Trains, tracks and tunnels are MTA’s top needs for its next capital plan, as its current plan runs aground

The MTA’s aging infrastructure needs a massive cash injection just as Governor Hochul threatens to pull the rug out from under public transportation.

The MTA needs money for new rail cars, power plants and physical structures for elevated tracks, subway tunnels and railroad yards, officials said Monday — on top of the $15 billion at risk from the governor’s “indefinite postponement” of congestion pricing over gridlock.

These infrastructure works will be included in the MTA’s unfunded 2025-2029 capital program, adding to the long list of unfunded needs in the current plan that were to be paid for through congestion pricing before Hochul stepped in.

The governor’s decision to “delay” congestion pricing has put $15 billion of the capital plan’s current $55 billion funding in doubt. If the tolls don’t pass, state leaders will have to rely on funding sources like tax and fare increases to pay for the needs of the next capital plan, which MTA President of Construction and Development Jamie Torres-Springer identified as critical during Monday’s meeting of the MTA Board’s Capital Program Committee.

“Railcars, we don’t have a choice here,” Torres-Springer told board members. “We have to get to 100 percent good repair, which is based on useful life, how long an asset can go without being replaced. We have a lot more cars that need to be finished in the next five years than we’ve had in the last five years.”

Torres-Springer’s presentation hammered home the same themes the agency emphasized in its 20-Year Needs Assessment last year, namely that equipment that has reached its useful lifespan or is long past its useful lifespan should be replaced. The MTA, for example, still operates thousands of mid-1980s-era subway cars — an untenable situation that threatens basic service.

The MTA’s top construction official also pointed to the need to replace key components in power plants as the kind of solution that could prevent multiple repeats of the subway’s recent meltdown, when a transformer at Essex Street failed and disrupted multiple subway lines. The authority has nearly 1,000 pieces of equipment in that category that the agency says need to be replaced either immediately or within 10 years, he said.

The whole process has been hanging in the balance by the fact that the MTA is currently $15 billion short on its 2020-24 capital plan due to Hochul’s congestion pricing kibosh. Torres-Springer said the MTA is planning its next capital plan under the assumption that the same governor who took away billions on a whim will soon find a new way to give the agency $15 billion.

“As we look at the 2025-2029 plan, the assumption is that the projects that are funded by congestion pricing will continue, as the governor has said. And we take her at her word: the $15 billion will be restored,” Torres-Springer said.

Since repealing congestion pricing in early June, Hochul has yet to find a way to close the hole she created. Recently, Sen. Jeremy Cooney, chairman of the Senate Transportation Committee, told Hochul to do it or shut up, challenging the governor to find a new revenue source or implement congestion pricing within 100 days.

MTA officials know the pressure they’ve been under, caught between the current plan and an upcoming plan expected to cost tens of billions of dollars.

Instead of coming up with new revenue sources over the summer, the MTA had to analyze its current plan and plan for the future.

“We don’t know how long the pause is going to be,” said Suffolk County Rep. Marc Herbst. “I don’t think anything is going to happen until probably the next state budget to figure out if it’s going to be funded at the same level. So we won’t have a clear picture until after April of what the funding stream is going to be to fix this issue.”

“Given the unknown progression, how do we know what we can fund and how do we present that to a board where we can make a decision based on our financial fiduciary responsibilities?” he added.

MTA Chairman and CEO Janno Lieber said the purpose of the July presentation was to gather “key stakeholders” — hint hint Albany — to think about how they can solve the problem on their side.

“What we’re trying to do is get the key stakeholders, and you know who they are, to think directly about the size of the capital program that they’re willing to support,” Lieber said.

As for how much these stakeholders should be willing to fund, Lieber himself has said that the next capital plan will cost more than the current record $55 billion, if only because of inflation.

MTA Chief Financial Officer Kevin Willens also laid the groundwork Monday for a hefty price tag for the next capital plan.

Willens, a former Wall Streeter, shared a JP Morgan report showing that the MTA spends less relative to the total value of its assets than companies in sectors such as freight rail, logistics and commercial aviation — and that its assets have degraded significantly more than the physical assets owned by the private sector companies.

That means if the MTA wants to keep pace with its private sector cousins, it would cost $16 billion per year to align the percentage of spending with the value of the assets, Wilens said. But it would cost even more money to make up for the years of depreciation that the MTA’s assets have suffered due to underfunding.

“We found that the MTA had a pretty big depreciation gap,” Wilens told board members. “More of our assets were depreciating relative to this group. And so JPMorgan said if you tried to both fund the $16 billion a year, plus offset that depreciation gap, to close the gap over a 20-year period, similar to what the needs assessment laid out, that would require another $7 billion in annual investment per year over the 20 years. So it’s $16 billion as a base and $7 billion to catch up — for $23 billion a year.”

The highest amount ever spent on a capital plan is $11 billion per year.

Public transit advocates called on the governor to implement congestion pricing and end the generational disadvantage of public transit.

“Proper care and maintenance of public transit requires more investment than New York City leaders are willing to spend, and tough choices are inevitable,” said Danny Pearlstein, director of policy and communications for Riders Alliance.

“Governor Hochul must begin implementing congestion pricing now to restore stakeholder confidence and get the MTA back on track.”