The MTA wants City Hall to fork over an extra $250 million to pay for the Second Avenue Subway and the expansion of Grand Central Terminal, saying the city should share the wealth since the massive transit projects will boost their bottom line for decades to come.
The transit agency said that property values around Manhattan’s East Side will soar once they have completed the two mega-projects, substantially increasing New York City’s tax revenue.
The city has already pledged to pay $300 million to the MTA for the projects by 2015, but the MTA thinks they should get more because of the added tax revenue they will bring to the city.
“The MTA is making significant investments which we know over time will result in increased real estate value,” said Robert Foran, the MTA’s chief financial officer.
He pointed out that the city agreed to foot the bill for the expansion of the no. 7 line for similar reasons.
“The reason the city is paying for that is the city is able to capture real estate appreciation,” he said.
The Second Avenue Subway and the East Side Access project — which will bring the Long Island Rail into Grand Central — are both slated to be finished in 2016.
Barring a massive infusion of cash, the MTA runs out of money to pay for those projects by the end of the year.
A spokeswoman for Mayor Bloomberg yesterday declined to comment on the MTA’s request for added funds.
The plea for more cash came as part of the MTA’s five-year financial plan, which officials brought to the agency’s board today for review.
Foran said the agency also plans to reign in costs by asking labor unions to agree to pay more for their health care. They also want the unions to commit to pension reform.
By 2015, he estimated that pension spending will balloon to $1.4 billion dollars, while health care costs for employees and retirees will soar to around $1.7 billion.
MTA Chairman Jay Walder — who is leaving the agency in the fall — said the $14 billion budget represents a “fragile stability” after years of serious financial constraints.
The plan calls for no service cuts, serious cutbacks in spending, and two fare hikes in the next five years.
The most controversial aspect was the agency’s plan to take on an added $6.9 billion in debt to fund capital projects.
MTA Board member Andrew Saul — chair of the agency’s finance committee — called the agency’s mounting debt problems a “ticking time bomb.”
“This is going to be a major problem in the future, no question about it,” he said.
But MTA officials said they had little options, since they are not expecting much help from Albany.
“We really believe it is a manageable debt level,” said Foran.
Meanwhile, Mayor Bloomberg said that he wants Albany to contribute more.
“I don’t think Jay Walder has any alternatives,” he said, referencing the budget.
“I think that a much better idea would be if the Albany legislature gave more money to the MTA rather than raiding the MTA’s piggybank for other things, which is exactly what they’ve been doing.”