Cuomo and De Blasio Reach Agreement on MTA Capital Program

deblasiocuomoGovernor Andrew Cuomo and New York City Mayor Bill de Blasio, Saturday, announced an agreement to fund the MTA Capital Program.

The $26.1 Billion program will be the largest in the history of the city of New York, promising to renew and expand the current MTA program over the next five years.

The plan has been a point of contention between the governor and De Blasio. Cuomo has urged a larger investment from the De Blasio administration during press availabilities in recent weeks.

“You can look at the numbers. The 11 percent, Mayor Bloomberg invested about 11 percent of the capital budget, and we are asking the city to contribute about 11 percent into the capital budget,” Cuomo told reporters in Albany on Wednesday.

The resolution does not match up with what MTA Chairman Tom Prendergast pitched lawmakers in July. In a letter, he asked the state to contribute $8.3 Billion to the program, leaving the city with a $3.2 Billion investment. More >

Cuomo Commits to MTA Capital Plan, Says de Blasio’s “a friend”

Governor Andrew Cuomo said, Wednesday, that in exchange for what could be the largest Capital Plan ever approved for the MTA, he’ll push for another significant investment in upstate roads and bridges.

Cuomo accepted MTA Chairman Tom Prendergast’s request for an $8.3 Billion commitment to the Capital Plan Monday. New York City Mayor Bill de Blasio has not said publicly whether he will commit $3.2 Billion to the plan for maintenance and improvements to the MTA System.

“This is a big part of the budget, it always has been,” Cuomo said on The Capital Pressroom. “This is a worthwhile investment, and I’m sure we can find the funds if we make it a priority and I’m willing to make it a priority.”

The money would come from the state’s budget, which would require approval from the legislature. Cuomo says he doesn’t expect any push-back from the downstate-dominated body.

“When you look at the MTA region, that’s by far the bulk of the New York State legislature in terms of members,” Cuomo said. “But will the upstate people say ‘what about us?’ Yes – and we have a big, robust roads and bridges program which we had last year and we’re going to propose again next year and that will be addressing the need for upstate – and the MTA’s downstate.”

This year’s state budget included a $1 Billion investment in roads and bridges across New York State, thought that wasn’t limited to upstate infrastructure. Now the investment is in the hands of Mayor Bill de Blasio, who Cuomo says he’s spoken to about the plan.

“I talk to the mayor about any relevant issues that we have to talk about.,” Cuomo said. He did not say whether they mayor was planning to commit to the investment. He did say – after a weeks-long, very public feud with the Mayor – that he now, once again, considers him a friend.

“This is not personal,” Cuomo said. “On a personal level, I consider the mayor a friend as everybody knows and he made a couple of comments because he was frustrated and from my point of view life goes on and we have a number of important issues to work through and the MTA Capital Plan is one of them.”

The commitment from Cuomo comes more than a month after the end of legislative session. The governor says they wanted to take a closer look at the plan before they committed the full amount.

“We had a couple of suggestions that, frankly, the MTA hadn’t taken into consideration,’ Cuomo said. “I believe in Design-Build. We used it on the Tappan Zee and we saved a lot of money. And I believe the MTA could have more aggressively used the Design-Build strategy. They did, and they actually saved like $3 Billion on the Capital Plan.”

The $8.3 Billion will be paid out by the state over five years, meaning a $1.6 Billion commitment each year. If the city signs on, they’ll be paying out $600 Million annually. Cuomo joked that, from his perspective, the city should be giving more.

“On this Capital Plan, the predominance of the money goes to New York City, and the predominance of the riders are New York City,” Cuomo said. “Frankly, I could argue that the MTA is asking too much from the state from my point of view.”

As for the crumbling commuter tunnels under the Hudson River, Governor Cuomo says he wants to see a fix but the money’s not there.

“The problem there is money. It’s about $12 Billion dollars – that’s a lot of money,” Cuomo said. “If the federal government – which has only offered about $3 Billion – if the federal government can make a significant contribution then let’s go.”

