In the face of pending vetoes, the Metropolitan Transportation Authority last Thursday withdrew bond resolutions it had put before the MTA Capital Program Review Board.The bonds in question represent the MTA’s $14 billion debt refinancing plan (MTR #’s 264, 266).

The review board represents Governor Pataki, Mayor Giuliani, and the Assembly and Senate.

The MTA bond resolution faced an unprecedented triple veto, due to concerns and complaints by New York City, the Assembly and the Senate.

According to the Bond Buyer, NYC was prepared to object to the “commingling” of commuter rail and NYC bonds. The refinancing plan consolidates 13 credits into four, mixing city transit and commuter rail funds. Advocates have pointed out that the MTA’s 5-year plan shifts spending in favor of the suburbs, and worry that blurring city and suburban debt may herald further shifts toward the suburbs.

The Assembly says it is concerned about the MTA program’s overall financing, and whether heavy borrowing should proceed with gaps remaining in the capital budget. The Legislature approved the debt refinancing last year, but the failure of NY’s transportation bond act last fall created a $1.6 billion MTA budget hole. The Assembly has also been the prime recipient of calls for help by groups incensed over issues like the severing of the G line and the disruption of Chinatown subway service.

The Senate appears to be using the approval as leverage to get state budget talks moving in Albany.

At the moment, the consequence of delay is not that funding for ongoing projects will dry up. Instead, it seems more in the problem that the MTA could miss favorable bond market conditions, and thus the opportunity to close up to $1 billion of its capital budget gap. California is apparently preparing a huge set of utility restructuring bonds for issue in the early fall.  Some sources believe that if the MTA is unable to get its bonds out before the California issue, the market for its debt will be significantly worse.

NY Legislature Proposes $17.1 Billion Highway Plan, Mountain of MTA Debt - April 7, 2000

MTA OK's Big Debt Plan  -  April 21, 2000

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