On Sept. 12, state Comptroller Tom DiNapoli released a report assessing the MTA’s “capital needs and funding scenarios.”
Its findings should surprise no one. To enact the overwhelming list of capital improvement needs, the report concludes “The MTA must find billions in new funds even as the state tries to resolve the $15 billion gap in revenues created by the pause on congestion pricing.”
Essential capital projects include:
- $1.78 billion for repairs of line structures, depots and yards.
- $2.75 billion for normal replacement of railcars and buses.
- $5.65 billion for accessibility and signal modernization.
- $5.23 billion for the expansion of the Second Avenue subway.
- $5.67 billion for administrative, communication and power modernization.
The MTA’s total capital needs during the next five years range “from $57.8 billion to $93.2 billion, with a midpoint of about $75 billion. But whether the MTA’s capital program comes in at the low end or the high end of that estimate, it will need significant amounts of new funding….”
So how is the MTA going to fund the much-needed capital projects?
First of all, taxpayers should not rule out the resurrection of congestion pricing.
Gov, Kathy Hochul’s surprise announcement in June to suspend the congestion pricing that was slated to commence on July 1 was a political decision — not a financial one.
Hochul’s June 5 statement that “I cannot add another burden to working, middle-class New Yorkers or create another obstacle to our continued economic recovery” was empty political rhetoric. She did not want to be blamed for voter backlash against Democratic congressional candidates at the polls in November.
However, it appears she has been scheming to bring back congestion pricing post-election day.
The New York Post reported Aug. 18 that “Governor Hochul is considering proposing a lower congestion toll for Manhattan and nixing it all together for municipal workers such as cops and teachers.”
In other words, Hochul has bought off the municipal unions that had been suing the MTA—cops, firemen, teachers, ambulance crews—who commute to their workplaces in the zone south of 50th Street in Manhattan.
And I won’t be surprised if there are additional exemptions, for example, medical professionals.
But tax revenues from the modified congestion pricing will not be enough to fund MTA capital projects.
The DiNapoli report suggests that fare and toll increases over the next five years could be between 13% and 18%. It also points out that more state and city tax dollars will have to be turned over to the MTA. The state’s contribution for the 2025-2029 Capital Plan is estimated in the range of $8.8 billion to $29 billion. The city’s contribution could range from $2 billion to $4 billion.
But before raising fares and tolls, maybe the MTA should address the direct causes of its soaring costs: overly generous union contracts that cost $7.8 billion annually, huge cost overruns, prevailing wage laws that force MTA contractors to pay above market rates to the tune of $95 per hour, and fare beaters.
The MTA recently admitted that last year it lost $600 million to fare evasion. (The comptroller puts it at $700 million.) More than 48% of bus passengers do not pay their fares—up from 18% in 2018. Nearly 1 million commuters a day get a free ride.
This is even too much for The New York Times. Pamela Paul wrote in her Sept. 6 Times column, “Taking the City for a Ride:” “The truth is passengers don’t pay because they can get away with it. The hottest truth is that the city lets them.” Pamela concluded: “The best resolution is more policing.” (For The Times to call for more policing is an incredible acknowledgement.)
If the MTA cracked down on fare beaters, the increased revenue would contribute significantly to salvaging the MTA Capital funding problem.
But will that happen? I doubt it. It is easier to stick fare-paying working class commuters with the tab for the MTA’s incompetence.