Investing in America’s largest transit system
I often forget how exciting capital investment can be. Most of us in muniland think more about bond structures, credit ratings and yields than about the actual projects being built. A short report about the MTA from Morningstar Municipal caught my attention:
The MTA has released its long-term capital needs assessment for fiscal years 2015-2034. This 20-year plan serves as a planning guide for the authority’s development of its five-year capital plan.
As Washington lurches from debt crisis to fiscal squeeze, it’s easy to see how dysfunctional government can be. Seeing MTA, the public entity responsible for the subway system, bridges and tunnels, 4,600 buses, the Long Island Railroad and Metro North, plan ahead 20 years restores my faith. After reading how much the MTA intends to spend, $106 billion, you may get excited about how New York City’s transit infrastructure will be renewed and expanded:
Over the next 20 years, the system plans on engaging in projects aimed to restore the system as well as expanding and enhancing service provision. Roughly $106 billion in projects to address continuing needs have been planned. This number is partially driven by the significant backlog of assets that need rehabilitation as well as current assets that are expected to reach the ends of their useful lives over the plan’s time period. Between $25 billion and $28.6 billion in projects is planned for each five-year increment of the assessment.
Most of the spending will go to maintenance for MTA’s system, the largest in the nation:
The MTA’s network of subways, buses and railroads move 2.6 billion New Yorkers a year, about one in every three users of mass transit in the United States and two thirds of the nation’s rail riders. MTA bridges and tunnels carry close to 300 million vehicles annually — more than any bridge and tunnel authority in the nation. This vast transportation network – North America’s largest — serves a population of 14.5 million people in the 5,000 square-mile area fanning out from New York City through Long Island, southeastern New York State and Connecticut.
The expansion of the system is also exciting. From the MTA 2010-2015 Capital Plan:
The size of the MTA’s rail network has not been significantly increased since its expansion in the first half of the 20th century. In the past 20 years, only four new route miles (a 1.7 percent increase) have been added to the subway system and only seven miles of new commuter rail links have been added. This assessment includes the next stages in the multi-year development of the network expansion projects currently underway – East Side Access, the Second Avenue Subway, and the #7 Line Extension.
I’m surprised that the MTA doesn’t have a user-friendly retail bonds. Transit users would likely be attracted to the bonds that fund this development. Maybe if borrowing costs rise, the MTA will turn to its millions of users to be part of rebuilding New York’s transportation system.