The loss of congestion pricing revenue will mean a bigger budget hole for the MTA, as the agency expends day-to-day operating funds to offset the $15 billion loss in big-ticket capital purchases, transit officials said Monday.
The loss of capital money — meant to cover large expenses like new train cars and facility repairs — is expected force the agency to borrow money against its day-to-day operating funds.
“The MTA was going to issue debt as the last piece of the funding for the $55 billion capital program,” MTA’s CFO Jai Patel told the agency’s finance committee Monday.
MTA officials had planned on issuing $15 billion in congestion bonds against an expected $1 billion in annual revenue from the toll.
Gov. Hochul’s indefinite pause on the plan will now require the MTA to turn to other bonding sources that use the agency’s operating budget — specifically farebox revenue or money from the state’s payroll tax — as collateral.
“With the pause on congestion pricing we would have to move up our own issuance of debt, and that would be an impact to the operating budget,” Patel said.
Meanwhile, the loss of congestion pricing could mean that farebox revenue will grow more slowly than predicted, Patel said.
“We anticipated about 1% to 1.25% of ridership increase from the movement of people from cars onto our public transportation,” she said.
As previously reported by the Daily News, the loss in capital funds will most likely mean delays in the purchase of new train cars for the subway system and the Long Island Rail Road. That, in turn, will mean more money spent on repairs, board members said Monday.
“The longer R46s and M3s remain in service, the more they’re going to cost to keep up,” board member Andrew Albert said, referencing obsolete cars on the A, C, N, Q and W lines and the LIRR.
“There is going to be a loss on the operating side — the maintenance, of course, is going to be extended,” said board member Marc Herbst.
“We’re going to have to pay more overtime to fix those machines, and equipment — everything; switches, rails, anything that’s needed,” he added.
The MTA is expected to release a bare-bones budget Wednesday, focused on keeping the system in a state of good repair.
As previously reported by The News, even if the MTA were to forego purchasing new subway cars, commuter rail locomotives and buses, the agency would still be $2 billion in the hole.
