Bloomberg: MTA Plan Must Include Funding for Capital Projects

The mayor’s office just released a statement insisting that the MTA financing plan address the transit system’s long-term needs:

As discussions for a permanent funding plan for the MTA continue, stop-gap measures that kick the big problems down the road must be rejected. For any plan to truly meet the needs of the metropolitan region’s people and our economy, it must include stable, reliable funding for capital projects.  Our transportation infrastructure is aging, and expansion projects are absolutely critical to keep New York City and the surrounding counties moving forward. We must invest in the system, even during economically difficult times, or buses, railcars, stations, signals and tracks will fall into disrepair and commuters will suffer — just as happened in the 1970s.

There is no painless option, but the issues will be no simpler a few months from now than they are today, which is why Albany must find a permanent stream of funding for capital projects — not next fall, but right now.

I called the mayor’s press office, and they don’t appear ready to get more specific than this. It’s fairly clear, however, that Bloomberg does not approve of Governor Paterson’s new direction.

He also raises a good point about timing. With contractors competing intensely during the recession, state DOTs across the country are getting deep discounts on stimulus-funded road projects. Shouldn’t New York City’s transit system get in on the construction bargains while we have the chance?

If you want to pass that message on to our leaders in Albany, follow the jump for some key email addresses.

  • Larry Littlefield

    By the way, the road and bridge “trust fund,” which was raided almost the moment it was enacted, is now almost all interest on past debts and no road and bridge projects as well. Same deal.

  • Andy

    ok well that’s all nice of Bloomberg to issue the statement – but I ask where is the money, at this point, going to come from, to fund capital plan?

  • Larry Littlefield

    “Ok well that’s all nice of Bloomberg to issue the statement – but I ask where is the money, at this point, going to come from, to fund capital plan?”

    From existing MTA revenue sources. And the roads and bridges can be funded by existing transportation trust fund revenue sources.

    The question is, where is the money going to come from to pay for all that debt and unfunded retirement benefits dumped on us by Generation Greed. And my view is that these can be funded making retirement income taxable, and sticking those who sell and move out with a massive “exit tax” real estate transfer tax. Or the debt service and pensions can not be funded at all. Let the legislature decide. They owe this money, not me or you or my kids.

  • Andy

    Larry – I dont follow – “From existing MTA revenue sources. And the roads and bridges can be funded by existing transportation trust fund revenue sources” —> what does that mean?

  • Larry Littlefield

    “Larry – I dont follow – “From existing MTA revenue sources. And the roads and bridges can be funded by existing transportation trust fund revenue sources” —> what does that mean”

    Had not the $30 billion been borrowed, and the pensions been underfunded and enhanced, and with tolls or CP and somewhat higher fares, and were we not being ripped off by contractors, the existing revenues are enough to pay for what we need.

    But they are all being sucked away by the past, as I discussed here:

    .
    http://www.r8ny.com/blog/larry_littlefield/the_2008_to_2013_mta_capital_plan_is_there_a_way_out.html

    The capital plan needs to be funded by $3 billion, and the feds will pay for some of it. But in a few years payments on past debts will be $2.3 billion. I say dump the debts and the unfunded portion of retiree pensions earned (or taken) in the past.

  • Andy

    Wow that’s crazy – thanks very very enlightening.

    Larry, given all that, however (which requires an amazing return to sensibility, which no one now seems to be showing), what do you think is currently realistic? Or even likely? You paint a bleak picture, and thanks for engaging in this dialogue

  • Niccolo Machiavelli

    “thanks for engaging in this dialogue”???

    Thats like thanking Ahab for “engaging” with the fucking White Whale.

  • Larry Littlefield

    “What do you think is currently realistic? Or even likely?”

    Institutional collapse.

    What is approaching is this. At time point A, you can spend more and pay less by borrowing (or borrowing off the books by deferring infrastructure maintenance and retirement costs). It seems like a good deal. But it has to be paid back.

    At first the money paid back in year B is far less than the up-front savings from borrowing and deferring.

    Eventually, however, so much money is going to the past that the amount available to spend in year B is no more than, and then less than, what WOULD have been available had each year paid for itself. So you have less and less to spend each year despite paying more and more.

    That’s where we are at the MTA, and going overall.

    Now there is a recession, with related drops in what most people earn that isn’t matched by drops in what transit workers earn, so we’ll have to pay more and accept less to make up the difference. But that can end with the recession, and “doomsday” doesn’t bother me.

    The debt and deferred costs from the past are ongoing. That bothers me.

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