New York Comptroller Thomas DiNapoli revealed in a report Wednesday what most everybody already knows — the MTA is broke, and its financial future is worrisome.
DiNapoli said the cash-strapped agency’s heavy reliance on borrowing would cost $3.3 billion in debt service fees by 2018.
"My analysis shows that the magnitude of this borrowing plan will have serious implications for the operating budget in the coming years,” DiNapoli said in a statement. “Before taking on nearly $15 billion in new debt, the MTA must present the public with the facts about the potential long-term implications of this new borrowing on services, fares and budget gaps."
The transit agency’s proposed budget also assumes the MTA can negotiate new contracts with transit unions that don’t include increases and continue to cut costs, DiNapoli added, though he did not offer any suggestions for how the agency could better balance its books. The task will be left to whoever succeeds chairman Jay Walder when he resigns for another job next month.
Gene Russianoff of the Straphangers Campaign said he worries the MTA may have to again cut service and raise fares. The agency has already announced intended biannual fare hikes through 2017.
“The MTA says it has no choice. It's either borrow the money and risk high fares or service cuts to pay the bonds back. Or have repairs drastically cut back in a year that the agency believes no major new help can be expected from City Hall, Albany or Washington,” Russianoff said. “It's an ugly choice.”
In the budget it proposed in July, the MTA already acknowledged there were “significant risks.”
“The Comptroller today reaffirmed the financial risks identified by the MTA and the importance of continuing to achieve cost reductions across the organization,” MTA spokesman Kevin Ortiz said in an email yesterday. “A proposed funding plan for the Capital Program taps existing funds to cover increased debt service without stressing the MTA’s operating budget.”
Follow reporter Marc Beja on Twitter: @marc_beja