The MTA’s continued funding woes aren’t just hurting mass transit riders and downstate taxpayers. They’re hurting New York’s ability to keep its bridges and tunnels in reasonable repair.
Bond analysts at Fitch may downgrade the debt backing the Triborough Bridge & Tunnel Authority, citing an “increasingly constrained financial and operating profile.”
Triborough’s problems are relevant today because they create a separate problem for the Metropolitan Transportation Authority, which depends on $400 million worth of annual subsidies from Triborough’s bridges and tunnels.
Triborough needs four percent annual growth “or more” to support these “historically essential annual transfers” to the MTA, Fitch says, and it also needs such growth to support $1 to $2 billion that Triborough needs in new debt to support its own repairs.
The answer is simple, right? Toll hikes.
The problem is that everyone is figuring out that there’s actually a limit to how much Triborough (which also runs the Queens-Midtown Tunnel and Brooklyn-Battery Tunnel) can raise tolls before people just go away, especially during a historic recession.
Recent toll hikes don’t seem to be working. Triborough hiked tolls by 10 percent in July, and expects further increases of 7.5 percent each in 2011 and 2013.
But although toll hikes in the past have had a “positive impact” on revenues, ot this time, with traffic down 2.3 percent in 2009 and revenues flat.
So Fitch thinks that Triborough will have to raise tolls by “higher than anticipated” to continue supporting its own capital needs and the MTA.
If the old model of people being impervious to toll increases is indeed broken, this move won’t work, and Triborough and the MTA are in more trouble.
Even in good times, though, Triborough’s commitment to the MTA has forced the bridges and tunnels to depend on borrowing for capital expenditures, leaving it in a precarious financial situation.
Absent a fiscal and economic miracle, bridges and tunnels will suffer if the MTA is to continue to get its money — there’s no free ride for anyone.
This is why it’s so important for state senators to ask Jay Walder, Gov. Paterson’s pick to head the MTA, exactly what he plans to do to fix the MTA’s budget at next week’s hearing, including what he plans to do with labor.
It’s not enough for Walder to say that he wants to keep the $1.8 billion in new annual taxes earmarked for the MTA, as he said at yesterday’s hearing — for it may not be enough.
Nor should Walder be able to say that he has lots of catching up to do before he can give concrete answers. He’s had enough time to think about this.
Remember: even with the bailout, the MTA “is facing extreme financial pressure,” Fitch says, and the bailout does “not solve the MTA’s longer term funding imbalance.”
And, no, the private sector is unlikely to be a solution to Triborough’s woes.
Private-sector toll-road modeling over the past decade has depended, just like Triborough, on an expectation of incessant traffic growth and driver insensitivity to toll increases — and so now everyone is back to the same drawing board.