New York's troubled public transit system has a $9.9 billion funding gap in its 2010-2014 capital program which it may have to close with debt absent any other source of funds, the state comptroller said on Thursday.
The Metropolitan Transportation Authority, the biggest such system in the United States, has identified funding for the first two years of its $28 billion 5-year program, leaving a gap for the following three, Comptroller Thomas DiNapoli said in a statement.
The program offers funding for 67 percent of the agency's capital needs for upkeep and upgrades but does not include any funding for the next stage of a new subway line being constructed on the east side of Manhattan, he said.
The plan assumes the agency will sell $16.5 billion in new debt if it receives no financial assistance. That is based on a plan to sell $6 billion of bonds backed by new state revenues and another $9.9 billion to cover the funding shortfall.
That much new debt would strain the operating budget and increase pressure to raise fares and tolls, DiNapoli said.
That would cause debt service costs to more than double to $3.5 billion by 2020 from $1.5 billion in 2009, he said.
The MTA is expecting debt service to consumer 16.6 percent of revenues in 2009, but DiNapoli expects it could consume 24.6 percent of revenue by 2017 without aid.
(Reporting by Ciara Linnane; Editing by James Dalgleish)