New York City council speaker opens door to transit funding boost

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New York City funding for a subway improvement plan could materialize under stringent conditions, City Council Speaker Corey Johnson said Thursday.

"We would be willing to support some measure of funding," Johnson told Metropolitan Transportation Authority Chairman Joe Lhota at a council transportation committee budget hearing at City Hall.

Gov. Andrew Cuomo and the state-run MTA have asked the city to backstop half of the $836 million first-phase triage of the so-called subway action plan, which Lhota launched in July 2017 amid a crisis that included signal malfunctions, derailments, track fires and widespread delays.

Cuomo has budgeted the other half in his proposed fiscal 2019 budget.

Mayor Bill de Blasio has resisted, saying the MTA is a state agency and Albany should redirect $400 million of intended transit dollars it used to balance its own general fund.

Johnson wants other communities in the MTA's system to pitch in. "We are hardly the only beneficiaries," he said. The state-run MTA, one of the largest municipal issuers with roughly $38.7 billion of debt, serves the city's five boroughs plus several suburban and upstate counties.

In addition, said Johnson, any direct subsidy should be one-time, not recurring, and include a lockbox provision, "preferably without a key." He also insisted on vigorous monitoring of any new funds and accountability from the MTA, and for the authority to communicate better with the public.

He also opposes funding for cosmetic station improvements, saying money should go directly to service.

"People just want goddamn results," said Johnson.

Lhota plans to meet with Johnson again.

"He gave a broad scope of what he was talking about, and I need to understand more, but I think it's an opening and it's well worth pursuing," he told reporters after a two-hour grilling from council members.

Both Johnson and Lhota favor congestion pricing, an initiative before the state legislature that Gov. Andrew Cuomo's Fix NYC panel supports.

"You can't just go willy-nilly into congestion pricing," said Lhota. "You have to go at it in a substantive way."

De Blasio has called for a millionaire's tax to help fund transit.

Johnson has differed on transit funding from de Blasio, whose preliminary $88.7 billion fiscal 2019 budget is before the council.

Lhota, a 2013 mayoral candidate who returned last year for his second run as MTA chairman, said lack of funding from the city for the action plan has "muted" some of its benefits. Lhota, however, said the plan so far is working, based on reduced wait times and fewer signal malfunctions.

"Let me be clear, we have a long way to go," said Lhota, "We are far from finished."

The city contributed $2.5 billion to the MTA's capital program for 2015-2019. Cuomo's proposed state budget would put the city on the hook for the New York City Transit portion of the MTA's five-year capital plan -- $16 billion, as opposed to the $2.5 billion city officials recently contributed.

Additionally, it would mandate that should the governor declare a state of emergency on city transit, the city would have to match any funding provided by the state within 60 days.

De Blasio and his budget officials say that would punch a hole in the city's budget and jeopardize funding for such programs as pre-kindergarten and affordable housing.

Lhota said he and his leadership team are continuously working on efficiencies and cost containment, including more streamlined project delivery.

"Project management has been dismal on the capital side," said Lhota. "We need to do a better job of managing that money."

The MTA's overtime spending last year reached a record $1.2 billion, up 20% over 2016, according to data posted on, a website of Albany-based think tank Empire Center.

Conflict between state and city over funding for the city's mass transit has percolated for decades. "What people don't want, what I don't want, is to be in the middle of a political squabble," said Johnson.

Over the past two years, Cuomo has tightened his control over the authority.

"The governor, who has probably has $25 million socked away for his re-election and has national aspirations, I think ... the one thing that could undo him is the problems with [transit],” Howard Cure, director of municipal bond research for Evercore Wealth Management, said on a Bond Buyer podcast. "I think the governor wants to apply funding to the problem.”

Battles over MTA funding have triggered city-state political football since Gov. Nelson Rockefeller formed the authority in 1968, primarily to usurp control from the city’s infrastructure czar, Robert Moses, who still controlled the cash-cow Triborough Bridge and Tunnel Authority. Rockefeller tapped TBTA’s coffers to fund mass transit.

“Rockefeller may have indeed created a clever funding mechanism to keep subway fares low for a long period of time,” said Gurtin Municipal Bond Management in a February report. “However, he also ensured a prolonged battle between the state and the city.”

The subway crisis of the past year has intensified the bickering.

“Both the city and state enjoy taking credit for the good news, such as the Second Avenue subway expansion, but are happy to blame the other party when problems arise or when new funding is needed,” said Gurtin. “Fissures that have long existed under the surface are now visible to everyone.”

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Infrastructure Budgets Joseph Lhota Andrew Cuomo Bill de Blasio Corey Johnson Metropolitan Transportation Authority State of New York City of New York, NY New York