July 24 (Bloomberg) -- New York’s Metropolitan Transportation Authority may face a deficit of more than $12 billion in the next five years to fund infrastructure projects, state Comptroller Thomas DiNapoli said.
The MTA, which runs the largest U.S. transit system, estimates it will need to spend $26.6 billion through 2019 to maintain and modernize its assets, DiNapoli said today in a report. Billions more will be needed to complete projects such as future phases of the Second Avenue subway, he said.
When the MTA last crafted a five-year capital plan, the initial funding gap was $9.9 billion before it was closed through borrowing and by scrapping some projects.
“The MTA has to find a way to finance improvements without putting the financial burden on riders,” DiNapoli, a 60-year-old Democrat running for re-election, said in a statement. “This can be achieved only by working closely with the federal government, New York state and New York City to develop a long-term financing program and by using resources effectively and efficiently.
‘‘Otherwise,’’ DiNapoli said, ‘‘needed repairs will be pushed even further into the future, and fares and tolls could rise even faster.’’
The MTA employs 66,000 workers and carries 8.5 million riders daily on subways, buses and commuter railroads in the New York City area. The agency had about $34 billion of debt as of May 30, according to its website.
Principal and interest costs, which don’t include what the MTA may have to pay in the next capital plan, are projected to surpass $3 billion by 2018, triple the amount in 2005, DiNapoli said.
If the agency closes the $12 billion funding gap through borrowing, annual debt-service costs may climb to $4.4 billion by 2025, the comptroller said.
Standard & Poor’s on June 17 boosted the MTA’s transportation-revenue bonds by one step to AA-, its fourth-highest grade. Moody’s Investors Service rates MTA’s revenue bonds two levels lower, at A2, which is comparable to Fitch Rating’s A grade for the credit.
The MTA is to present the capital plan to its board in September, said Aaron Donovan, a spokesman.
‘‘Like all transit systems in America, the capital plan will always require public financial support, and we look forward to a robust discussion with our elected officials and stakeholders to identify resources,” Donovan said in an e-mail.
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