Cuomo says he’s spoken to New Jersey Governor Chris Christie about the issue, and that both agree repairs are needed as soon as possible.

DiNapoli Frets Possible MTA Funding Gap

The Metropolitan Transportation Authority’s capital plan over the next five years could have a funding gap as high as $12 billion, a report released on Thursday by Comptroller Tom DiNapoli’s office found.

The report comes several months before the authority which oversees rail, bus, bridge and tunnels in the New York City area, is due to submit a five-year capital plan to state officials for approval.

DiNapoli in a statement said the MTA has made progress in managing the infrastructure of the system in recent years.

But he warned that the authority must find ways to invest in capital improvements without hitting commuters’ wallets.

“The MTA has to find a way to finance improvements without putting the financial burden on riders,” DiNapoli said. “This can be achieved only by working closely with the federal government, New York state and New York City to develop a long-term financing program and by using resources effectively and efficiently. Otherwise, needed repairs will be pushed even further into the future, and fares and tolls could rise even faster.”

Among the more pressing concerns is the heavy debt service burden the MTA has taken on, which the report found is due to surpass $3 billion in the next four yuears, which is three times higher than what it was in 2005.

“Even with biennial fare and toll hikes of 4 percent, debt service as a percentage of total revenue could rise from 16 percent in 2013 to more than 23 percent by 2025,” the report found.

The existing MTA capital program — which runs from 2010 through 2014 — had an initial funding gap of $9.9 billion, and that was closed by reducing the scope of the program and by adding more borrowing.

And despite the level of investment, DiNapoli’s office says a good state of repair for the entire system remains “elusive.”

The authority estimates it will need to spend about $105.7 billion over the next 20 years, including $26.6 in 2015 through 2019.

Even with those projects fully funded, the MTA won’t be able to restore existing assets to a state of good repair at the end of that funding period.

rpt6-2015 by Nick Reisman

Over Ravitch’s Objections, MTA Approves Verrazano Toll Reduction

Former Lieutenant Gov. Richard Ravitch told MTA Board members today that they would be breaking state law if they approved Gov. Andrew Cuomo’s plan to reduce tolls on the Verrazano-Narrows Bridge for Staten Island residents, robbing the authority of revenue it can ill afford to lose.

Ravitch, who served as MTA chairman from 1979 and 1983, noted that a law passed when he was elevated to the LG’s post by former Gov. David Paterson states that directors of public authorities have fiduciary responsibilities to that authority.

“I cannot understand why they would want to reduce their revenues at this point when they have two labor negotiations going on with no ability to pay and enormous capital needs,” Ravitch told me during a brief telephone interview this afternoon. “…They have a difficult enough time getting money from riders, toll payers and politicians, why give it up?”

Cuomo announced earlier this month that he had reached an agreement with the Legislature to reduce the one-way toll on the Verrazano, which connects Brooklyn and Staten Island, to $5.50 for Staten Island residents enrolled in an E-ZPass program.

The current rate is $6 for those who use the bridge at least three times a month. The E-ZPass rate for nonresidents is $10.66, and the cash rate is $15. Tolls are collected only on the trip to Staten Island. The toll reduction proposal will cost $7 million worth of revenue from the state budget and $7 million for the MTA.

The MTA Board approved the toll despite Ravitch’s warning – a move that didn’t seem to surprise him much.

Ravitch said he does not blame the governor for suggesting the toll reduction, insisting the board members should have sufficient spine to reject political proposals that don’t serve the authority they are duty bound to protect.

“They are the ones who are responsible; it’s their decision,” Ravitch said. “Governors and mayors want lots of things. When I was MTA chair, the governor asked me to consider lots of things, and I just said ‘no’ to most of them, and he respected that. It was the same thing with (NYC Mayor) Ed Koch. I don’t blame the governor for pushing things he thinks are in his interest, not in the slightest. That’s why we have boards. Otherwise, it would simply be an agency of the state.”

Ravitch also noted that the trouble with the Verrazano toll reduction is that it has had a cascading effect, causing residents elsewhere in the state to demand the same special treatment as Staten Islanders are receiving.

