New York's Metropolitan Transportation Authority, which needs up to $14 billion to plug a gap in its proposed five-year capital plan, received an encouraging signal from City Hall.
"We are ready to sit down today and have a full and frank discussion about comprehensive funding options for this essential engine of the state's economy," First Deputy Mayor Anthony Shorris wrote MTA Chairman Thomas Prendergast in a
A state capital review board last fall rejected without prejudice the MTA's proposed $32 billion program for 2015-2019, which covers so-called state of good repair maintenance, enhancements such as station countdown clocks and continued expansion of such megaprojects as the long-delayed Second Avenue subway line along Manhattan's East Side.
"Although the MTA should always look for ways to do more with less, there is little fat to cut," wrote Shorris.
In May, after Mayor Bill de Blasio increased the city's contribution to the MTA capital program to $657 million over five years, Prendergast
According to the Independent Budget Office watchdog organization, had the city kept pace with inflation on its $136 million funding of the MTA's original capital program from 1982 to 1986, its annual contribution would now be $363 million, providing more than $1.8 billion to the proposed plan.
Options, according to Shorris, include the MoveNY toll-swap and congestion-pricing plan championed by engineer and former city transportation commissioner "Gridlock Sam" Schwartz, which would toll now-free East River bridges and vehicles entering Manhattan south of 60th Street.
Other possibilities, he added, could be to raise MTA-dedicated taxes and direct aid to the capital plan from municipalities and counties.
"The deputy mayor needs to have a seat at the table, and he will have a seat at the table. It's a trillion dollar asset you've heard me talk about; $800 billion of that asset is in New York City," Prendergast told reporters. "The city has to be a major player because that's where a lot of infrastructure is; that's where the benefit is."
MTA Chief Financial Officer Robert Foran told board members the authority could whittle the gap to $12.4 billion, using increased pay-as-you-go contributions.
The financial plan assumes $125 million in new annual contributions to pay-as-you-go - or "paygo" -- capital, as well as an additional $75 million one-time contribution in 2015, for a total of $700 million over the 2015-19 plan period. Over the expected eight-year expenditure period, these funds would generate $1.1 billion in pay-as-you-go capital program funding, or $2.4 billion in new capital funding if also used to pay debt service.
Re-estimates and other changes are $1 billion favorable through 2018, Foran said in his briefing of the $15.1 billion preliminary budget that the board must approve in December. Major drivers included $401 million in new real estate transaction tax receipts, $348 million in reduced pension expenses, $331 million in energy savings, $212 million in increased fare and toll revenues, and $172 million from better-than-expected financial performance in 2014.
Offsetting factors were higher costs including $227 million for new operation and maintenance investments and $124 million for information technology.
The financial plan remained balanced through 2017, said Foran, while the projected deficit drops from $305 million in 2018 to $175 million, then $224 million for 2019. The MTA plans fare hikes of about 2% in 2017 and 2019.
The MTA is one of the largest municipal issuers, with roughly $35 billion of debt. According to Foran, debt service covers about 16% of the operating budget. It could increase to 19% by 2019. "It will be slightly higher depending upon what we do here," he said.
Board vice chairman and former Bronx borough president Fernando Ferrer said escalating debt raises red flags.
"We used to do this in the city. We were reflexively nervous when we approached the 20% benchmark," said Ferrer, who twice ran for New York City mayor. "The distance from me today and that experience doesn't make me any less nervous."
