate from the operating budget. A state review panel in October rejected without prejudice the capital program, which now has a $15.2 billion funding gap.

Chairman and chief executive Thomas Prendergast said the recent findings of the Transportation Reinvention Commission, a 24-member panel appointed by Gov. Andrew Cuomo, helped frame current and future capital plans, while shying away from specifics.

"A dialogue needs to happen," Prendergast told reporters after the monthly board meeting in midtown Manhattan.

Prendergast hedged when asked if he favored tolling on East River bridges, part of the MoveNY initiative backed by former New York City transportation commissioner "Gridlock Sam" Schwartz aimed at providing $1.4 billion annually in transportation infrastructure improvements. The Cuomo panel included East River tolling as a possible revenue option.

"We have to establish the need of the MTA to the region," said Prendergast. "[East River tolling] is a valid question and one that's going to be asked. But we need to have a dialogue over a period of time before we can discuss funding options."

MTA officials say the capital program is a drop in the bucket compared with its estimated $1 trillion benefit to the region's economy.

Discussing the operating budget, Prendergast cited internal efficiencies, saying the authority is on target to cut $1.1 billion in spending this year, with a goal to reach $1.6 billion annually by 2018. In addition, the MTA is budgeting $290 per year annually in pay-as-you-go, or PAYGO, to the capital plan beginning in 2015.

He also cited real-estate related moves including the relocation of headquarters to 2 Broadway in lower Manhattan and the selloff of properties including its current headquarters in Midtown.

Prendergast and board members also acknowledged that record subway ridership, averaging 6 million daily on weekdays, is creating new sets of problems. Prendergast said the authority would consider tapping into overtime or even adding staff to help shepherd riders onto overcrowded trains. Electronic train-control systems are a more long-term option.

Board member Charles Moerdler said overcrowding compromises rider safety. "You can't fit more sardines into a sardine can," he said.

The MTA, a state agency, is one of the largest issuers in the municipal marketplace, with roughly $34.9 billion of debt. Moody's Investors Service assigns an A2 rating to the authority's transportation revenue bonds, its primary credit. Fitch Ratings and Standard & Poor's rate them A and AA-minus, respectively.

The board also rubberstamped the finance committee's authorization two days earlier to issue up to $2 billion in bonds for approved transit and commuter capital programs, and up to $250 million for bridges and tunnels capital programs.

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Transportation industry New York
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