MESSAGE
| DATE | 2009-03-19 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [NYLXS - HANGOUT] Finally the TRUTH from Newsday
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newsday.com/news/local/ny-pojani0320-col,0,2271880.column
Newsday.com
Decisions made 9 years ago put MTA in current fix
Dan Janison
9:30 PM EDT, March 19, 2009
Nine years ago, in collaboration with state officials, the mighty
investment company Bear Stearns played a special role in shaping the
course on which the region's transit system now finds itself.
Not only did this financial titan advise the Metropolitan Transportation
Authority on a five-year, $17-billion capital program, but more notably,
its executives personally sold the plan to state lawmakers - helping
generate commissions for the firm while temporarily funding mass
transit.
From today's perspective, of course, the deal represents fiscal risk and
folly. Bear's collapse a year ago signaled other global financial
failures to come, and the debts carried by the state-run MTA drive its
latest threat of massive fare hikes and sharp service cuts.
Watchdogs suggested that the Pataki administration and its sparring
partners in the State Legislature were mortgaging the future. Policy
makers, they believed, figured they'd derail from that track when they
came to it.
State Sen. Brian Foley's office yesterday cited data showing how MTA
debt service payments of $609 million in 1996 have spiked to a forecast
$1.5 billion in 2009. That works out to an estimated $125 million per
month, said Ibrahim Kahn, spokesman for Foley (D-Blue Point).
"Everyone predicted it, and it came true with a vengeance," Gene
Russianoff, of the city's Straphangers' Campaign, said Tuesday,
following a news conference with Gov. David A. Paterson aimed at
prodding state senators to act on a painful new revenue plan.
Lee Sander, the MTA's executive director, said: "In 2000, Albany put our
entire capital program on a credit card."
Beyond the problems that usually come with overborrowing, the due date
for this huge credit card arrives at an especially uncertain time.
Fiscally, all levels of governments face major pressure as the economy
contracts and credit tightens. And politically, the MTA crunch hits just
as Paterson struggles with his clout - and new Senate Majority Leader
Malcolm Smith looks around for some.
With Paterson well aware of the MTA problem, a commission headed by
former MTA chairman Richard Ravitch called for new tolls on the East
River bridges, for fare hikes on subways, buses and the Long Island Rail
Road estimated at 8 percent, and for a tax on payrolls in the MTA
region, which includes Long Island, the city and its northern suburbs.
Without the plan, the MTA and Ravitch commission are threatening 23
percent more fare revenues and deep service cuts. Legislators say they
are attempting to negotiate a deal.
Smith's Democratic majority stands at a minimal 32-30. The Ravitch plan
is a tough lift. The freshly defeated Republican minority, led by Dean
Skelos (R- Rockville Centre), has unsurprisingly shown itself to be in
no mood to help take the weight for painful measures.
So while the Assembly backs a variation on the plan, the Senate majority
has been stalling.
First, Smith called for an audit of MTA finances. Then Finance Committee
chairman Carl Kruger (D-Brooklyn) floated a non-starter borrowing
gimmick. Then the majority submitted a plan that Paterson and the MTA
say falls $1 billion short, ignores capital needs and continues to
burden counties such as Nassau with big bus costs.
All involved say they are trying their best for a fair fiscal plan. But
as the spotlight falls on a divided Senate, the route remains murky,
like everything else financial and political these days.
Copyright © 2009, Newsday Inc.
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