The New York Building Congress, New York City’s largest and most diverse coalition serving the design, construction and real estate industry, appreciates this opportunity to comment on one of the most urgent issues facing New York State – how to secure funding for the MTA’s Capital Plan and cover projected MTA operating budget shortfalls over the next ten years. The establishment of this Commission attests to the vital importance of the transit system to the economy, environment and quality of life in the New York region, and we commend Governor Paterson on this initiative to address the mounting financial pressures facing the MTA as it strives to maintain its system, complete ongoing expansion projects and pursue further capacity expansion.
It is widely acknowledged that an era of substantial growth is underway in the New York region, with New York City’s population alone expected to swell by one million more people by 2030. With that level of growth, straining the transportation system becomes inevitable unless steps are taken to improve and expand the existing infrastructure and make more efficient use of it. Those steps depend on two things: solid capital planning and adequate transit investment that is reliable on a multi-year basis.
To its credit, the MTA has pursued effective comprehensive capital planning over the past 25 years. Combined with multi-year financial plans, the results have been a high- performing transit system that today gives the New York region competitive strength compared with urban centers in the United States and worldwide.
The proposed $29.5 billion 2008-2013 Capital Plan released in late February continues that tradition. The heaviest lift yet is funding the latest capital program, a difficult challenge given the current climate of declining real estate tax revenues, high fuel costs and projected City and State budget deficits. Rising construction costs, which the Building Congress recently reported are escalating at a rate of approximately one percent per month, add to the burden when infrastructure projects are delayed or subjected to extended deadlines.
In the wake of these challenges, the MTA has made significant efforts to become a more efficient operation through a series of gap-closing measures that include a 6 percent budget reduction over four years, the consolidation of back-office operations for all MTA agencies via implementation of a new Business Service Center, workforce development and closer integration and more streamlined management of the MTA’s three separate bus companies. While these and other efforts by the MTA will generate cost savings in the long-term that are expected to help control operating expenses, they simply will not bridge the burgeoning gap in the capital plan.
The message is clear. Existing funding mechanisms alone are insufficient to grow, let alone maintain, the robust transit infrastructure on which the economic health of our City and State depends. The time has come for a new financing strategy, and that strategy must involve a broad spectrum of revenue sources that reflects the shared responsibility of all who use and benefit from the transit system. Those stakeholders include the MTA, City and State government, transit customers, auto users, truckers and the business and real estate community. No stakeholder should be exempt from paying its fair share.
There are valid reasons for all to contribute. The average subway and bus fare is lower today than it was in 1996, and on-time service and reliability have never been better. Roads and highways are less clogged than they would be without the mass transit options that serve this dense region. The air is cleaner. Proximity to transit increases real estate values. And the transit system is the reason for - and continues to support - our job-dense, high-wage economy. In other words, infrastructure investment is the lifeline of the economy, creating and attracting jobs, stimulating private investment in neighborhoods and businesses, generating tax revenue and forging lasting quality-of-life improvements that will secure New York’s competitive position in the global marketplace.
For years, the Building Congress has been a proponent of dedicated funding for capital improvements to mass transit. That is why, earlier this year, we urged the City Council and State Legislature to endorse a congestion pricing plan that would have dedicated all revenues to capital improvements in our transit system. Like congestion pricing, a uniform toll policy would help our transit system and roadways operate more efficiently, reduce traffic and make the air cleaner. These and other sources of dedicated funding merit serious consideration by this Commission as part of a cohesive and balanced strategy to ensure full funding for the MTA capital program over the next five years, as well as for successive MTA capital programs.
But when the work of this Commission is done, the fate of the MTA’s capital program will rest ultimately in Albany. Leadership requires vision and courage, and all eyes will be on the State Legislature to make tough choices, like implementing user fees and other sources of dedicated funding, to benefit the greater good. The alternative is failure, as the MTA will otherwise be unable to maintain a state-of-good-repair and new starts will be cancelled or deferred. The transit system will fall into decline, as it did in the 1970s, and New York’s economy with it. Failure should not be an option. New York is the greatest city in the world, and only determined effort will keep it that way.
