City, state fall short on giving funds to MTA

By Philip Newman

Financial help from New York state and New York City for the financially strapped Metropolitan Transportation Authority has stayed at nearly the same level for 18 years, according to a report issued at a time when the MTA faces financial problems.

The Independent Budget Office, in its Aug. 14 report, also took issue with Mayor Michael Bloomberg on how much the city contributes to the transit system.

The IBO said that despite extensive press coverage of the MTA's financial distress, little had been reported about how much financial aid is provided by the government. The IBO said the MTA now gets far more money from fares, taxes and bridge and tunnel tolls than from government aid.

The IBO report was issued as the MTA struggles with perhaps as much as a $1 billion shortfall in 2009.

Although both Bloomberg and Gov. David Paterson have spoken out in opposition to the MTA's proposal to raise fares next year, both have also said they cannot afford to provide a financial rescue plan for the MTA.

Bloomberg has said it was up to the state to come up with more money.

The IBO report includes a graph showing that while dedicated taxes and bridge, tunnel, subway and bus tolls had risen steadily, financial aid from New York state and New York City had remained flat since 1990.

The IBO quoted the mayor as saying the city had already given the MTA “a substantial operating subsidy — $1.2 billion in fiscal year 2008.

“But that figure is considerably more than the nearly $858 million in 2008 subsidies projected in the MTA's July budget plan from all local and state sources, including Connecticut, which is expected to provide nearly $487 million for the MTA's Metro-North Railroad New Haven line as well as Nassau and six other counties,” the report said.

“The discrepancy between the mayor's estimate of city aid and the MTA's subsidy projections arises in part from differences over what constitutes a subsidy,” the IBO said.

“Funds flow from city and state coffers to the MTA for a number of purposes and in a variety of forms, sometimes under the rubric of 'operating assistance' and other times as 'reimbursement,' ” the IBO said.

“The mayor's higher estimate includes other sources as well, such as counting funds the city spends to repay the MTA for money it advanced to the city in the mid-1990s when New York City was struggling to close budget shortfalls,” the IBO said.

The IBO said “there has been no state aid for the MTA Capital Plan (which goes toward major expansion projects such as the Second Avenue subway and the East Side Access to bring Long Island Rail Road trains into Grand Central Terminal) since 1999.”

The many millions of dollars received from the federal government cannot go toward maintenance or other such purposes, but only for major expansion projects.

The MTA's financial problems result in part from the cooling of the real estate market, which provided the agency with proceeds from a variety of realty transactions as well as interest coming due from borrowing as much as $22 billion to build projects such as the Second Avenue subway and the East Side Access.

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