Case in point: Since Cuomo’s announcement in Staten Island, several elected officials in the Hudson Valley have renewed calls for Westchester and Rockland dwellers to get discounts on the new Tappan Zee Bridge when it’s complete.

Moody’s Gives Positive Outlook To MTA

Following a series of fare hikes and increase toll revenues, the credit rating agency Moody’s gave a positive outlook to the Metropolitan Transportation Authority, bestowing an A2/stable outlook.

The investor service found the MTA has lower cost estimates and, despite continued out-year budget gaps, the estimated $191 million deficit in 2017 is deemed manageable, considering it is 1.5 percent of the authority’s $12.6 billion expenses.

At the same time, Moody’s points to declining debt service costs due to interest rates that came in below budget and higher-than-xpected paratransit savings for disabled rider services.

“These factors more than offset negative revisions including higher overtime estimates, lower petroleum business tax receipts (a tax on the import and sale of petroleum products) and higher operation and maintenance needs,” according to Moody’s.

Still, Moody’s says it will continue to monitor net-zero wage growth for non-union employees, who have not received a salary increase since 2008.

Credit outlook for the MTA is found on page 36 below:

Moody's Credit Outlook – November 18 2013 by Nick Reisman

Paterson: Lhota Has ‘No Class’ (Updated)

Republican mayoral candidate Joe Lhota and Democratic former Gov. David Paterson are in a war of words today over finding fault for the MTA fare hike.

Lhota, the former MTA chairman who presided over the increase, blamed Patersona and legislative leaders in a recent GOP mayoral forum for the hike because they “took hundreds of millions of dollars” from the MTA to plug budget deficits.

In a radio interview with Curtis Sliwa this morning on New York City’s AM 970 The Answer, Lhota said there was nothing to apologize to Paterson for after Sliwa suggested he accused the former governor of being a “thief.”

“I’m just re-stating facts,” Lhota said in the interview. “I didn’t say anything that required an apology.”

Calling in later that morning, Paterson angirly responded to Lhota’s claim, saying the money needed to be moved around in order to stave off a fiscal crisis.

“In addition to not knowing anything about the budget, he’s now showing he has no class,” Paterson said. “The reality is that between 2008 and 2009 the budget deficit quadrupled in this state and I did everything to make sure New York didn’t wind up in the place California got in. We were able to balance the budget. We balanced the budget by taking a number of resources away from the MTA and we projected it out of far as 2013 to keep the budget balanced.”

He added that Lhota is “a man who has no class, or better yet, class without the cl”

Paterson was appointed to the MTA board by Gov. Andrew Cuomo in 2012.

UPDATE: Lhota took time out from campaigning to call us to respond to this post. He noted the word “thief” never crossed his lips, but rather it was Sliwa who was “being provocative” by characterizing the former MTA chairman’s comments in that way.

“What I said was that (Paterson) and the Legislature took money from the MTA that had been dedicated there to balance the budget, and in the process they said the fares would have to go up every two years,” Lhota explained. “…I told Curtis on the show that I never said anything like that, and I’m not responding to anything like that.”

“…It’s well documented the money was taken out of the budget for the MTA. That’s merely a recitation of facts that you have to remind David.”

Almost-NYC Mayoral Candidate Lhota Woos Staten Island GOP Chairman

Technically speaking, Staten Island’s Robert Scamardella is the only one of the five NYC GOP county chairs still up for grabs in the upcoming mayor’s race.

Today, Scamardella met at his Staten Island law offices with the field’s newest potential contender – former MTA chairman Joe Lhota – and came away impressed, but not yet ready to issue a full-throated endorsement.

“Mr. Lhota made an exceptional case as to why he would be an effective Mayor for all New Yorkers,” the chairman said in a statement to NY1. “He surely possesses the necessary experience to lead such a diverse and intricate metropolis. I was quit impressed.”

