The MTA said the city pay should pay it half a billion dollars for building the Second Avenue Subway since, the authority claims, the city stands to gain a big boost in tax revenues as property values go up around the subway after its planned opening in 2016.
The proposal is one of nine different sources of funding the authority is counting on to plug a $9 billion gap in its $13.5 billion capital construction plan covering 2012-2015.
But Mayor Michael Bloomberg seemed unconvinced when asked on his weekly radio show Friday about the MTA's idea for revenue-sharing.
"Let me check," the mayor quipped. "I'll call our finance director and see if taxes came in yesterday."
Bloomberg said he preferred having the authority plug its budget gap with new revenue like tolls on the East River Bridges. But that idea was most recently defeated by the New York State legislature in 2009.
"We should find some ways to raise money for the MTA," Bloomberg said. "Something that would encourage people to take mass transit so there'd be more fare payers."
But MTA Chief Financial Officer Robert Foran said Albany "has no appetite for new dedicated taxes or fees."
As a result, the bulk of the MTA's strategy for funding the capital construction plan is to float new bonds worth $4.7 billion and obtain a low-interest federal loan for $2.2 billion. The plan has not pleased transit watchers.
The Citizens Budget Commission, a watchdog group, said it was "better than doing nothing to meet the essential infrastructure needs of mass transit. But it has a critical flaw – it proposes to borrow billions without presenting a corresponding plan for new revenues to match the increased long-run debt service burden."
Gene Russianoff of the Straphangers Campaign told WNYC that it's likely the borrowed money, plus interest, will be obtained down the road from the fare box.
"I have sympathy for the MTA because it's not getting help from Albany or City Hall," he said. "But then it's turning to the riders and saying, 'Well, we'll see how this goes. There's a good chance your fares going to balloon down the road.'"
The MTA's capital construction plan will run out of money at the end of the year. Should the authority's funding plan not yield the billions expected of it, work on mega-projects like the Second Avenue Subway and a tunnel bringing Long Island Railroad trains into Grand Central Terminal could start to slow down by next year and, eventually, grind to a halt.
That doesn't even take into account the budgetary havoc to be wrought should some state lawmakers come through on their threat to eliminate the payroll mobility tax, which is expected to yield $1.2 billion for the MTA in 2012 alone.
Last Monday, Foran told a briefing for reporters on the budget that "if we lose that tax, we have a big hole that we can't overcome."
Balancing the MTA's budget also depends on saving $1.2 billion by convincing labor unions to agree to work three years in a row, beginning next year, without pay raises. John Samuelson, president of the 38,000 members of the Transport Workers Union, has said he’ll fight such a deal.
Foran said the MTA is doing its part by finding $2 billion in savings through cost-cutting measures like revamping an employee health plan, consolidating 34 data centers into three and eliminating 3,000 agency cell phones. He said funding must be found because the MTA's capital projects create 25 percent of all construction jobs in the metropolitan area, and are crucial to improving New York's subway and bus system.