Misguided policy would have forced agency to add $50 million more to debt load.
Assemblywoman Nicole Malliotakis (R,C-Brooklyn, Staten Island) and Metropolitan Transportation Authority (MTA) board member Allen Cappelli were pleased to learn that Governor Andrew Cuomo has approved the MTA’s request for a waiver of the “Bond Insurance Charge” (BIC) for debt being refinanced in 2012 and 2013. Under state law, the MTA was forced to pay the state Division of Budget a fee for borrowing money from private investors. These fees have amounted to over $100 million since 2006, as the MTA has resorted to fare hikes, service cuts and further borrowing to fund their operations.
“Waiving the fee for the refinancing of the MTA’s debt is a step in the right direction toward bringing fiscal sanity to New York’s most troubled agency. If we are to hold the MTA accountable for their spending practices, state government must do its part to solve the problem as well. This policy was completely counterproductive as it was bleeding the MTA dry and contributing to the agency’s chronic failure to maintain adequate bus service and keep tolls and fares at a reasonable level,” said Assemblywoman Malliotakis. “Constant service cuts have been extremely painful for our community, which lacks transportation options yet faces the highest bridge toll in the world. Hopefully, by avoiding this fee the MTA can begin to bring service back to Brooklyn and Staten Island at an affordable cost.”
“Governor Cuomo has taken a terrific first step to saving resources for our riders and taxpayers. Hopefully as the economy improves we can get a permanent legislative exemption that covers all of our bonding,” said Cappelli. “Now the MTA needs to look at the additional money from this and increased passenger revenue and invest it in restoring much needed bus and subway restorations as well as some additions to service.”
“I would like to thank Governor Andrew Cuomo for waiving the fees that the MTA is forced to pay the State when issuing new bonds and renewing maturing bonds. In the past six years the MTA paid over $100 million in fees associated with Bond renewal and issuance. This year alone the waiver will save the MTA over $50 million,” said Daniel Cassella, President and Business Agent for Amalgamated Transit Union 726. “I sincerely hope that with these huge savings that the MTA can restore the service cuts that Staten Island endured over the past few years. The cost associated with restoration of the service cuts is a small fraction of the savings from this waiver.”
Assemblywoman Malliotakis has consistently sounded the alarm regarding the MTA’s fiscal irresponsibility and mounting debt. She recently voted against a budget bill that authorized the MTA to increase their debt limit by $7 billion, potentially reaching nearly $42 billion by 2014. The MTA’s current debt load trails only California, New York State, Massachusetts and New York City in size nationwide.