Viable big-projects plan at MTA

Jay Walder will leave his post as head of the Metropolitan Transportation Authority in October after two years. As his tenure ends he has outlined a vision of how the agency can meet its capital funding needs for the next few years in these challenging economic times.

It's a workable blueprint that, with enough cooperation and support from New York State's politicians, can probably address most of the problems the chairman and chief executive will leave behind when he moves to Hong Kong to head that city's privately held transit system.

The fact that about $9 billion of the MTA's capital budget is unfunded threatens the future of effective public transit in the New York region. The five-year plan encompasses, along with smaller projects, the 7 train extension, East Side Access for the Long Island Rail Road, and the Second Avenue subway. The first two years of the plan were provided for, but the last three weren't, and the funding well runs dry on Dec. 31. The plan to garner the $9 billion has three main components:

Increasing efficiency and cutting costs. Walder says that by bringing the same type of discipline to the capital budget that was deployed on MTA operations under his tenure -- consolidating information-technology functions and cutting redundant positions, slashing administrative costs and creating effective partnerships with unions -- $2 billion can be cut from the plan. The MTA also intends to sell its Madison Avenue headquarters, and thanks to staff cuts, will not need to replace the space.

Capturing $2 billion in extremely long-term, low-interest loans from the federal government's Railroad Rehabilitation program. While the $35 billion fund has never been tapped for such large projects, the MTA does meet all the requirements to get the money. It's not a slam dunk, though, and help from the state's congressional delegation, Sen. Charles Schumer in particular, will be crucial.

Refinancing. The MTA will retire $6.2 billion in debt over the next eight years, and Walder suggests using that freed-up borrowing capacity. His plan calls for bonding out about $5 billion. The debt would be serviced by a fund that has been putting aside hundreds of millions of dollars in rainy-day money, a tough luxury to justify right now. But getting Walder's borrowing and repayment method approved will require the support of politicians in Albany.

That's not all. For the MTA to get healthy, it must succeed in inking no-raise deals with its labor unions, much like those that Gov. Andrew M. Cuomo got the leaders of the state's biggest public unions to agree to this year. In addition, all the dedicated taxes meant for the MTA must actually flow to the authority -- an iffy proposition, considering that Albany redirected $100 million in 2010 and $143 million in 2009 that was earmarked for the authority. The state has to support the MTA if it wants help from the federal government, and that means the embattled payroll tax can't be eliminated unless another way to raise that money is found.

Walder will leave behind a clear and plausible financial path. The next head of the MTA and elected officials will have to work together to bring that plan to fruition.