MTA faces lost programs, deferred maintenance sans congestion pricing

Pausing congestion pricing could also be much more destructive than the Latest York Metropolitan Transportation Authority predicted, in response to a presentation at its board meeting last week. 

The agency cannot afford to cover all basic maintenance, and must shelve any recent upgrades or expansions until it finds $16.5 billion in revenue, the presentation said.

The system of tolls on vehicles entering Manhattan’s Central Business District was set to take effect on June 30, but was abruptly canceled by Latest York Gov. Kathy Hochul at first of the month. 

The 96th Street station will probably be the northern end of Latest York’s Second Ave. Subway for longer than expected. An extension to Harlem is halted due to the halt on congestion pricing tolls.

Metropolitan Transportation Authority/Patrick Cashin

The MTA is required by state law to implement congestion pricing, and has accomplished every legal step to achieve this, in response to a staff report prepared for the Wednesday’s meeting, but cannot proceed until Hochul’s state Department of Transportation signs the Federal Highway Authority’s final approval for the toll system. 

Within the meantime, the board voted to halt congestion pricing but keep the system ready for at any time when the tolls can begin.

In Hochul’s initial June 5 announcement, she said she was directing the MTA to temporarily pause the implementation. Many board members’ remarks — including CEO Janno Lieber on many occasions — suggested they oppose pausing this system, but don’t have any legal option to proceed.

All but one board member voted for Wednesday’s resolution, which authorizes the president of the MTA to “take such steps as could also be crucial or desirable to implement the CBDTP until after such time because the required final agreement [with the Federal Highway Authority] has been executed.”

With no plan to interchange the revenue, the MTA has been thrown into turmoil as staff calculates changes to its capital plan and operations and drafts the upcoming 2025-2029 capital plan.

The tolls would have generated $1 billion per yr, and the MTA would have used that $1 billion to issue $15 billion of bonds — almost a 3rd of its $55.5 billion capital program, and almost two thirds of the rest of this system. 

But accounting for other costs and grants that will probably be put in jeopardy, the hit to the 2020-2024 capital program is definitely closer to $16.5 billion, in response to the presentation from Deputy Chief Development Officer Tim Mulligan.

So the MTA is left with $12 billion to finish the $28.5 billion of projects left on its capital program.

Around two-thirds of the remaining capital program was alleged to be “state of fine repair” projects, maintaining the protection and efficiency of the system. Those projects will probably be on the forefront of the pared-back capital plan, but a few of them will even get shelved. 

Most expansions and upgrades will probably be “deferred” until the MTA has the crucial funding. Those projects include the Second Avenue Subway extension into Harlem (projected to cost $5 billion), elevators allowing disabled people to make use of 23 stations ($2 billion), upgrades to infrastructure and technology ($1.5 billion), and 250 zero-emission buses ($500 million). 

The agency will even delay $3 billion of state of fine repair projects, a $3 billion project to interchange Nineteen Thirties-era signals on the AC and BDFM lines, and $1.5 billion of upgrades to the system’s oldest subway and train cars. 

Hochul released a press release after the board meeting that said her office would work with the MTA to fund the rest of the capital plan, but didn’t provide any specifics. 

“While the timing of the following budget may necessitate temporary adjustments to the timeline of certain contracts, there isn’t a reason for Latest Yorkers to be concerned that any planned projects won’t be delivered,” Hochul’s statement said. 

However the agency plans to cancel some projects that it already awarded contracts for, in response to the presentation, including elevators for 2 stations and upgrades for train yards. And if these projects are delayed long enough, they could be included within the upcoming 2025-2029 capital program, displacing other repairs. 

Even the delays, many board members noted, can have downstream effects. If the agency doesn’t replace old cars, trains will break down more often. That may make service less reliable, which can deter riders, which can create a drop in farebox revenue. The upgrades to signals, train yards and certain structural repairs would even have increased reliability, so shelving them could forfeit future revenue.

Other projects could cause problems in the event that they’re delayed for too long. Lieber identified that America has a supply shortage of buses, and if the MTA waits too long to purchase them, it could lose its place in keeping with the manufacturer. 

Some infrastructure projects, just like the Verrazzano-Narrows Bridge ramp reconstruction and a important cable dehumidification system to preserve the strength of the cables that delay the longest suspension bridge within the Western Hemisphere, are designed to forestall the decay of the infrastructure
; the longer that project is delayed, the more the 50-year-old bridge’s infrastructure becomes vulnerable to deterioration.

