Filling the Gap

Let’s Play Kick the Can!

NYSCapitolPanoramaHear Ye! Hear Ye! The 2015 New York State legislative session is officially over.

The “Big Ugly” — which passed last night after an additional week of negotiations — tackles highly contentious issues such as mayoral control of the NYC educational system, rent regulations, and 421-a tax abatement. Some issues were entirely resolved under the legislation; others were given extensions until a better compromise could be reached; and yet others kicked down the road for another day (word’s still out on whether the governor signed the doggy dining bill).

What is glaringly missing in the omnibus bill is how to fill the $14 billion hole in the MTA’s Capital Plan for 2015-2019. Originally implemented in 1982 under the wisdom of then-MTA Chairman Richard Ravitch as a means to keep our system up and running, expand and improve service, and invest in major capital projects such as the 2nd Avenue line, our transit system has never been this close to falling into a 1970s time warp due to inaction in Albany.

This article is the final in a series examining mechanisms on how the MTA’s Capital Plan for 2015-2019 could be funded. Thus far, we have reviewed fill-the-gap alternatives to the Move NY Fair Plan, none of which individually or collectively can bring faster, safer, fairer transportation to New Yorkers and many of which are dead on arrival: Filling the Gap with More DebtFilling the Gap with a New Gas TaxFilling the Gap with an Increased Sales TaxFilling the Gap by Increasing the Payroll Mobility Tax; and Filling the Gap by Reinstating the Commuter Tax.

We never thought we’d be here, but here we are.

It appears Albany has kicked the can down the road and decided to do nothing instead of find a way to fully fund the nation’s largest transit system that serves close to 6 million riders a day.

For now, everything remains up in the air. And as summer descends on a city of 8.5 million people, the air is going to grow stickier and thicker with more of the same: overcrowded subway cars and station platforms, delayed trains and buses, and signal and switch breakdowns.

Our fares were hiked 4% in March — the seventh time in 12 years! We keep paying and paying — and so do drivers strapped with unfair, exorbitant outer bridge tolls. And yet, we see our system grinding to a halt. It’s only going to get worse. Not better.

Overcrowding on the A Train after complications with the signaling system led to backed-up service.

Overcrowding on the A Train after complications with the signaling system led to backed-up service.

This isn’t the first time that funding the Capital Plan has caused headaches in Albany, however. As Felix Ciampa, executive director of the Urban Land Institute New York, and William Henderson, executive director of the Permanent Citizens Advisory Committee to the MTA, noted in a recent Op-Ed in Crain’s:

“When the MTA faced a similar shortfall in its last five-year program, state leaders divided the funding into two-year and three-year segments. That ended up increasing the MTA’s debt to $34.1 billion and led to a reduction in investment from the originally proposed five-year program. The results can be seen every day as we watch the system struggle to accommodate surging ridership. Given the absence of any real discussion of funding solutions, state leaders may be tempted to again divide the funding for the program. Doing so, and funding the program through borrowing, would only push the search for money down the road. We urge lawmakers not to take this approach again.”

We’ve noted on this blog many times the risk to filling the gap with more debt:

“MTA finance chief Robert Foran floated one scenario at the MTA Board meeting last Monday, April 27: a 15% fare and toll increase to underwrite debt covering the unfunded gap of $15 billion. This figure comes from a report by State Comptroller Thomas Di Napoli last October. The study found that the financing costs for every new $1 billion in MTA debt are equal to a 1% fare and toll increase.”

With the $14 billion gap, we’d be looking at 14% fare and toll increases, on top of the 4% scheduled every two years. And if a two-year and three-year investment approach is taken, it means trouble for our Northern cousins.

Risks to Job Growth & Prosperity for Upstate & North Country

If the MTA Capital Program is not fully funded, it’s not just the so-called flat-landers that are going to struggle.

Our North Country friends will, too. Not from late trains or a system that can no longer handle the largest ridership since the 19040s.

No. They will struggle economically.

Just when the State’s economy is seemingly coming back from the Great Recession, Upstate and North Country jobs are again in jeopardy. If the MTA Capital Plan is not fully funded, the agency will have no ability to contract for new trains and buses. And that means a drastic drop in production. As Tri-State Transportation Campaign notes:

“The North Country transit manufacturing cluster has had a significant economic impact. In 2012 transportation manufacturing exports amounted to $7.2 billion, a significant chunk of which came from Upstate and North Country plants, and in 2013 it paid the third-highest average wage of any cluster in the region — $58,300 according to an analysis by the New York State Department of Labor. The MTA’s 2005-2009 capital plan sustained 8,714 jobs and had a $1.1 billion economic impact on the North Country, and impact has only increased since then.”

As the MTA goes, so goes the entire New York State economy.

MTA Chairman Tom Prendergast said this week as the session was winding down:

“In this period of time when the Legislature adjourns … and before they convene again in January, we’ll certainly start to reach that point, where a greater number of projects are being held up and we get actually delays.”

Move NY is committed to not letting this happen. In the coming weeks and months, we will continue our campaign to see the Move NY Fair Plan enacted as a mechanism to fund the MTA Capital Plan. But we need your help. Follow us on Twitter and Facebook to keep updated on how your voice can be heard — not only to make New York City’s transportation system faster, safer, and fairer but also to keep the jobs Upstate and in North Country. We are one state, standing together. And together we can make anything happen.

 

 

 

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