The Metropolitan Transportation Authority had been enjoying a rare period of prosperity before Gov. Kathy Hochul’s decision in June to suspend a congestion pricing program.
Credit...Lila Barth for The New York Times

M.T.A.’s Financial Needs Grow With Congestion Pricing in Purgatory

Transit leaders proposed a plan on Wednesday to spend more than $65 billion to upgrade New York City’s subway and bus system. Whether they will be able to fully fund it is unclear.

by · NY Times

Transit leaders on Wednesday released an ambitious five-year plan to upgrade New York City’s subway and bus network, unveiling a $65 billion wish list of projects that includes buying new subway cars, fixing century-old tunnels and installing new elevators.

But the Metropolitan Transportation Authority, the state agency that runs the city’s mass transit network, only has about half of the money it needs to pay for those repairs. It was the first spending plan released by the authority since Gov. Kathy Hochul halted a congestion pricing program in June that had been set to begin later that month, and the largely unfunded plan puts the authority in an even more precarious financial position.

The congestion pricing program, which would have tolled most drivers entering the busiest parts of Manhattan, had been projected to raise $15 billion for the authority. Ms. Hochul has pledged to make up the shortfall but it is not clear how she plans to do so.

The authority had been enjoying a rare period of prosperity before Ms. Hochul’s decision to suspend congestion pricing. For the first time in decades, it had as much money as it needed, even while transit agencies around the country had struggled to recoup pandemic-related losses. But now that the authority’s projected windfall has evaporated, at least temporarily, it is back in the familiar position of needing to compete with other state interests to fill its coffers.

The authority’s goals and upgrades were detailed in its latest capital plan, which covers the period from 2025 through 2029. Released every five years, it is the transit system’s most granular analysis of future maintenance needs and potential expansion projects.

About half of the $65 billion has already been funded through bonds, federal grants and direct appropriations from the city and state, leaving the rest in limbo. Because the authority is controlled by the state, the remaining funds would most likely have to come from Albany.

Janno Lieber, the authority’s chairman, said the report sought to be as comprehensive as possible in hopes of persuading lawmakers that the agency needed the rest of the money to pay for crucial repairs.

Ms. Hochul has said that she plans to replace the revenue that congestion pricing would have generated, but she has declined to offer specifics. The State Legislature failed to cover the funding gap in the wake of Ms. Hochul’s decision earlier this year.

Mr. Lieber said in an interview on Tuesday that he was taking the governor at her word.

“The governor has been absolutely clear that she intends to address that,” Mr. Lieber said. “I think there’s cause for optimism.”

Transit advocates have been less hopeful, and they expressed skepticism on Wednesday that Ms. Hochul would plug the hole.

“There is no Plan B — there has never been a Plan B,” said Lisa Daglian, the executive director of the authority’s Permanent Citizens Advisory Committee, a watchdog group. “There are no conversations with the Legislature. There are no conversations with elected officials. There are no conversations with the advocacy community.”

She added: “There is nothing but a promise.”

In a statement, Ms. Hochul noted that she found the money last year to save the authority from billions of dollars in deficits to its operating budget that had been caused largely by the coronavirus pandemic. She said she would pressure federal lawmakers to provide more funding and work with state and city officials to cover the authority’s needs.

“From the moment I took office, I’ve fought for public transit,” Ms. Hochul said. “We will review the M.T.A.’s proposal for the upcoming five-year capital plan and fight to secure as much funding as possible.”

Without the funding generated directly by congestion pricing, and the billions in federal funding that depended on the toll money coming in, the authority faces a budget crisis.

Authority staff members have identified $16.5 billion in sweeping cuts that have to be made to its current capital plan, which runs from 2020 through 2024 and includes projects that would have made long-deferred improvements, such as upgrading 1930s-era signals that often cause delays. The shelved projects also included plans to make subway stations more accessible to riders with disabilities and an expansion of the Second Avenue subway line.

The authority’s capital needs are vast, largely because public officials deferred repairs and diverted money from the transit network for decades.

The subway system, which is more than a century old, was also not built to withstand climate change. It is prone to failures during the summer months, when high temperatures can warp tracks and storms can flood tunnels. As the system has aged, the planet has become hotter and more humid, creating more intense weather patterns that deteriorate its infrastructure. Its limits were tested seven years ago, when a series of subway failures during a stretch of 2017 came to be known as the Summer of Hell.

“How much and where to get the funds for the M.T.A.’s needed massive capital investment will be one of the most important and challenging decisions Albany will have to make in the next year,” said Andrew Rein, the president of the Citizens Budget Commission, which released a report this month about the authority’s needs.

The state comptroller, Thomas P. DiNapoli, issued a similar report that said the state must plug the $15 billion hole in the current capital plan created by the suspension of congestion pricing before it sought to resolve the funding gap for the next one.

The plan released on Wednesday called for purchasing 2,000 new rail cars in order to reduce delays and installing at least 75 miles of modern signals to keep trains running. It also called for construction to begin on the Interborough Express, a train line that would connect Brooklyn and Queens and could cut travel times by up to 30 minutes for more than 900,000 New Yorkers.

Rachael Fauss, the senior policy adviser for Reinvent Albany, a watchdog group, said the large size of the capital plan reflected the backlog of projects that must be carried out to keep the transit network running. Halting congestion pricing only added to that backlog, she said.

“Governor Hochul’s derailment of congestion pricing severely sabotages both the current M.T.A. capital plan and the massive 2025-2029 plan announced today,” Ms. Fauss said in a statement.

That is why Ms. Hochul must act now to stop any further damage to the authority’s finances, said Kate Slevin, the executive vice president of the Regional Plan Association, an urban planning nonprofit.

“The longer we wait, the harder it’s going to be to make up the deficit that’s being created,” Ms. Slevin said. “We already know we lost the next phase of the Second Avenue subway with the pause of congestion pricing. We know we’ve lost advancement of accessibility at numerous stations across the system, and it’s just going to get worse and worse if we can’t figure out a way to invest.”

The authority’s board will vote on the report when it meets next week. The agency must then submit a final version by Oct. 1 to the Capital Program Review Board, a panel that includes the mayor, the governor and state legislative leaders or their designees.

Congestion Pricing in New York City