The prospect of a state budget that would divert $40 million of transit funds for related debt service doesn't faze the chairman of New York's Metropolitan Transportation Authority.
"We understand the importance of the $40 million, especially to those who fought for the lockbox, but whatever needs we have the state has met," Thomas Prendergast told reporters after a perfunctory MTA monthly board meeting in midtown Manhattan Wednesday. "When we present the budget, we're in alignment with the New York State budget office, and that's where our focus is.
"Am I sensitive? Absolutely," he said. "As it stands, we've gotten what we've asked for, but one day might be a different story."
Gov. Andrew Cuomo's proposed state budget would redirect $40 million from transit operations toward debt service on $2.4 billion of bonds the MTA issued in 2002. The MTA is one of the largest issuers in the municipal marketplace, with about $32 billion in debt.
Standard & Poor's rates the MTA's primary credit, transportation revenue bonds, A-plus, while Fitch Ratings and Moody's Investors Service rate them A and A2, respectively.
The state budget deadline is Tuesday. "We'll see in a few days," Prendergast said.
Through the diversion, the MTA stands to lose $350 million over 17 years.
Cuomo officials have said the bonds benefit the MTA anyway, and that the state has subsidized the MTA through other means.
Passenger advocates, though, call the reallocation a raid on a dedicated, or "lockbox" account and say the MTA needs the cash, pointing to sharp service cuts in 2010 and expected fare and toll increases in 2015 and 2017.
"Oh great and powerful aides in Albany, serve the riding public and stop treating the MTA as a cash cow," said Gene Russianoff, an attorney and chief spokesman for the Straphangers Campaign subway ridership lobbying group.
After paying off the bonds from the general fund over a decade, state last year began paying the debt from transit funds.
Moody's last month acknowledged the MTA's managerial degree of difficulty in a report that preceded its $400 million sale of transportation revenue bonds. "Multi-level government involvement in the MTA's financial and capital planning creates a complex political environment and adds to management challenges," Moody's said.
Lockbox raids have surfaced recently in discussions related to aging infrastructure throughout the New York City region, MTA included.
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Last week, engineer and former New York City traffic engineer "Gridlock Sam" Schwartz also called for a dedicated funding stream in his proposal to overhaul the region's bridge-tolling system.
The MTA operates the Robert F. Kennedy, Throgs Neck, Verrazano-Narrows, Bronx-Whitestone, Henry Hudson, Marine Parkway-Gil Hodges Memorial, and Cross Bay Veterans Memorial bridges.
It also operates the Hugh L. Carey (formerly Brooklyn-Battery) and Queens Midtown tunnels.
Prendergast said the MTA is waiting for a second federal presidential emergency board to convene, to help its Long Island Rail Road unit reach an agreement with eight of its unions.
A work stoppage on the LIRR could happen as soon as July 19.
December recommendations of the first emergency board failed to settle anything.
"It's like baseball arbitration where they take the better of the two," said Prendergast.
