MTA debt will take one-fifth of revenue by 2023, state comptroller warns
Mar 13, 2020
State Comptroller Tom DiNapoli believes the MTA is in rough shape financially considering a fifth of its revenue will be put toward debt repayment from now through 2023.
But the transit agency is not sweating the situation countering that the situation has improved in recent years and that the amount they owe is not only manageable, but their ratings are also in good shape.
“The MTA’s ambitious capital program promises significant improvements, but there are still too many unanswered questions,” DiNapoli said. “Heavy reliance on borrowing will also place additional pressure on the operating budget, which already faces risks. Unless the MTA can change the way it does business and reduce costs, for example, riders could be saddled with even higher fares and tolls than already planned.”
After an audit, DiNapoli said the outstanding debt owed by the MTA has more than tripled since 2000 from $11.4 billion to $35.4 billion. This is projected to grow by $52.6 billion by 2023, according to DiNapoli, meaning debt service will be about $4.2 billion by that same year.
“The volume of debt outstanding continues to be manageable, as ratings agencies have continued to reaffirm when appraising our debt portfolio,” MTA spokesman Aaron Donovan said. “Projected annual debt service payments have declined in recent years thanks to careful management of our debt portfolio.”
DiNapoli also took stock of the MTA’s 2020-2024 capital plan and questioned whether the organization can manage funds in the ballpark of $54.8 billion, especially considering the many of the funding sources are not yet in place such as congestion pricing.
The plan to toll vehicles entering Manhattan’s central business district has not gained federal approval so the question of if the MTA will get $15 billion needed for the capital plan has still not been locked down.
The issue of $3 billion from the city for the capital plan also fell into a precarious position on Monday as the agency officials cancelled a preliminary budget hearing with City Council Transportation Committee members who took a dim view of their absence. The MTA said coronavirus preparations took precedence over the hearing, but council members said they felt less inclined to approve the funding.
The financial obstacles to be dealt with in the next few years have not escaped the MTA with discussions of eliminating 2.700 employees being central to the February board meeting.
A reduction of about 1,900 positions is expected to occur in 2020 alone across all the bureaus that the MTA manages and discussion around the topic was a source of friction between board members and those representing the Transport Workers Union Local 100.
The majority of the layoffs would be through attrition, MTA officials said, and the agency is expected to be in the black by 2022.