Future generations of transit riders should beware the MTA’s debt-backed plan to support its capital construction program. As a September report from NY State Comptroller Tom DiNapoli makes clear, the plan will increase the strain on the agency and make it all but impossible to avoid steep fare increases in future years.

Given little appetite for new revenues from the state, the MTA opted in July to rely on new bonds and seek a federal loan. As DiNapoli’s office writes:

The MTA has… proposed borrowing $14.8 billion—the largest amount in its history. Such a heavy reliance on debt would further stress the operating budget. Debt service would reach $3.3 billion annually by 2018, or 64 percent more than in 2011, and would remain at that level through 2031. These estimates do not even consider the cost of the next capital program, which begins in 2015. […]

To balance the operating budget and to help fund the capital program, the MTA has undertaken an aggressive program to reduce costs. These cost-cutting efforts, however, are unlikely to be sufficient. Even if the MTA raises fares and tolls by 7.5 percent in 2013 and 2015 as it already plans, and raises them by the same amount in 2017, it could still face budget gaps that would grow from $600 million in 2016 to $1.2 billion by 2018.

By 2018, debt service will cost the agency over $3 billion every year, and more than 20 cents of every dollar in the operating budget will go towards debt.

This is bad enough, but in many ways it’s an optimistic scenario because it assumes all will go according to the MTA’s plan. But that plan is balanced only with the help of a series of assumptions. These include: That large cuts won’t be made to federal transportation funding, that New York City will increase its funding of the MTA, and that New York State won’t repeal or cut the payroll mobility tax.  the agency’s financial state could worsen and the capital program could end up only partially funded.