The federal government has agreed to supply $2 billion for the Second Avenue Subway extension. If the agency delays work on the project for too long, it could lose that grant.

And nobody — except Hochul, perhaps — knows how long the MTA will probably be waiting for funding.

Within the governor’s original announcement, she said congestion pricing can be “temporarily paused,” but she’s given no indication when she might lift that pause. 

Many members of the MTA, including Lieber, appeared to hope they’ll be waiting a matter of months, but acknowledged that it may very well be years. If Hochul’s pause was politically motivated, as critics have alleged, the MTA might just be waiting for the election to pass in November. 

But Hochul has been pushing for a recent source of funding altogether. She tried to get the state legislature to pass another source of $1 billion annually for the MTA after blocking congestion pricing, nevertheless it went nowhere and the legislature adjourned for the yr. 

Many alternatives are unattractive. Hochul’s suggestion for a payroll mobility hike is just not going over well with the Latest York City residents and businesses who would pay, including the city-appointed members of the board; they argued they shouldn’t should pay more to fund the subway, because it’s an economic engine for the remaining of Latest York and surrounding states. And a recent increase that will follow briefly order a 2023 hike of the identical tax.

Lieber said in a press conference after Wednesday’s meeting that he believes Hochul. In spite of everything, Hochul and the state legislature found alternate sources of funding for the MTA when it had funding shortfalls during and after the pandemic. 

“We’re expecting that there will probably be an answer to the $15 billion,” Lieber said at a press conference after the meeting. “The governor, within the statement… did say she’s going to do it, and I said I take her at her word.”

The meeting had 140 public speakers, including Latest York City Comptroller Brad Lander, who sharply criticized the governor for halting the tolls, and lots of members of the state legislature.

Although the board, largely appointed by Hochul, voted to delay the implementation, members stressed repeatedly that that they had voted again and again for congestion pricing and expressed dismay on the projects which have been tabled. 

“I need to make it clear that a ‘yes’ vote on this resolution is just not an endorsement of the congestion pricing pause, but relatively a confirmation that the MTA is eagerly awaiting to implement this system as soon because the tolling contract is signed by all parties involved,” board member Blanca López said. 

Board member Norman Brown described the pause as “political interference” that will have “catastrophic” consequences for the MTA’s operations and Latest Yorkers’ jobs. 

The MTA won one in all the eight federal lawsuits that might have prevented congestion pricing on June 21.

“We appreciate the thorough evaluation of the environmental review by Hon. Judge Lewis Liman, and his acknowledgment of the great analyses and public process that led to the federal government’s Finding of No Significant Impact for the Central Business District Tolling program,” the MTA’s general counsel Paige Graves said in a press release. “We stand able to relieve congestion and improve transit service for hundreds of thousands of riders.”

Moreover, several parties, including Lander, have threatened to sue Hochul over stopping congestion pricing, on the premise of 5 different state and federal laws. 

Meanwhile, the MTA plans to issue $800 million in July to refinance various debt, including a few of its Construct America Bonds. 

The lack of congestion pricing revenues has not modified the agency’s bond rankings: its transportation revenue credit is rated A3 with a positive outlook by Moody’s Rankings, A-minus with a positive outlook by S&P Global Rankings, AA by Fitch Rankings and AA with a stable outlook by Kroll Bond Rating Agency. 

In next month’s meeting, the board will study how the lost congestion pricing revenue will impact operations and debt service. That meeting will even include the following capital plan, which it appears the agency can have to jot down without knowing when, if ever, it’s going to implement the congestion pricing tolls or get one other billion-dollar revenue source. 

The present capital plan has been very delayed, first by the pandemic after which by the uncertainty around congestion pricing. 

The capital plan is alleged to end this yr, yet the MTA has committed only $32.5 billion to projects out of its $55.5 billion program. The agency has $12 billion for crucial upgrades, but a presentation at this month’s capital plan committee meeting revealed that the agency only intends to commit $2.9 billion to contracts this yr — it does project that it’s going to overshoot that budget, though, and commit $3.3 billion. 

In a report last month — before congestion pricing was canceled — Latest York State Comptroller Thomas DiNapoli projected that the 2020-2024 capital plan would take greater than seven years to finish.

“The slower the pace of commitments, the greater potential for capital disinvestment to occur, allowing assets to deteriorate,” the comptroller wrote.

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