Report Shows Importance of MTA Capital Program to City, Region

At a time when inadequate state support has forced the MTA to rely on heavy borrowing to pay for capital improvements, a Permanent Citizens Advisory Committee (PCAC) to the MTA report has reminded readers of the importance of investment in the New York City metropolitan area’s transit system. By cataloging the many benefits of the MTA’s Capital Program, the report shows the pressing need for increased, sustainable funding that reduces the authority’s reliance on debt in a time of rising ridership and demands for system improvement.

Since the early 1980s, when faulty air conditioning systems forced the Long Island Rail Road (LIRR) to give conductors wedges as “standard equipment” for holding open car doors [pdf], Capital Program investment in the MTA system has yielded significant improvements. In 1982, for example, the first year of what PCAC calls the first “modern Capital Program,” the subway system’s cars had a mean distance between failure of 7,186 miles. In 2012, after decades of investment in rolling stock and other improvements, that figure is now over 170,000 miles. As Newsday’s Alfonso Castillo points out, the LIRR has also invested heavily in new rolling stock and track work, and it’s paid dividends for riders: mean distance between failure on the LIRR has gone up by 708% since 1982. Metro-North’s mean distance between failure went up by 502% over the same period.

Investment in the MTA system over the past three decades has directly correlated with a dramatic increase in ridership on subways, buses, and commuter rail. In fact, since the first modern MTA Capital Program, ridership has increased 66% on the subway system, 30% on buses, 14% on the LIRR, and 69% on Metro-North.

By PCAC’s accounting, the MTA Capital Program saw $116.7 billion in investment (in 2011 dollars) through 2011­­­­, and the report reminds readers that a significant portion of this investment has been financed through borrowing. The need for further investment in the system is clear: 1.6 billion people rode New York City’s subways in 2011, Metro-North had a strong year, and transit use is up nation-wide. The New York City metropolitan area’s transit system must grow with its needs, which means that capital investment (and funding) must keep pace. If they don’t, the system and its riders will suffer.

In light of the MTA’s $32 billion in long-term debt (and the $2.3 billion in annual debt service that accompanies it), PCAC rightly recognizes the need to identify new, sustainable sources of revenue and makes several financial recommendations. Among them are:

  • Other sources of direct subsidies must be found. Public‐private partnerships need to be pursued, such as value capture from new developments around train and subway stations.
  • A strong push needs to be made in Washington for more federal dollars to be available to the MTA in the next transportation funding reauthorization.
  • The dedicated tax fund must be protected for the exclusive use of the MTA.
  • New York City must give a larger sustained amount of financial support for the capital program.
  • While not part of the capital program, adequate maintenance, funded by the operating budget, has a direct impact on capital replacement: the better the maintenance, the more capital investment can be delayed. The anticipated 7.5 percent fare increase in 2013 is not expected to provide enough funding for operations. Further, MTA’s annual $2.3 billion debt service must come out of operations along with any Pay As You Go (PAYGO) funds. New York State and New York City should match the riders’ sacrifice and increase their direct funding of service operations by a similar amount.
  • The reality of the need to increase the state gas tax, implement tolling on the East River Bridges, and enact some form of congestion pricing must be faced. There are few new funding sources left to tap.
  • Related to the above recommendation is the gloomy outlook for the next capital program: sources for additional funds are nowhere in sight. Planning for the financial support of the 2015–2019 capital program must start now.

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