New York's Metropolitan Transportation Authority is counting on help from the state and its local partners to allow it to sell $8.5 billion of bonds- including $4.5 billion backed by congestion pricing revenues - to finance a portion of a proposed $29.55 billion, five-year capital spending plan, the authority announced yesterday.
Even if the funding assumptions - which includes $8.69 billion of federal funds - come to fruition, the authority will have a $9.31 billion gap to fund capital projects on its subway and bus system, commuter rails, and bridge and tunnels for that period. The MTA board yesterday approved submitting the plan to a state review board.
"We are at a crossroads and we must invest in our system," MTA executive director Elliot Sander told the board. The plan would "protect the vital nuts, state of good repair and normal replacement. It picks up where we left off in terms of fulfilling our commitments to finish the first expansion of the system in a generation as we prepare for growth."
The plan, which covers 2008 to 2013, was mandated by legislation last year that created a traffic mitigation commission to study congestion pricing and alternatives to reduce traffic and fund the authority's capital plan. The congestion pricing plan was approved by the commission last month and still faces an approval process by city and state government. The authority will have the opportunity to make revisions to the capital plan next month before voting on its final approval.
The plan assumes that the MTA will be able to use $600 million of additional subsidies annually from state and local governments beginning in 2010 and a steady revenue stream of $300 million from congestion pricing for some of the debt service on those bonds. Those subsidies have not been approved.
The congestion pricing plan approved by the commission envisioned fees generating $491 million annually, but not all of those funds would be available for debt service, said MTA chief financial officer Gary Dellaverson. The proposal treats the proposed revenue sources as streams for a new credit but said such a creation would require legislation, Dellaverson said.
"The actual determination as to whether or not it would be a standalone credit or be a part of the MTA's [dedicated tax fund bonds] or the rest would be judgments to be made as part of the legislation that enacts the congestion pricing, [is] not part of this discussion," he said.
At the heart of capital plan is a $20.04 billion "core plan" that focuses primarily on maintaining the system in a state of good repair and replacing rolling stock. The remaining $9.52 billion includes current and future expansion plans, such as the Second Avenue subway line.
The proposal drew praise from both New York City Mayor Michael Bloomberg and Gov. Eliot Spitzer but sharp criticism from Assemblyman Richard Brodsky, D-Westchester, who chairs the Assembly committee on public authorities and has been an outspoken opponent of congestion pricing.
"The MTA has presented a well-considered plan for critical investments to help the New York City metropolitan region grow and prosper," Spitzer said in a statement.
Spitzer said he was committed to providing $300 million of annual subsidies to the MTA and called on the Port Authority of New York and New Jersey to contribute to the MTA's capital plan. The Port Authority was noncommittal yesterday to Spitzer's request.
Brodsky blasted the plan, saying in a statement that it combined unrealistic hopes with tax and fare increases that would be needed to meet the multibillion-dollar shortfall.
"The capital plan is not supposed to be a wish list combined with a blank check," Brodsky said in a statement. "The plan is so far removed from reality that the Legislature will have to begin to clarify the problem immediately."
Brodsky said that a coalition of 29 Assembly members and one senator would propose an alternative to congestion pricing today.
The Legislature must approve a traffic mitigation program by the end of next month in order to qualify for a $354.5 million federal grant.