Friday, December 26, 2014

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MTA Board Reconsiders Billions Spent On Capital Budget

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TWC News: MTA Board Reconsiders Billions Spent On Capital Budget
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Some of the Metropolitan Transportation Authority's own board members are calling for a closer look at the big subway and train projects the agency has underway during tight fiscal times. NY1's Transit reporter John Mancini filed the following report.

Reeling from repeated fare hikes and service cuts and rocked by new increases coming in January, riders wonder how the Metropolitan Transportation Authority can afford the $30 billion debt for big capital projects like the Second Avenue subway.

Now, with no replacement for state aid that was once guaranteed, they are not alone in raising the question.

"Everybody’s talked about it. Every time we spend money on this capital plan, we’re increasing the debt, increasing the debt service, and this is like a time bomb here," said MTA Vice Chairman Andrew Saul.

"We’re paying interest during the construction periods of projects in part from the fare box, so we are paying for capital with the fare box," said MTA Board member Doreen Frasca. "That means that less money is dropping down to pay maintenance expenses. We’ve cut 20 percent out of many of the agency budgets. We certainly haven’t cut the capital budget by 20 percent."

To be sure, Washington, D.C. provides capital help, like 91 percent of the cost of the $3.2 billion Fulton Street hub. Also, the city is paying for the 7 subway line extension.

In a statement, the MTA defended three decades of borrowing by saying, "A series of five-year capital programs have revitalized our transit system.... While the more than $64 billion spent in that time has helped turn around our regional economy, maintaining and improving the 100-year-old transportation system is an ongoing need and we cannot afford to disinvest. The current $26.3 billion program reflects a nearly $2 billion reduction as the result of a comprehensive review of projects."

The newly-expressed worries came as equipment problems have slowed tunneling under Second Avenue to just 14 feet a day. Another massive undertaking, the Long Island Rail Road’s new East Side connection to Grand Central, is moving more swiftly toward completion.

“Very different arrangement. They are running the muck all the way into Queens. I wish we had that ability," said President Michael Horodniceanu of the MTA Capital Construction Company.

Amid the current crisis, it is still unclear where the MTA can avoid further financial trouble with its borrowed billions and not dig even deeper into riders’ pockets. ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP