In a significant setback for the New York Metropolitan Transportation Authority (MTA), the state Capital Program Review Board has rejected the authority’s proposed capital plan for the years 2025 to 2029. This ambitious proposal, amounting to $68 billion, has been torpedoed primarily due to a glaring budget shortfall of $33 billion. The decision was made by key legislative figures—Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie—who exercised their veto power. As a result, the onus is now on Governor Kathy Hochul to propose alternative funding sources in her executive budget scheduled for January.
This rejection draws attention to a critical moment in New York’s infrastructure planning, especially as the MTA has already signaled that numerous transformative projects could be stalled due to the lack of funding clarity. MTA spokesperson John McCarthy emphasized the authority’s commitment to its capital plan, stating that it was designed in accordance with a comprehensive 20-Year Needs Assessment. He expressed optimism that dialogue between the governor and the legislature would lead to a resolution that supports reliable and expanded transit.
The decision to veto the MTA’s capital plan appears to have been a calculated maneuver by the legislators. They cited the deficit in the capital plan as a precursor to requiring legislative action to remedy the shortfall. In a joint communication to MTA CEO Janno Lieber, they implied that the current situation could be addressed during the forthcoming legislative session as part of the broader budget negotiations.
Rachael Fauss, a senior policy advisor at Reinvent Albany, interpreted the veto as a strategic tool for the legislature to leverage greater influence in the budgeting process. Historically, the MTA operates within a framework where it presents capital plans with funding gaps, then awaits affirmative actions from the governor and the legislature. However, Fauss articulated that this approach has led to a convoluted process rife with a lack of transparency.
The review board’s actions echo past sentiments regarding the approval process of the MTA’s capital plans. In instances where plans have passed without adequate funding—a notable case was the approval of the 2014 plan despite a significant budgetary gap—the consequences have often led to delays and inefficiencies. Fauss’s observations highlight how the state legislature and governor’s approach to funding has often been reactive rather than proactive.
Additionally, the MTA faces a daunting history of delays in approving capital plans. The last plan, stretching from 2015 to 2019, was only formally approved in 2016, leading to delays in essential projects. The veto of the current plan may result in a similar stagnation—a scenario that critics of the agency have long warned about.
As Governor Hochul prepares to unveil her budget proposal, her strategies for addressing the $33 billion budget gap will be closely scrutinized. Historically, there have been discussions surrounding the implementation of regional tax revenues, as seen with congestion pricing. Nevertheless, lawmakers have preferred to position much of the financial burden on New York City taxpayers. This precedent raises concerns about equity in funding infrastructure improvements, as pointed out by Fauss, who advocates for a broader, more equitable funding model.
Hochul’s administration may also seek to amplify the state’s capital contribution grant, currently set at about $4 billion, which is substantially lower than in previous cycles. The governor’s commitment to increasing this figure could help mitigate some of the financial strain on the MTA. However, this approach may still encounter resistance in the legislature, particularly if it insulates boroughs outside of New York City from their fair share of funding responsibilities.
As this budgetary puzzle unfolds, the MTA is forced to continue operating under the constraints of its existing 2020-2024 capital plan. The agency’s long-term health hinges on resolving funding issues while managing immediate infrastructure needs, including aging subway cars and public transport enhancements.
In this context, it’s crucial that the capital plan rectifies not just immediate project requirements but also sets the stage for future operational resilience. The looming $90 billion in identified capital needs, as highlighted by a state comptroller review, is not a small hurdle. As the MTA strives to improve accessibility and expand services—key priorities that Governor Hochul has championed—the actions taken in the upcoming budget discussions will greatly influence the operational capacity of New York’s transportation infrastructure.
The veto of the MTA’s capital plan by the state review board has revealed a broader contention between the governor’s office and the legislature. As they navigate this contentious budget year, effective dialogue and cooperation will be paramount to sustain New York’s vital transit infrastructure. The stakes are high, and the next few months will be critical as stakeholders seek to reconcile ambitions with fiscal realities.