Report: Financial risks in MTA projects

The MTA's plan to borrow nearly $15 billion to pay for infrastructure projects through 2014 is loaded with "significant budget risks" that could hit transit riders hard, a state report released Wednesday said.

The report from State Comptroller Thomas DiNapoli said the Metropolitan Transportation Authority's plan to pay for the remainder of its current five-year capital plan by taking on $14.8 billion in new debt "will have serious implications" for the transit agency's operating budget in future years.

"The MTA is in a very difficult position as it struggles to hold together a strained operating budget while proposing the largest borrowing program in its history to fund capital projects," DiNapoli said in a statement.

The East Side Access project, which would bring the Long Island Rail Road to Grand Central Terminal, and the Second Avenue subway are among the major expenses in the current capital plan.

The comptroller's audit found that borrowing to pay for the MTA's capital costs would bring debt service costs to $3.3 billion by 2018 -- 64 percent more than what the agency is paying this year. Nearly 23 cents of every dollar that comes into the MTA would go to paying off debt by 2018, the report said.

Even with proposed fare hikes in 2013, 2015 and 2017, the MTA could face an operating budget gap of $1.2 billion by 2018, the report said.

MTA spokesman Jeremy Soffin said the report "reaffirmed" risks the MTA already identified and highlighted "the importance of continuing to achieve cost reductions across the organization."

SEE PHOTOSLIRR trains and commuters through the years

At a news conference Wednesday, Suffolk County Executive Steve Levy blamed the MTA's financial woes on wasteful spending. He urged the state to declare a "state of emergency" that would allow the MTA to make big changes in expensive union contracts.