An Assessment of the 2005-2009 Capital Needs of the Metropolitan Transportation Authority

The upcoming 2005-2009 capital program for the Metropolitan Transportation Authority (MTA) represents a pivotal period for the ambitious rebuilding agenda begun by the MTA in 1982.

The last two decades have witnessed a remarkable turnaround for the region’s network of subways, buses, and commuter rails. The system that was Exhibit A for a dysfunctional New York in the 1970s is now a leading symbol of its success in the 1990s and its resilience following September 11. Yet this very success may be the biggest impediment to implementing this and future capital programs. After investing $52 billion in 22 years, there is a danger of false complacency. This would be a grave mistake for the city and the region. Continued rebuilding is vital. A return to disinvestment will result in gradual erosion of this asset and a lost opportunity to support a changing, expanding economy.

The challenges facing the MTA and the region are daunting. We must:

• Continue the State-of-Good-Repair effort even as the MTA ramps up regular investments in normal replacement. Although many parts of the system, particularly in New York City’s subway network, are not projected to reach a state of good repair for several years, rolling stock, tracks and facilities still need to be replaced and upgraded on a regular basis. According to the MTA’s 2000-2019 Needs Assessment, normal replacement will increase from about 37 percent of the Transit Authority’s expenditures on existing facilities in 2000-2004 to 61 percent by 2010-2014.
• Build both a Second Avenue Subway and LIRR Grand Central connection (East Side Access). To see service implemented on these projects by 2011 and secure billions in federal dollars, substantial state resources need to be committed in 2005-2009.
• Move away from an unsustainable reliance on debt financing for transit rebuilding. Borrowing and debt refinancing accounted for 59 percent of the 2000-2004 capital program, contributing to growing operating deficits that can only be addressed through some combination of subsidy, fare increases, or service cuts. Debt financing will need to be greatly reduced in the 2005-2009 program if the MTA’s fiscal health is to be restored.

The economic importance of meeting these challenges is immense. Since the state of good repair effort began, improved mobility and increased ridership have made possible economic expansion that has added nearly 700,000 jobs to the MTA region. Failure to maintain a well-functioning system would put a foundation of continued prosperity at risk.

Even with these improvements, congestion in the region has increased and New York faces a growing competitive challenge from other regions that are investing in their transportation systems. In an era when quality of life is of paramount importance for attracting a talented workforce, the New York metropolitan area has the longest commutes in the nation and commuting times worsened in the 1990s. Cutting edge mass transit made possible the concentration of talent and energy that made New York the world’s leading 20th century city. State-of-the-art mass transit is an essential prerequisite if New York wants to maintain that preeminence in the global century that is now beginning.