DiNapoli: More MTA Debt Would Cause Fare and Toll Spike

State Comptroller Tom DiNapoli says simply borrowing the money to pay for the MTA's upcoming Capital Plan could be costly for riders.

The $32 billion plan covers a slew of repairs and new projects, including the extension of the Second Avenue Subway, new stops for Metro North in the Bronx and at Penn Station, and access to Grand Central Terminal for the Long Island Rail Road.

The MTA has only identified half the funding to pay for the improvements, and hasn't suggested any new sources of revenue. Governor Cuomo recently called the plan "bloated," but said "everything is on the table" when it comes to funding it.

The MTA approved the plan, but a state board swiftly rejected it, calling it the start of a dialogue.

Transit experts say politicians won't delve deeply into the funding question until after the November elections.

But as they weigh options, DiNapoli said the transit agency should avoid relying too heavily on debt, which is projected to reach $39 billion by 2018. He said borrowing to cover the gap could cost riders an additional 15 percent in fares and tolls.

"Over the coming months, the MTA will have to work closely with its funding partners to close the $15 billion gap in its capital program," he said. "Additional borrowing could increase pressure on fares and tolls, and while the MTA should look for savings, deep cuts could affect the future reliability of the transit system and jeopardize expansion projects."

Overall DiNapoli said the MTA's financial picture has improved, due to its own management and the stronger economy. And with 1.7 million subway riders in 2013, ridership is the highest its been since 1949.

But he warned that health insurance costs and debt service are growing faster than revenues, while new labor agreements are expected to cost the agency $1.5 billion more than originally budgeted.