How the MTA will come up with $51 billion to pay for the next 2020 – 2024 Five Year Capital Plan is far from certain. A significant portion is dependent upon a number of taxes and fees including Real Estate Transfer and Internet Sales Tax along with Congestion Price Tolling which combined equal $25 billion plus $10.7 billion in anticipated Federal Transit Administration funding. There is no guarantee of FTA providing between $3 to $3.5 billion in New Starts funding for Second Avenue Subway Phase 2 which may cost up to $7 billion. Second Avenue Subway Phase 2 is competing against the $12 billion Gateway Tunnel project which is also looking for $6 billion from the same federal funding source. Both desire FTA to issue Full Funding Grant Agreements in 2020 to secure funding from Washington which will never happen.
Funding both the same year would leave nothing for many other proposed New Starts projects around the nation. Congestion Pricing does not kick in until January 2021 or the second year of a five year capital program. The final details of who will pay and how the collection system will be installed have yet to be worked out.
Elected officials continue lobbying behind the scene for exemptions some of which may be adopted to placate different constituencies.
The MTA may not be able to count on all $15 billion in congestion pricing funding. A downturn in the economy could result in less revenue from the Real Estate Transfer (look at the glut in unsold Manhattan high rise luxury apartments), Internet Sales (how will this be collected and many people will evade this by having friends and neighbors out of state purchase items for them) and other tax income sources.
Is it realistic to expect Albany to provide $3 billion in new direct aid given the state still owes $7.3 billion in support for the current MTA for the 2015-2019 plan? The same is true for City Hall providing $3 billion who still owes $1.8 billion in support as well. The plan assumes the MTA will borrow another $10 billion in new debt. How much will this increase the MTA’s debt service payments? Even without including this new borrowing, the MTA forecasts that its debt will increase 31% by 2023 and will cost $3.5 billion or more annually. The MTA could easily end up with a shortfall in the billions.
Who knows if all the capital projects that would benefit Bronx commuters will actually end up being funded.