“I specifically asked him whether he has decided to run and his answer was a weak hedge when he said, ‘I am going through the decision making process now but wouldn’t have left the MTA if I did not think I was going to be a candidate.'”

“I specifically asked Mr. Lhota about his role as MTA chairman and how it relates to Islanders sensitivity about tolls. He said that his record shows that throughout his career he has been responsive to Islanders’ needs. For example, he played a major role in the closing of the garbage dump and advocated for the major discounts Islanders get on the Verrazano Bridge. He said, ‘Staten Island has a major transportation problem that involves bridges, mass transit and traffic and must be dealt with comprehensively by the next Mayor.'”

“Mr. Lhota did not ask specifically for an endorsement and I did not give one but I invited him to meet with my executive committee and he enthusiastically agreed. I’ll be setting that up in the near future.”

Brooklyn’s Craig Eaton and Jay Savino of the Bronx favor former Bronx BP Adolfo Carrion, although Eaton, who has been championing Carrion for months, recently left the door open to switching alliances.

Queens GOP Chairman Phil Ragusa is fan of supermarket/oil mogul John Catsimatidis. (The party’s executive vice-chairman, Vince Tabone, works for Catsimatidis’ Red Apple Group). Manhattan’s Dan Isaacs is also a Catsimatidis fan.

None of the chairs relishes the idea of a bruising GOP primary at a time when there’s a distinct possibility that City Hall will slip from the party’s hands for the first time since 1994. So, it’s highly likely that they’ll all end up on the same page, candidate-wise – and that’s likely to happen sooner rather than later, since they’re all very much aware a united front is their best hope of overcoming the Democrats’ overwhelming enrollment edge.

According to the NY Post, Lhota was also scheduled to meet today with Staten Island GOP powerbroker Guy Molinari and Isaacs.

Lhota’s Resignation Letter (And Statement)

In a letter sent to Gov. Andrew Cuomo, MTA Chairman Joe Lhota officially resigned effective Dec. 31.

He is expected to be exploring a run for New York City mayor as a Republican.

The letter to Cuomo is short and to the point.

UPDATE: We’ve now also posted Lhota’s statement, in which he says it has been a “privilege” to serve Cuomo, who appointed the former Giuliani administration official to the MTA post in October 2011.

Lhota also expressed “gratitude to the entire MTA workforce” for their hard work on bringing back the significantly impacted mass transit system after Hurricane Sandy.

Andrew Hawkins notes one accomplishment that has so far eluded Lhota is a contract deal with the TWU, although he does have 13 more days in which to forge one.

Lhota Resignation Letter (2)

Statement From Joseph J. Lhota

The Politics Of the MTA Payroll Tax Ruling

The Senate Republicans and their candidates spent most of the day crowing about, and slamming their Democratic opponents over, yesterday’s state Supreme Court ruling that the MTA tax is unconstitutional because it does not “serve a substantial state interest” and therefore should have required a home rule message.

The controversial tax passed as part of a 2009 MTA bailout package has been a campaign issue practically since the day it passed. It was so unpopular that eight Senate Democrats joined the entire GOP conferece in voting to repeal it back in June 2011.

The Republicans saw a partial victory in December 2011 when Gov. Andrew Cuomo agreed to a partial rollback of the tax that was particularly beneficial to small businesses and private schools (perviously, only public schools were exempt). Cuomo offered this as part of a deal that included “yes” votes from the GOP on the tax code reform deal that raised income taxes on the state’s wealthiest residents – albeit not as high as much as would have been achieved through a simple reinstatement of the so-called millionaire’s tax.

This was a significant win for Sen. Lee Zeldin, a Long Island lawmaker who made elimination of this tax a hallmark of his successful 2010 campaign against former Democratic Sen. Brian Foley, who supported the MTA bailout during his brief tenure in Albany.

Zeldin has a little-known opponent this year, and he doesn’t appear in any danger of being ousted in November. He’s so confident that he recently took $50,000 of his campaign cash and used it to fund a leadership PAC, with which he plans to support pro-business candidates at the state and local levels.

