October 30, 2014
By Neal Tepel
The Metropolitan Transportation Authority’s (MTA) short-term financial outlook has been buoyed by the economy, but the goal of closing the unprecedented funding gap in its proposed five-year capital program remains elusive.
“The MTA is in better financial condition thanks to its own efforts and a stronger economy,”said New York State Comptroller Thomas P. DiNapoli. “Over the coming months, the MTA will have to work closely with its funding partners to close the $15 billion gap in its capital program. Additional borrowing could increase pressure on fares and tolls, and while the MTA should look for opportunities for savings, deep cuts could affect the future reliability of the transit system and jeopardize expansion projects.”
Rising tax revenues and increased ridership on subways, Long Island Rail Road and Metro-North have improved the MTA’s financial outlook. Additionally, the MTA is making progress toward its goal of finding $1.5 billion in recurring annual savings by 2017. MTA’s outstanding debt is already projected to reach $39 billion by 2018 —more than double the amount in 2003 —even before taking into account any new borrowing for the proposed capital program.
Labor agreements will begin to expire in 2016, and health insurance and debt service costs are growing faster than revenues.
The authority’s most immediate challenge is funding its next capital program without putting the financial burden on riders.