New York MTA Outlines $16.5B in Capital Funding Cuts Due to Delay of Congestion Pricing

The monthly meeting of the Board of Directors of the New York Metropolitan Transportation Administration on June 26 was historic in several ways. After a morning of what seemed like rec0rd-setting public input, the board was briefed on historic cuts to the MTA’s capital program that are currently being made, and then the board voted, 10 to 1, in favor of a resolution that, in some ways, actually stands up to the governor who appointed many of them and whose decision it was to cause the capital program cuts. (Video of the meeting is here.)

As ETW has covered, when Governor Kathy Hochul on June 5 indefinitely postponed the scheduled June 30 start date for the lower Manhattan congestion pricing (CP) plan, she wasn’t just taking $1 billion per year in projected revenues from the CP tolls. Because the MTA had plans to use the next several decades of CP revenue to issue $15 billion in bonds this year and put all that money towards capital funding this year (the fifth and final year of the 2020-2024 capital plan), the indefinite postponement of CP was a $15 billion right now problem, not a $1 billion right now problem. (We have yet to hear a good answer as to whether Hochul and her staff just didn’t know the difference, or knew and didn’t care.)

After the extensive public input, the heads of the MTA capital division gave a presentation on the impacts of the congestion pricing pause. They explained that it wasn’t just the $15 billion in CP-backed bond proceeds that have now vanished. Since the MTA now doesn’t have the money to do any expansion activity, they are indefinitely stopping work on the Second Avenue Subway extension, saving $3 billion in MTA money. But since that project is a partnership with the Federal Transit Administration, saving that money also costs the MTA $2 billion in future federal appropriations yet to be made for the project, bringing the total revenue hole to $17 billion. They then added another $0.5 billion in “congestino pricing support revenue” that will no longer materialize, which brought the total to $17.5 billion, then knocked off $1 billion for new federal Penn Station funding that had come in since the last capital plan update (Amendment 3), for a net savings of $16.5 billion needed due to the Governor’s actions.

MTA staff have decided to spare state-of-good-repair capital projects necessary for safety and for functional operations from any cuts. Some SOGR projects that could affect reliability and efficiency will be judged on a case-by-case basis. But everything that resembles new capacity or any other changes that are not required by law are being indefinitely postponed.

  • Second Avenue Subway Phase 2 is officially deferred. (Saves $5 billion, $3 MTA and $2 federal.)
  • Apparently, the court settlement that is forcing Americans with Disabilities Act upgrades across many MTA stations had some kind of force majeure/doomsday clause that allows postponement when revenues collapse, so ADA upgrades to 23 stations are postponed, and upgrades at 2 more may be permanently canceled. (Saves $2 billion.)
  • No more purchasing of zero-emission buses or building zero-emission bus charging infrastructure. (Saves $0.5 billion.)
  • Postpone Verrazano Narrows Bridge ramp reconstruction and other upgrades (Saves $1.5 billion)
  • Postpone new rolling stock purchases for the subway and LIRR/Metro North, and postpone new natural gas bus purchases. (Saves $1.5 billion.)
  • Postpone the upgrade of the 90-year-old signaling system on the Fulton Line and the 6th Avenue Line. (Saves $2 billion.)
  • Save $3 billion in lower-priority state of good repair projects, both public-facing and behind the scenes.

Following that briefing, the board voted, 10 to 1, in favor of a resolution on the issue that stands behind implementation of CP whenever the governor permits (or is overruled). (The text is here in the board book on page 6 of 61.) The resolution notes that the CP plan stems from a law that is still in effect, and that the board voted months ago in favor of a resolution directing the MTA to implement CP “in or about June 2024.” The resolution also notes that the State has postponed implementation of CP.  The resolution then says:

RESOLVED that the Board recognizes that the CBDTP will not be implemented in June 2024, due to the pause in the program; and be it further,

RESOLVED, that the date of implementation of the CBDTP is hereby extended from in or about June 2024 until after such time as the execution of the legally-required tolling agreement among the Project Sponsors – New York State Department of Transportation, New York City Department of Transportation, and Triborough Bridge and Tunnel Authority – and also by the Federal Highway Administration; and be it further,

RESOLVED, that the President of the Authority or her designee is hereby fully authorized and directed to take such steps as may be necessary or desirable to implement the CBDTP until after such time as the required final agreement has been executed.

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