Yahoo Finance MTA Halts Second Avenue Subway Extension After Toll Pause
(Bloomberg) -- The Metropolitan Transportation Authority plans to defer $16.5 billion worth of capital upgrades to modernize New York City’s aging transit system — including extending the Second Avenue subway to Harlem — after Governor Kathy Hochul paused a congestion pricing plan that would have funded such projects.
Most Read from Bloomberg
YouTuber Dr Disrespect Was Allegedly Kicked Off Twitch for Messaging Minor
Bolivia’s President Arce Swears in New Army Chief After Coup Bid
SpaceX Tender Offer Said to Value Company at Record $210 Billion
The MTA, the largest public transportation provider in the US, runs the city’s subways, buses and commuter rails. It must now slash its multi-year $51.5 billion capital program after suspending the tolling initiative blew a $15 billion hole in that spending plan.
The agency will shift its focus to state-of-good-repair work, which maintains assets and the system’s efficiency, Janno Lieber, the MTA’s chief executive officer, said Wednesday during the agency’s monthly board meeting.
“We can work to make sure that improvement and expansion projects that are being moved down the list — and the accessibility impacts break my heart — but we can make sure that they are ready to go when the funding shows up,” Lieber said.
The deep spending cuts will sideline the MTA’s plan to modernize a more than 100-year-old transit network and help bring back more riders. The delays dampen the MTA’s ability to provide efficient service as it must move millions of people a day on aging train cars, tracks and signals.
The Second Avenue subway extension would have added three new accessible subway stations and reduced crowding on neighboring subway lines. Along with halting that project, the $16.5 billion cut will defer: replacing subway signals from the 1930s; accessibility upgrades at 23 subway stations; purchasing 250 electric buses, renewing five subway stations and $1.5 billion of new subway and train cars, according to a presentation of the revisions to the capital plan.
Many board members expressed concern for the viability of the system and the impact to lower-income residents who rely on mass-transit in their day to day lives.
“Their risk is enormous,” David Jones, a board member, said during the meeting. “They can’t get to work, they can’t get to doctor’s appointments, and they can’t get to school without the system fully operational.”
Cuts
While the MTA will prioritize state-of-good-repair work, the agency will still cut spending on those projects by $3 billion. Other reductions include $5 billion cut from expansion projects, $3 billion less to upgrade subway signals, $2 billion pulled from accessibility renovations, $1.5 billion less for new subway and train cars, $500 million cut from zero-emission bus purchases and $1.5 billion less for infrastructure and technology upgrades.
The pause will also strain the agency’s operating budget, and transit advocates warn it will send the system back to 2017’s “Summer of Hell,” when riders suffered chronic delays.
Postponing congestion pricing puts the MTA, a state agency, in a difficult spot. MTA officials still support the plan and say they stand ready to begin the tolling initiative. All but one of the MTA’s board members, some appointed by Hochul, voted in March to implement the plan.
Congestion
The cuts to MTA’s capital plan comes as the subway is already experiencing an uptick in episodes where at least 50 trains are delayed. There were 319 major incidents holding up at least 50 subway trains this year through May, a 50% jump from 215 of such events over the first five months in 2023, according to MTA data.
New York City is the world’s most-congested urban area for a second straight year, according to INRIX Inc, a traffic-data analysis firm. Drivers the city lost 101 hours because of traffic during peak commuting times, costing the area $9.1 billion in lost time.
The congestion pricing plan, which was set to begin June 30, would have charged motorists driving into Manhattan’s central business district with the anticipation that traffic would decrease by 17%. MTA expected to collect $1 billion annually from the new toll and borrow against that revenue source to raise $15 billion for infrastructure work.
MTA’s board Wednesday approved a resolution that acknowledges Hochul’s suspension but also instructs the MTA to be ready to start the tolling program once it can begin.
Hochul earlier this month shocked the region when she put an indefinite pause on the tolling plan, citing the cost on families and small businesses. Her decision risks legal challenges. Brad Lander, New York City’s comptroller, has threatened to sue if the plan isn’t reinstated by the end of the month, saying Hochul’s decision violates a 2019 state law that directs the MTA to implement congestion pricing.
In a Wednesday statement following the board meeting, Hochul said she’s committed to finding additional funding sources for the MTA.
“This administration’s proven commitment to the MTA, as well as my record of delivering resources for critical priorities in the state budget, should provide the MTA with full confidence in future funding streams,” she said. “While the timing of the next budget may necessitate temporary adjustments to the timeline of certain contracts, there is no reason for New Yorkers to be concerned that any planned projects will not be delivered.”
The MTA’s operating budget — which covers day-to-day expenses — still faces a potential deficit, as delaying congestion pricing will put pressure on that spending plan. Maintenance and debt-service costs are expected to increase along with overtime pay, transit officials have warned.
(Updates with new information throughout.)
Most Read from Bloomberg Businessweek
The FBI’s Star Cooperator May Have Been Running New Scams All Along
How Jeff Yass Became One of the Most Influential Billionaires in the 2024 Election
How Glossier Turned a Viral Moment for ‘You’ Perfume Into a Lasting Business
©2024 Bloomberg L.P.