But there are other competitive races on Long Island, which is currently a Senate GOP stronghold.

Notably, the Republicans are trying to defend the seat being vacated by retiring veteran Sen. Owen Johnson. They’re running Assemblyman Phil Boyle, who will face off against Democratic Suffolk County Legislator Ricardo Montano.

The payroll tax also played a role in GOP businessman Bob Cohen’s unsuccessful bid to oust Democratic Sen. Suzi Oppenheimer in 2010.

This year, the Westchester district is again a battleground, as Oppenheimer is retiring, leaving Cohen to fight Democratic Assemblyman George Latimer for her seat. Cohen and Latimer traded barbs today over the MTA court decision, with Cohen noting that Latimer was cheering the death of a tax he had voted in favor of creating in the first place.

Even before the ruling, Republican New York City Councilman Eric Ulrich, who is favored to win the Sept. 13 primary against Juan Reyes and take on Democratic Sen. Joe Addabbo in Queens, was making an issue of the payroll tax, criticizing Addabbo’s “yes” vote back in 2009.

Transit advocates are warning yesterday’s ruling will be a disaster for the MTA and could lead to higher bridge and tunnel tolls and train and subway fares. The MTA is pledging to “vigorously appeal” the decision, noting four prior challenges to the constitutionality of the tax have been dismissed in the past.

I wouldn’t be at all surprised if there’s another decision on this issue before the November elections. Perhaps this ruling will be overturned on appeal. Perhaps the lawsuit Rockland County Executive Scott Vanderhoef says he plans to revive will produce another result this time around.

In the meantime, this is some great political fodder for the Senate GOP. And it’s worth noting that the judge who issued yesterday’s ruling, the Hon. Bruce R. Cozzens Jr., is a Republican. Just sayin’…

Lhota Apologizes To Perkins (Updated)

Here’s something you don’t often see in these overheated political times: One high-profile public official apologizing to another for some less-than-flattering comments he made in a news report.

The apologizer is MTA Chairman Joe Lhota, who made some very disparaging remarks in this morning’s New York Times about Sen. Bill Perkins, an outspoken Harlem Democrat who is pushing to pass legislation that would ban food consumption on the NYC subway system.

Perkins’ target is rats. Lhota opposes the ban even though both he and the senator have spent the better part of a decade trying to address Big Apple’s rodent problem. Lhota was even known as the “rat czar” during the Giuliani years when he served as a deputy mayor.

In the NYT report, Perkins was very laudatory of Lhota, crediting him for helping get a so-called “rat summit” at Columbia University in 2000 off the ground, (Perkins was a NYC councilman at the time; Lhota testified at the event).

But the newly-minted MTA chairman, who was unanimously confirmed by the Senate back in January despite the fact that the MTA is an authority many lawmakers – particularly a few Senate Dems – love to hate, did not return the favor.

“The idea that we worked together in the past goes far beyond the reality,” Lhota said of the senator. “As a legislator, he does nothing but talk and talk and talk, and he does nothing.”

This afternoon, however, Lhota changed his tune, issuing the following statement:

“I would like to apologize to Senator Perkins for my comments in the NY Times today. Bill is an excellent legislator with great constituent services, and I share his commitment to addressing the problem of rat proliferation in New York City.”

“Though we agree on many rat related issues, we disagree on banning food on the subways. I have a great deal of respect for Senator Perkins.”

UPDATE: Actually, this wasn’t an entirely unprovoked act of contrition by Lhota, as Sen. Adriano Espaillat called for an apology earlier today, saying:

“Commissioner Lhota should be focused on improving subway services, not taking on elected officials. Last I checked, it was part of the MTA commissioner’s job to collaborate, not pick fights with state legislators.”

“Commissioner Lhota’s remarks in the New York Times are immature and counterproductive. Whether or not you agree with Senator Perkins’, or any other senator’s legislation, it’s inappropriate to level personal attacks, instead of focusing on the issues. I urge Commissioner Lhota to offer Senator Perkins an apology and get back to work, fixing the MTA.”