New York Gov. David Paterson yesterday called for the formation of a "blue ribbon panel" to look at options to fund the Metropolitan Transportation Authority's capital plan. The panel, which will be headed by former MTA chairman Richard Ravitch, is being created after the Legislature failed to enact a congestion pricing proposal that was expected to back $4.5 billion of bonds.
One area the panel will look at is the authority's borrowing practices.
"We have to get the MTA out of its habit ... [of] excessive borrowing," Paterson said in a speech before the Association for a Better New York. "The MTA doesn't even have a governor and they are the fifth largest debtor in the entire country. That has to be changed."
The MTA has $26.08 billion of debt outstanding. The authority gets 39% of its revenue from subway and train fares and 33% from dedicated taxes, according to MTA documents. The remainder comes from tolls, state, and local subsidies, and other revenue sources. Those sources are projected to generate $10.4 billion for the authority this year.
New York City MayorMichael Bloomberg's congestion pricing plan had been projected to have generated an estimated $490 million annually by charging tolls to vehicles driving within a large area of lower Manhattan.
The new panel will comprise business leaders, civic leaders, and economists that will look into plugging an even larger hole in the MTA's $29.55 billion six-year capital plan which already had $9.31 billion gap. The panel will also consider how best to balance the levying of taxes and subsidies that help fund the MTA with fees and fares paid by users of the system and whether there are elements from Bloomberg's congestion pricing plan that could still be used, Paterson said.
Details about the size and composition of the panel or what kind of recommendations it would produce and under what time constraints were not available yesterday.
"The governor asked me yesterday whether I'd be willing to chair this commission to come up with recommendations on how to finance the MTA's needs and I said I would, given the fact that it was an important part of my life and I care deeply about the public transportation system," Ravitch said. "I hope that over time the congestion pricing issue can be back on the table with perhaps more public understanding of its virtues."
Ravitch declined to say whether a public-private partnership concession might be appropriate for the MTA.
"It's a complicated issue," he said. "Obviously one wants to try to figure out how to get as much private capital into the system as you possibly can, but the line between public capital and private capital is a difficult one to draw with precision," he said.
Scott Trommer, a senior consultant at Public Financial Management, Inc. who specializes in transportation, said the MTA would have to look its "traditional funding and financing strategies" such as selling excess property, trying to get greater federal, state and local subsidies, cost-cutting, or finding new revenue sources to make up for not having congestion pricing revenue.
"Congestion pricing could return as an issue, he said. "Given the growing congestion in the region and the growing needs of the transportation network, it's an idea that will come back and will be revisited and reconsidered and may ultimately be passed the next go around."
The governor also commented on the state's late budget and the economic downturn. Paterson criticized the Legislature for presenting him with a budget that was "too big and too bloated" and called for belt-tightening rather than new taxes. He said that although the budget had been cut since it was first proposed, most of those savings would be "eaten up" by reduced revenue forecasts due this month. "Though our budget is sound now, it will be dependent on whether or not people get the message that . . . our economy is reeling."
Paterson also suggested that the state's debt issuing authorities deserve closer scrutiny.
"The reality is that we have 640 public authorities in this state, only 11 of them regulated by the Public Authorities Control Board," Paterson said. "Maybe we should find out what the other 629 do, because they consume billions of your and my dollars every year in taxes."