With time winding down on the state budget process and no solution in sight for fully funding the capital program of New York's Metropolitan Transportation Authority, an alternative funding option has emerged along with a warning of an even bigger shortfall.
The Citizens Budget Commission watchdog organization called for new statewide vehicle-miles-traveled tax and tolling policy changes to offset a gap that it pegged at $19 billion.
In its report, "More Than Fare: Options for Funding Future Capital Investments by the MTA," the CBC estimated that the MTA requires $1 billion to $1.2 billion in additional future annual revenue to fund an adequate capital investment program for 2015 to 2019.
While MTA officials have estimated the shortfall at $15.2 billion in its proposed $32 billion plan, CBC numbers crunchers say the gaps, using "reliably available [funding] sources under current policies," are $19 billion using a baseline equal to MTA-recommended plan. For a $29.3 billion plan, reflecting constrained sources, the shortfall would be $16.5 billion.
The MTA is one of the largest municipal issuers with $34.6 billion in debt as of Sept. 30, according to an independent audit. Debt service accounts for 16% of total MTA costs.
According to CBC, debt-service payments will have spiked from an average of 5% annually, from $2.3 billion in 2014 to $2.9 billion by 2018.
A state review panel consisting of top Albany officials rejected the capital program proposal in October without prejudice.
The CBC report cited four options for increased motor vehicle cross-subsidies: increased vehicle registration, a higher gas tax, new tolling policies and the vehicle-miles-traveled, or VMT tax. The latter, combined with the tolling changes, have the greatest potential to close the gap, CBC said.
"It is CBC's answer to the question on which too many of our political leaders have been silent: 'How to pay for the MTA's next five-year capital program?,' " consulting co-director of research Charles Brecher told board members Wednesday. Brecher co-authored the report with research associate Jamison Dague.
The organization has endorsed the MoveNY congestion-pricing overhaul championed by engineer and former New York City traffic commissioner "Gridlock Sam" Schwartz. That plan would impose tolls on now-free East River bridges and traffic moving south across 60th Street in Manhattan.
"It's always interesting in a positive way to hear what other people have to say about something your organization is doing," MTA chairman Thomas Prendergast said of the CBC report after the board meeting in lower Manhattan. "They've looked at the capital program, they've endorsed it. I think you heard the comments today from Charles Brecher in terms of the order of magnitude of the size of the ask seems to be about right, so that's good to hear."
The state budget deadline is April 1, with no apparent deal in the works for the capital plan. MTA officials may face the reality of slimmed-down funding.
"We would like to have further dialogue and reach consensus about what the size of the ask is, is it $32 [billion], is it $31.5, is it $31 or whatever," said Prendergast. "I won't tell you that we're agnostic about funding alternatives, but we would like to hear what all the different funding alternatives are and have them be part of the dialogue about how do we fill the gap."
CBC based its recommended reliance on cross subsidies on its "50-25-25" guidelines for transit funding, meaning half the money should come from transit fares and quarter each from motor vehicle user fees and from state and local government tax subsidies.
"I agree with CBC that motorists are a good source," said Gene Russianoff, an attorney and chief spokesman for the Straphangers Campaign subway ridership lobbying group. "But we are most comfortable with a funding system in which all who benefit pay, such as riders, drivers [and] property owners."
