Albany Has Already Saddled the MTA With More Debt Than 30 Nations

As Albany contemplates paying for the MTA capital program by borrowing as much as $15 billion, it’s worth pausing to examine the debt load straphangers are already shouldering. To put it in perspective, the MTA carries more debt than Bolivia, Tanzania, and Luxembourg combined, according to numbers compiled by the Straphangers Campaign. The MTA owes more than at least 30 nations, including several with populations much larger than New York City.

"If I inflate the MTA's debt load, straphangers are the ones who will be left underwater." Photo: MTA/Flickr
With no action from Governor Cuomo, MTA debt will balloon even more. Photo: MTA/Flickr

Some level of borrowing makes sense, but shrinking state and city support for the MTA capital program has led to a ballooning debt load that pushes fares higher and impedes service.

The MTA currently owes $34.1 billion to pay off bonds issued for capital investments, according to Straphangers, and the agency is spending $2.2 billion on debt service this year. That’s 17 percent of its operating budget, a hair shy of the amount it spends to run Metro-North and the Long Island Rail Road.

Unless Governor Cuomo and the legislature decide to stop treating your MetroCard as a credit card, things will only get worse.

Even with no new borrowing, MTA debt is on track to exceed $39 billion by 2018, according to Comptroller Tom DiNapoli.

The $32 billion capital program, which fixes track, replaces trains and buses, and expands the system, is facing a $15.2 billion shortfall. Without a new revenue stream (this is where toll reform would come in handy), straphangers will soon be paying off the difference in the form of higher fares.

With several fare hikes since 2007, a four percent hike approved for this year, and another on deck in 2017, fares are already increasing faster than inflation. DiNapoli estimates that every billion dollars in new debt will translate to an additional 1 percent fare hike.

Does Governor Cuomo care enough about New York City transit riders to prevent super-sized fare hikes? Albany budget season is heating up, so it’s now or never. So far, though, Cuomo has given no indication that he’s serious about fixing the MTA’s debt problem.

  • Bolwerk

    They could have raised this issue last year when the operating budget was about to be compounded by generous labor giveaways (mainly to the commuter railroads). That added over $100M/year to the budget. Granted, it would only have decelerated the increase.

    It was also a good time to look at cutting some fat. It might piss of the union, but there are things the MTA does that it doesn’t need to do anymore. I know, it’d be tragic if Cuomo lost even 1% off his victory margin. 🙁

  • Mark Walker

    The MTA is a state agency and no one has more influence over its well-being than the governor. Why do the mainstream media not cover this story? Why does no one shove a mic in Cuomo’s face and make him accountable for his actions (the raids) and the inactions (acting as if funding the agency is not his responsibility)? Ultimately, the NYC metro area is the economic engine for the entire state, the MTA is the metro area’s heart and lungs, and Cuomo’s mishandling of MTA is sending the state economy straight toward a major heart attack.

  • Anon resident

    Cuomo doesn’t care, I gather he has no idea where the Metro-North train station is near his house in Mt. Kisco. He’s viewing New York by being driven around in a SUV.

  • Larry Littlefield

    Perhaps the answer is “fairness.” After all, all the other Governors, state legislators and Mayors got away with this for 20 years. Why should he and DeBlasio hurt their careers by caring about a future Generation Greed won’t be around for?
    There are two choices left.
    Those here now and in the future can pay for all the ongoing normal replacement for the next 20 years AND all the ongoing normal replacement for the past 20 years (plus interest).
    Or the system could be left to deteriorate and then collapse — after more people have had the chance to cash in and move out.
    Lie and pretend seems like a good option for me. The media certainly isn’t going to object and tell it like it is.

  • jackson

    Irresponsible management from Cuomo’s hacks

ALSO ON STREETSBLOG

This Fare Hike Is Just a Hint of What’s to Come

By Ben Fried |
With the MTA set to raise fares 4 percent over the next two years, it’s time for the bi-annual spectacle of fare hike hearings, where political appointees absorb the brunt of straphanger anger so Governor Cuomo doesn’t have to. This time around, the proposed increase in fares isn’t that big — a larger hike was […]

How Did Straphangers Make Out in the Cuomo-de Blasio MTA Deal?

By Ben Fried |
On Saturday, Governor Cuomo and Mayor de Blasio reached a deal to close the gap in the MTA’s five-year, $29 billion capital program, with the state pitching in $8.3 billion and the city contributing $2.5 billion. The agreement ends a drawn out political fight between the governor and the mayor. But enough about politics. How do transit […]