Empire Wait
Cuomo’s band-aid fix means debt & delays
GOV. Cuomo is “the infrastructure governor,” rebuilding La Guardia Airport and making sure he was the star of the inaugural ride along the Second Avenue subway’s first three stations last year. But when it comes to New York’s most critical infrastructure — the subways — Cuomo hasn’t figured out one rather important part: how to pay for it.
Cuomo has noticed that Gotham’s nearly 6 million daily subway riders have endured months of delays and disruptions. The system “is in dire need of upgrades and repairs,” he said last week.
But the state-run Metropolitan Transportation Authority’s longterm budget doesn’t reflect this urgency. Last week, the MTA increased this five-year “capital budget” — which pays for things like the subway cars and station rehabs — from $29.6 billion to $32.5 billion.
The money will go toward some important improvements. The MTA is adding $100 million to speed up a payment system so that people can use tap cards and mobile phones to pay their fares instead of swiping.
And though the MTA hasn’t added new money to build a better signal system more quickly, that may be because Cuomo just announced a $1 million prize for the outside team that comes up with an idea to do this more efficiently — a good idea.
Fiscal experts have complained that the big projects — $1.5 billion added last week to build a third track along the LIRR, and an extra $700 million to keep building the Second Avenue Subway — are irresponsible when the old system has so many problems. But New York can’t handle a bigger population and more tourists and commuters without this growth.
The real problem is that Cuomo wants to be lauded as the infrastructure governor without paying the fare.
Consider: this extra $2.9 billion in spending will come mostly from debt. Rather than borrow $5.9 billion for the five-year capital plan, the MTA will have to borrow $7.6 billion. (The rest of the money is supposed to come from Albany directly, from state tax contributions, plus City Hall and Washington.)
But the MTA already owes $37.9 billion for past capital plans. That means this plan alone will increase the authority’s debt by 20 percent. Indeed, it’ll mean the MTA has increased its debt by 80 percent over just a decade, even when adjusted for inflation.
At last week’s meeting, the MTA said the new debt won’t mean higher fares. This is untrue. The MTA already faces a nearly $400 million deficit in less than three years — largely because by 2020, annual debtservice costs will be half a billion dollars higher than they are today, rising to $3.1 billion.
To be clear: the MTA’s rickety financial structure is the state’s responsibility. At the board meeting last Wednesday, a Mayor de Blasio appointee to the MTA’s board, Veronica Vanterpool, voted against the proposal, claiming the debt load would be “crushing.” Another de Blasio appointee abstained.
By contrast, Fernando Ferrer, whom Cuomo named acting MTA chairman recently, blithely said “we have to borrow if we want things.”
In the next recession — or before — the MTA will be right back where it was in 2009: needing the Legislature to pass a new tax to cover the massive shortfalls.
By then, the MTA will be in worse shape.
Consider: the most ambitious plan to fund the authority, MoveNY, would make car or truck drivers to pay to drive into New York’s most congested areas. It would raise $1.3 billion a year.
That’s enough for about half a billion dollars in annual road repairs and commuter-rail discounts, and to pay the interest on $12.5 billion in new debt.
The sudden increase to the new capital plan means we’re spending well over half this money before we even have it.
Tolling drivers to come into Manhattan to support the MTA is inevitable. The question is what happens after that — because by the time the state does get around to this measure, it will have already spent the money, and will need billions more for the five years that start after this five years is up.