(photo: the governor's office)
MTA officials acknowledged at their June 2019 board meetings that the agency is borrowing money to be repaid through a New York State law that promised to have the State of New York provide the MTA $7.3 billion once the authority had exhausted its own funds on spending for the current five-year capital program.
The 2016 state law was merely an “IOU," there had been no specific source of funds identified for how the state would pay the money, nor has there been any plan developed since enactment in the state budget that year.
The state's total commitment was $8.6 billion, including some new capital funds it added as part of the newer Subway Action Plan and other promises, which to date have provided about $1 billion in actual funds. It is the $7.3 billion IOU that is still outstanding. New York City was also required to provide $2.7 billion to the agency as part of a mutual obligation with the state. The city has provided about $800 million to date.
These commitments refer to the current 2015-2019 Capital Construction Program, not the 2020-2024 Program to be released in a few weeks by the MTA. That new program, not yet adopted, will have its main funding coming from the congestion pricing system passed earlier this year, with revenue from the tolls scheduled to begin in 2021.
The elements of the 2015-2019 MTA Capital Program were patched together in the 2016-2017 state budget (a year late), my final year in the State Assembly while I was still chair of the Assembly Committee on Corporations, Authorities, and Commissions. The full 2016 package that became the Capital Program was about $30 billion; some $3 billion has been added since I retired. The MTA Capital Program Review Board adopted the plan in 2016 shortly after the budget was enacted.
The question of the state’s outstanding commitment to the MTA capital program, written into the law as the last dollars to be spent in the overall plan, has been the source of limited scrutiny, but is now in the spotlight as the IOU comes due and the next capital program is designed.
At the June 26 public meeting of the MTA Board Finance Committee, finance chair Larry Schwartz and board member Veronica Vanterpool expressed concerns about an agenda item authorizing the MTA to borrow an extra $2 billion to fund the capital program.
Per the minutes of that MTA Finance Committee meeting (page 12):
"Ms. Vanterpool voiced her reservations about increasing the amount, noting that there is that $7.3 billion commitment from the State that has not been received, as well as the commitment from the City. Mr. Foran [the MTA's Chief Financial Officer]... noted that the commitment from the State is predicated on MTA to spend MTA dollars first and that MTA is already beginning to commit against the State's portion (about $2 billion commitment, with some expenditures already incurred) and the State has agreed to that.”
The discussion continued (page 13), "Mr. McCoy [MTA Finance Director] commented that regarding the State funding, the $1.2 billion in BANs [bond anticipation notes] were issued in two components; $1 billion for MTA funded projects, and $200 million is designated for the projects under the State Commitment. Mr. McCoy stated that it was clearly communicated with the State that, when the notes are due, the State will need to provide the funding."
The MTA Board proceeded to add the $2 billion in new borrowing at its main June 26 board meeting two days after this finance committee discussion. State Comptroller Thomas DiNapoli, in an August 7 report on New York City's financial condition, stated (on page 34), "According to the MTA, it has committed all of its capital resources and has begun to commit up to $3 billion against the State's obligation. Consequently, the MTA will require funding from the State beginning next State fiscal year (2020-21) to cover the cash cost of these capital commitments"
Where Will The Money Come From?
The question now is: How will the state meet this new commitment in the coming budget?
The state has the option of itself providing the MTA the money directly, or creating a stream of funding for the MTA to enable the agency to secure the borrowing of the funds, or some combination thereof. But there are serious challenges, the first of which is that 2020 is an election year for the state Legislature.
To enable the MTA to borrow $7.3 billion, a revenue source, i.e. another tax, would need to provide the authority about another $400 million a year. Does the Legislature want to do another tax increase in an election year? Maybe 2021, not 2020. Seven of the eight new Democratic State Senators that won the Democratic party the majority come from the New York City suburbs. Four of these seven suburban races were super-close, with the Democrats winning by just 2-3 percentage points, or even less.
Several other races were won by less than ten points. Many of these newly-minted legislators could be uncomfortable voting for another tax increase for the unpopular MTA, after voting this year for congestion pricing, a real estate transfer tax surcharge, and internet sales taxes. They are already likely to face Republican attacks in the election for these votes.
The state's ability to borrow the funds directly (the MTA does not need all $7.3 billion next year, but over several years) is also severely constrained by limits on the state government established by the Debt Reform Act of 2000. This law limits state-supported debt to 4% of the state's total personal income from the preceding calendar year. The following chart from a July 2 state comptroller report on the 2019-2020 budget shows how the state's capacity to borrow is dwindling.
Next year the state's ability to borrow funds in support of the entire state budget and the entire capital program will be limited to about $1.36 billion and by 2023-24 will be nonexistent. Borrowing for the MTA would be competing with roads and bridges, water and sewer, the state and city public university systems, mental hygiene, and the environment. Little could be anticipated from this source given the constraints.
