The MTA is heaping on debt, mainly to cover Gov. Cuomo’s projects in its massive capital repair program.
To pump an extra $ 2.9 billion into the MTA’s five-year capital plan, the agency is going to float bonds, making the agency’s debt burden even heavier.
The extra money will pay for a few of Cuomo’s priorities for the MTA — making subway stations look nicer, automatic toll collection, expanding Long Island Rail Road and an AirTrain for LaGuardia Airport. The state, meanwhile, kicked in an extra $ 130 million for the new spending.
Other projects like the second phase of the Second Ave. subway and new fare payment technology to retire the MetroCard will also get more funding.
MTA board members cautioned against ballooning debt — $ 1.6 billion in bonds to cover the additional spending. That will increase the MTA’s overall debt load by $ 5 billion, to $ 43 billion, over the next seven years, according to the MTA’s chief finance officer.
MTA board members worried about the load of debt it’ll carry.
Veronica Vanterpool, the mayor’s board rep, said that one in every $ 5 spent by the MTA would have to cover debt payments under this spending plan, instead of making service better.
“It is a crushing amount of debt and business has to change,” she said before voting no.
David Jones, another one of Mayor de Blasio’s MTA reps, said that the cost of paying down debt makes it harder to fund improvements and speed up work to make the subway ride more bearable in the future.
City Transportation Commissioner Polly Trottenberg, another city board rep, said she abstained from voting because MTA officials gave too little time for members to wade through the details.
MTA board member Andrew Saul, who voted in favor of the spending, called the additional debt a “time bomb” that will hurt the agency’s finances, once interest rates rise.
Acting MTA chairman Freddy Ferrer defended the spending push.
“Do we have to borrow if we want things? We absolutely do,” Ferrer said. “Are we ready to do that and do we have the capacity to do that? Yes we do.”