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Emergency Measures For MTA's Finances Draw Concern
By
Stephen Nessen
Published Apr 4, 2020
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Marc A. Hermann / MTA New York City Transit
By
Stephen Nessen
Published Apr 4, 2020
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This week, the state legislature approved several emergency measures in the budget that seek to prop up the MTA as it faces a future of financial uncertainty.
Among them is to allow the agency to borrow $10 billion to cover operating expenses, like making payroll.
“This is an unsustainable measure that is akin to racking up credit card debt to pay for rent and groceries,” Rachael Fauss, with the good government group Reinvent Albany, wrote in a statement. “If the MTA does borrow to pay day-to-day bills, its credit rating will be downgraded and the MTA will pay higher interest and debt service payments. These in turn would likely be passed on to riders through fare hikes and/or service changes.”
Nicole Gelinas, senior researcher at the Manhattan Institute thinks the MTA should slow down, use the $4 billion from the federal government first, and consider how much money it will need first before rushing to borrow any more money.
“Let’s use that money to buy us some time, and then hold some hearings on the issue, think about the best way to help the MTA going forward, before we just blow up the capital plan,” Gelinas said.
Another change enacted by the legislature gives the MTA the ability to access so-called “lock box funds,” which previously were previously only to be spent on capital projects. This means money from the mansion tax, Internet sales tax and congestion pricing, if it’s implemented soon, could also be spent on the operating budget.
This spending would be allowed through 2021.
The legislation will also require New York City to contribute $3 billion to the MTA’s capital plan. And if the city doesn’t comply, the state comptroller will redirect state aid meant for the city, to the MTA’s capital plan instead.
Gelinas believes the MTA shouldn’t be so hasty, as it has no idea what the capital plan will look like or how it will need to be revised because of revenue shortfalls and construction delays. “Why not wait and see what the revised capital plan looks like before we force the city to make these onerous contributions that it might not even be able to afford,” she told Gothamist.
And lastly, the state is finally forcing the city’s hand to pay half the costs of Access-a-Ride starting July 1st, this year.
The cost for paratransit services in 2019 was nearly $600 million.
Tagged
MTA
state budget
coronavirus
Stephen Nessen
Stephen Nessen covers transportation. Since 2008 he has reported on everything from Occupy Wall Street, the rebuilding of the World Trade Center site, Hurricane Sandy, to Trump’s campaign for president. His transportation reporting has taken him everywhere from the MTA’s secret Rail Control Center to the gleaming subways of Seoul. Got a tip? Email [email protected].
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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