Another possibility would be for the state to provide the MTA money from the financial industry settlement windfall. Some $2.6 billion is available in 2020-21 from this source, but, once again, the MTA would be competing with upstate economic development commitments, Javits Center and transportation commitments, and general budget relief. But Governor Cuomo and the Legislature could make several hundred million dollars available from this source -- once again, very limited, given the competition for other funds.
Of course, the Legislature could do a tax/fee hike in 2021, even something as simple as extending the for-hire vehicle surcharge on Uber and Lyft to trips with outer borough destinations or adding to the Manhattan business district price. But it is a tax increase of sorts.
Late in the 2015 legislative session, as we struggled to deal with funding the 2015-2019 MTA Capital Program, I worked with MTA senior officials to introduce legislation to provide the MTA a new source of money without a tax increase. The bill provided for a staggered diversion of existing personal income tax revenue from the MTA region over a four-year period to enable the MTA to borrow what was viewed then as $6-7 billion, providing about $400 million a year in revenue to which the agency would be entitled at the end of four years.
Growth in the state's personal income tax revenue would now bring in about $500 million a year under the formula in the bill (A. 8227-a from the 2015-2016 session), so the percentage amount in the old bill could be shaved.
The critical concept of the bill was that it statutorily entitled the MTA to the revenue, enabling it to borrow the money itself and not be a debt of the state subject to the Debt Reform Act and the limits on the state’s capacity to borrow. As written, it would start in the first year with a small three-tenths of one-percent diversion of PIT revenue in the region to the MTA , reaching 1.2% in the fourth year. Each year's revenue piece was separated in a schedule pursuant to law, so if a recession hit, the state could suspend the following year's diversion and preserve revenue in the general fund.
The governor and the Legislature should continue to examine this concept, which was believed to be workable by MTA officials at the time, though viewed by senior Assembly Ways and Means staff as just not needed. But the $7 billion IOU has come due.
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Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.
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(photo: Ed Reed/Mayor's Office)
“Life in the fairest big city in America should never feel impossible,” said Mayor Bill de Blasio, touting his agenda for the coming year during his annual State of the City speech this past January.
But just a few blocks from where de Blasio works every day at City Hall, a health crisis brought on by the mayor’s own jails proposal could soon make life increasingly unfair, unhealthy – and yes, impossible – for tens of thousands of New Yorkers who reside in Chinatown.
The de Blasio administration unveiled plans to build four borough-based jails in the Bronx, Brooklyn, Queens, and Manhattan as a part of his administration’s continued effort to close Rikers Island jails – a 10-year, $10 billion undertaking that is going through the Uniform Land Use Review Procedure (ULURP) and is headed for a vote by the City Planning Commission on September 3.
As that debate continues, newly submitted testimony by the NYU Center for the Study of Asian American Health regarding the proposed Manhattan jail at 125 White Street states that construction of the planned 450-foot jail (see city rendering, left) will have detrimental health-related consequences for those residing in Chinatown – especially for vulnerable senior citizens.
That is why members of the City Planning Commission must reject the mayor’s jail plan and demand it be reworked to prioritize the health and safety of Chinatown residents. And if the City Planning Commission fails to take that crucial step, the City Council must step up and say no to this deeply problematic proposal.
The NYU testimony demonstrates that the rubber-stamped Environmental Impact Study commissioned by the city as part of the ULURP process was incomplete and didn't tell local residents the full story. As long as the mayor refuses to acknowledge its shortcomings, he shouldn't be allowed to build the new facility.
To be clear, this isn’t about NIMBY politics – and isn’t the first time Chinatown has had to deal with the repercussions of demolition- and construction-generated pollutants. Following the September 11 attacks, the EPA conducted an evaluation to determine how construction-site emissions affected nearby residents’ health in the short and long term. The findings are disturbing.
The EPA concluded that increased exposure to elevated fields of pollution from construction sites worsen residents’ co-morbidities and often result in hospitalizations and acute disease episodes.
The EPA report cites an immediate increase in respiratory ailment-related hospital admissions following the attacks, and an increase in admissions for heart- and stroke-related problems as well. The EPA indicated that Chinatown’s asthma rates are twice that of other New York City communities, and those exposed to the surrounding air pollutants were found at higher risk of having respiratory and cardiovascular issues.
And when it comes to the new jail proposal, expected construction-site emissions, otherwise known as particulate matter (PM), have both short- and long-term repercussions, according to the NYU testimony. The World Health Organization (WHO) reports that PM pollution causes 8 percent of all lung cancer deaths, 5 percent of cardiopulmonary deaths, and 3 percent of respiratory-infection deaths.
The City Planning Commission should also be concerned that Asian-Americans are increasingly sensitive to construction-site emissions, per NYU’s testimony. Chinese, Korean, and South Asian neighborhood residents have a higher risk of getting cancer than non-Hispanic whites when exposed to PM, and the mayor’s decade-long proposal would see Chinatown engulfed in PM for the foreseeable future.
