New York political and transit leaders breathed a sigh of relief as Gov. Andrew Cuomo, Mayor Bill de Blasio and Metropolitan Transportation Authority Chairman Thomas Prendergast announced an agreement on an intricate five-year, $26.1 billion capital program that ended 12 months of acrimony.
The announcement over the Columbus Day weekend includes provisions to avoid state raids of so-called transit “lockbox” funds and allow major city input on New York City Transit-related projects.
Under the largest investment ever in MTA infrastructure since its capital program commenced in 1982, New York State will commit $8.3 billion and New York City $2.5 billion.
The program “outlines the next five years’ worth of vital investments to renew, enhance and expand the MTA network,” Cuomo said in a statement. “This marks the largest investment in MTA infrastructure in history.”
Heavy lifting still remains.
The legislature must approve the state’s guarantee, which Cuomo intends to bake into the fiscal 2017 budget he will announce in January. Lawmakers could bundle the funding with an overall package that includes infrastructure repair statewide.
“Additional steps must be taken in a timely manner to further advance the critical capital program,” the Citizens Budget Commission watchdog organization said. “The important issue is not through which tax collecting entity — city or state — the money will flow, but whether the money will come via taxes on the region's residents and businesses, fares from MTA riders, or fees and tolls from motor vehicle users.”
The MTA is one of the largest municipal issuers, with roughly $36 billion in debt. Its need for a permanent, reliable funding source resurfaces with every five-year capital cycle. In 2009, state lawmakers approved a politically volatile payroll mobility tax that has survived numerous court challenges and provides the authority with $1.5 billion annually.
The tax amounts to 34 cents of every $100 of payroll that public and private employers within the 12-county MTA region pay.
Nicole Gelinas, a senior fellow with the Manhattan Institute for Policy Research, said the state could have trimmed labor costs in its MTA settlements, notably last year’s deal with Long Island Rail Road workers, and freed up capital.
“The labor agreements cost us about $1.5 billion which was about half of what Cuomo was [originally] asking the city for,” she said. “If Cuomo had done a better job with the labor agreements, we could afford more capital spending.”
The city will guarantee $1.9 billion from direct sources and $600 million through alternative non-tax levy revenue sources – for example, “value capture” from transit projects that foster real-estate development and fees generated by smartphone-dispatched car services such as Uber.
“The business community can’t afford not to have a safe and sound public transportation system,” said Richard Ravitch, a former New York lieutenant governor who as MTA chairman in the early 1980s crafted the initial capital plan.
“That remains true today,” Ravitch said in a
The MTA itself must identify a further $700 million in savings to close the gap. Last July, at the insistence of Cuomo administration officials, it reduced its request to the state’s Capital Program Review Board from $29 billion to $26.8 billion by using alternative procurement methods such as design-build and public-private partnerships.
Additionally, city representatives on the MTA board will have major input on the city’s use of its $2.5 billion, “with priority consideration given for projects and timing based on input from the city,” Cuomo said. “Likewise, suburban representatives are expected to have similar say on projects that affect their areas.”
The MTA committees and full board are scheduled to meet Oct. 26 and 28, respectively, at lower Manhattan headquarters.
