Photographer: Gabriela Bhaskar / Bloomberg
Photographer: Gabriela Bhaskar / Bloomberg
New York The Metropolitan Transportation Authority is restarting its $ 51.5 billion capital plan and the loan to finance it as federal aid rescues the city’s bus and metro operator from the pandemic’s financial toll.
The MTA, the country’s largest public transport system, plans to sell securities backed by revenue it earns from Internet sales taxes and mansions to help finance its 2020-2024 capital plan, said Bob Foran, the agency’s chief financial officer, during a board meeting on Wednesday. The coronavirus outbreak put these financing plans on hold while the agency assessed the use of revenue for operational needs.
“The latest injection of federal aid allows us to unfreeze our historic capital program for 2020-2024,” said Pat Foye, executive director of the MTA, during the board meeting.
The MTA will receive combined federal aid of $ 14.5 billion, including about $ 6.5 billion in the latest rescue package, to cover lost revenue from falling passenger numbers. With that money, the MTA is no longer considering major service cuts and Dismisss in 2023 and 2024 and can instead restart major infrastructure projects, said Foye. This includes expanding the new Second Avenue subway, updating train signals, making stations accessible and increasing service to New York’s Pennsylvania Station.
“It is imperative that we continue to modernize the system so that, as soon as we overcome the current crisis, we are not in the situation we found in the 1970s and 1980s,” said Foye during the meeting, referring to a period in which passengers suffered on a dilapidated and broken subway network. “We remain committed to bringing our 117-year-old metro system into the 21st century and this new federal funding package will help us do that.”
The planned rate increases are still on hold and the board will discuss the delay in rate increases in the coming months, Foye told reporters after the meeting. The MTA raises tariffs and tolls every two years and still plans to increase bridge and tunnel crossing fees next month.
MTA, which had $ 48.2 billion in outstanding debt on March 2, predicts the sale of bonds this year with the backing of revenue from Internet sales taxes and mansion taxes, Foran said. These revenues were originally tied to providing $ 10 billion in financing for the multi-annual capital plan, he said.
“We will see what we can generate, but it should certainly be a significant amount of bond revenue this year, rather than having to wait until next year,” Foran said during the meeting.
The board also approved on Wednesday the sale of $ 1.3 billion in debt this year, which will be repaid with payroll mobility tax to finance capital projects.
Although the MTA borrowed $ 2.9 billion last year through the Federal Reserve Municipal Liquidity Facility to cover budget deficits in 2021 and 2022, the agency may not need to use these funds now that the MTA is receiving $ 6.5 billion in federal aid, Foran said. The agency will still maintain the $ 2.9 billion and repay the loan with those funds if the MTA does not need additional funds to cover budget gaps, he said.