The bottom line is that de Blasio’s proposal will essentially make parts of Chinatown uninhabitable for years. Those living in adjacent buildings may be required to relocate, and those living in Chinatown will be forced to deal with a consistent stream of construction-site emissions that will undeniably put their health and the health of their families at serious risk.
Members of the City Planning Commission and the City Council have a lawful responsibility to ensure that any new development plans do not harm the public interest – and they must do that by rejecting de Blasio’s jail plan. There’s just no reason why the necessary and sensible effort to close Rikers jails must come at the expense of the health of local communities.
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Jan Lee is Chair of The Chinatown Core Block Association. Eric Dillenberger is Chair of the Walker Street Block Association.
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(photo: WSFSSH)
The conversation around affordable housing in New York largely focuses on ensuring that working people can continue to live here.
Bus drivers, healthcare workers, elementary school teachers -- too few of the people who fulfill some of our city’s key services can afford a market-rate one-bedroom apartment within city limits. It’s inarguably a crisis that threatens the fundamental quality of our city, as well as its continued economic growth.
But another tidal wave is growing that deserves equal attention: as baby boomers retire and reach old age, a growing number of seniors -- on fixed incomes, many of them with ongoing health care needs -- are finding themselves homeless.
The population of single adults 65-and-older living in shelters has doubled since January 2014 to over 1,400 people. A UPenn study estimated that this population could grow to nearly 7,000 by 2030.
Homelessness hits seniors particularly hard: without a permanent address, it becomes harder to secure necessary medications, and the likelihood of senior abuse rises significantly. Social isolation has cascading impacts on emotional and physical wellbeing.
Homelessness increases an individual’s risk of mortality, and homeless individuals 50- to 62-years-old often have healthcare needs more likely in later age -- like problems with vision, mobility, and hearing, as well as falls.
How we address this crisis gets at the heart of who we are as a city.
The Mayor’s Office and City Council have made some inroads in building affordable housing for independent, low-income seniors, with over 989 units built to date during the de Blasio administration and another 2,986 in the pipeline, which will expand to roughly 5,000 units -- but homeless seniors have very specific support needs, and more can be done to develop and operate permanent affordable supportive housing catered to them.
A 320-unit, three-building affordable senior housing campus known as Tres Puentes/Borinquen Court, which opened at the end of May and is operated by long-time supportive housing developer the West Side Federation of Senior and Supportive Housing (WSFSSH), which I run, may provide a model.
Diverse groups in the South Bronx worked together to ensure the successful navigation of some of the city’s most complex urban development challenges in service of the project, which, now that it’s open, not only provides top-tier services for seniors, but does so in a space that the neighborhood can be proud of.
Here’s three key lessons we’ve learned through the development and operation of this campus that may be replicable for other senior housing in the Bronx and across the city:
First, for successful development, create strong local partnerships.
It’s an unfortunate reality of our city that residential communities can be suspicious of new affordable housing. By bringing everyone to the table from day one, from residents to developers, community members and government, you can build a coalition to support new development in service of area seniors. You can address fears before they become real roadblocks to bringing needed housing online.
Strong coalitions are also more likely to successfully troubleshoot some of New York’s most vexing challenges on the road to development -- like overcoming infrastructural surprises that are the result of historic disinvestment and comprehensively addressing environmental remediation needs.
Second, embrace bold design choices.
Shirking the institutional aesthetic to weave in design elements practiced more traditionally in market-rate residential projects typically reserved for individuals of higher socioeconomic status has multiple benefits -- from adding architectural diversity into the neighborhood to showcasing to residents that their comfort matters.
Bright colors and double-height ceilings make the space cheerful and welcoming, a place for seniors to feel elevated and connected to their community. The building is adorned with a corrugated veneer popular in modern design, evoking the neighborhood’s industrial past and creating an inviting façade.
Aesthetics matter, not just to residents and staff, but to the neighbors who pass the site every day. Thoughtful aesthetics are a reminder that affordable housing can be an integral part of our communities, that its residents are our neighbors, worthy of identifying with and fighting for.
Third, invest in unique social services for seniors.
Housing homeless seniors is a start; but to help truly end the homelessness crisis among seniors, comprehensive social services that get at the unique needs of the age group are a must. These social needs can only be addressed in supportive housing, of which there is so little.
Every angle of seniors’ social needs must be addressed as part of any new supportive housing development.
Financial coaching can not only prevent abuse and scams, but help navigate local and national systems for health care and entitlements.
Exercise regimens should be catered to the age group, focusing on muscle retention and flexibility as well as other medically-indicated activities.
On-staff social workers and partner health providers must specialize in senior issues like dementia and depression, and complex social challenges with adult children and friends.
But it’s not just addressing crisis; with proper support, today’s seniors can live fuller, longer lives. By investing in smart development to address seniors’ needs, we can ensure that they live lives more connected to their communities.
With a commitment to high-quality housing New York can lead the way in empathetic and thoughtful care for seniors, solving its senior housing crisis for good.
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Paul Freitag is Executive Director of West Side Federation for Senior and Supportive Housing (WSFSSH).
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