The general obligation bond act the NY State Legislature is considering to bolster Governor Pataki’s plan for the Metropolitan Transportation Authority’s 2005-2009 capital program will increase the overall transit budget, but not by nearly enough to meet the needs outlined by the MTA, regional planners, transit advocates and the elected officials who have supported transit system expansion for the past half-decade.

If adding $1.6 billion to the governor’s $19.2 billion MTA capital program proposal (see MTR #487) is all that is going to happen regarding transit funding in Albany, the state’s leaders will need to admit they are not going to see the Long Island Railroad connected to Grand Central or a new Second Avenue subway line anytime soon.

The bond measure, according to the NY Times, would provide $1.6 billion for the MTA and another $1.3 billion for the state department of transportation. As a general borrowing measure, backed by NY State rather than MTA revenues, it would have to be approved by voters in November.

The NY State Senate has also recently proposed an tax surcharge on unincorporated businesses as an alternative to Governor Pataki’s proposal to levy higher DMV fees to help fund transportation, but reports have been unclear as to whether the Senate’s plan would raise any more money than the governor proposes.

If the governor’s proposed program comes to pass, and the bond act is approved, it would give the MTA a five year program of $20.8 billion. $2 billion of that would be new New York City money for the extension of the #7 subway line to the West Side of midtown Manhattan. That project’s financing plan also remains in doubt.

The remaining $18.8 billion compares to an original 2000-2004 program of $17.4 billion (that program was later amended and increased, primarily with funds for rebuilding lower Manhattan after Sept. 11, 2001). In today’s dollars, the $17.4 billion program would be worth $19.27 billion, so the MTA would face an actual 2.4% loss in purchasing power at a time it was expected to begin the system’s first major expansion projects in several generations. Without the bond money, Governor Pataki’s proposal would represent a 10.7% real drop in MTA capital spending (spending on the #7 subway project aside).

The MTA’s proposal for the 2005-2009 program was for $27.8 billion, including the $2 billion #7 extension. It would have put the agency on track to complete the LIRR-Grand Central connection by 2012 and make a strong start on the first phase of the Second Avenue line. Spending on those two projects would cost $7.4 billion, while core spending for repair, modernization and improvement of the existing system would be $17.2 billion.

With $18.8 billion, the MTA could pay for its entire core program and the half-billion in security investments it says it requires. But it will not be able to take either of its big expansion projects very far with the remainder. If it pushes more of the total into one of these projects, the project will still likely be well off of its stated timetable, and the agency will risk declining conditions in the existing transit system. However, it should also be noted that the governor’s budget did not identify all of the funding sources needed to make up his capital program proposal, so the bond act could in fact simply be gap-filler in an even smaller overall pie.

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