MTA formally delays congestion pricing as reality of NY Gov. Hochul's decision leads to $16.5 billion in cuts

NEW YORK — The brutal reality of Gov. Kathy Hochul’s congestion pricing kibosh came clearly into focus Wednesday, when MTA brass officially delayed the extension of the Second Avenue subway into East Harlem, the construction of elevators at 23 subway stations, the addition of new subway cars on the numbered lines, repairs to the Verrazzano Bridge and a slew of other projects.

Tim Mulligan, the MTA’s deputy chief development officer, laid out $16.5 billion in cuts to the agency’s current capital plan.

“Plans are exactly that — they’re a plan, and they have to respond to reality,” Mulligan said. “Our reality for the capital plan changed dramatically 21 days ago.”

“We’re hopeful that resolution in one form or another is on the horizon,” he added. “But we have to operate the system, we have to protect the system, and we have to provide for the transition to the next capital plan.”

Following the presentation, the MTA board voted 10 to 1 to approve a resolution delaying the congestion pricing plan’s previously approved June 30 start date “until after such time as the execution of the legally required tolling agreement” can be signed off on by the state. The resolution also reaffirmed the MTA’s willingness to implement a congestion pricing plan should Hochul’s hold-up abate.

Hochul has said she is looking for ways to replace the lost revenue but has failed to deliver any concrete plans.

In a statement sent to reporters during the MTA’s Wednesday board meeting, Hochul sought to assure New Yorkers that the MTA “is now in a strong financial position” after she secured a higher payroll tax and other funding sources for the agency’s operating budget last year.

That money, she continued, “will allow it to continue to meet its responsibilities to its millions of riders to provide safe and timely transport.”

While the governor’s support did help fill a $1.2 billion hole in the MTA’s day-to-day budget for payroll and other operating expenses, her move earlier this month to pause the state’s congestion pricing plan effectively pulled $15 billion from the capital budget meant to fund large-scale system repairs, improvements and expansions.

Mulligan and other MTA officials said Wednesday that the loss of funds effectively created a $16.5 billion hole in the budget, when the loss of certain federal grant money was factored in.

Mulligan’s bare-bones budget puts off $5 billion in system expansion, a figure that includes grants from Phase 2 of the Second Ave. subway. The plan also delays $2 billion in accessibility projects, $3 billion in modern subway signaling systems, $3 billion in repair work, $1.5 billion in new rolling stock purchases, $500 million in electric buses, and $1.5 billion in other infrastructure upgrades.

Under Mulligan’s plan, the MTA will potentially forfeit $2 billion of the federal government’s $3.4 billion grant to support Phase 2 of the Second Ave. subway — the remaining $1.4 billion is secured against the agency’s 2019 capital plan.

The decision effectively kicks the ’70s era subway line plan down the road once again, allowing some $3 billion in MTA funding to be shunted toward repair and maintenance projects.

Still, MTA Chairman Janno Lieber said discussions with federal transportation officials were ongoing in an effort to buy time to save the federal funds.

“There is no intention to abandon that grant,” Lieber said.

Accessibility and elevator upgrades at 23 subway stations required under the terms of a 2022 settlement will also be put off.

Mulligan said the MTA would be making “limited” rolling stock purchases to replace “the least reliable rolling stock on subways and commuter railroads.”

As previously reported by the Daily News, three major rolling stock purchases made up the bulk of the MTAs outstanding capital budget: An order of R211 subway cars to continue replacing the aging R46 on the A, C, N, Q and W lines with an option to purchase more to replace R68s on the B, D, N, Q, W and Franklin Ave. Shuttle lines; M9A cars meant to replace the LIRR’s obsolete M3s; and funding to purchase an eventual replacement for the 40-year-old R62 on the No. 1 and 3 lines of the subway system’s A-division.

Mulligan said the $1.1 billion A-division car purchase would be cut, leaving riders on those lines reliant on cars that average a failure every 100,000 miles or less. New locomotives on the commuter rail lines will also be delayed.

It was expected that the LIRR’s M9A would continue to funded, as would the in-process R211 order to replace the bulk of the remaining R46s in the system.

But the MTA will pass on an option to purchase additional R211s to replace the obsolete R68s, which average a breakdown every 130,000 miles.

In total, the $4 billion initially slated for new rolling stock will be winnowed down to $2.5 billion.

Money set aside to repair train yards and bus depots will also be reallocated to other projects Mulligan said — meaning the facility where the aging R68 and R62 fleets will need to be maintained will themselves see maintenance deferred.

Other deferred projects include PA system replacements in 70 subway stations and dehumidification of the main structural cables on the Verrazzano Bridge.

“As we’re headed in a slightly grim direction, I just want to emphasize one thing,” Lieber said.

“Our obligation as fiduciaries and professionals is to work with everybody, however we feel at this moment, to try to be ready that when that financial solution that is being talked about arrives — God willing — that we will be ready to put Humpty Dumpty back together again as quickly as possible,” he said.

“We can’t give up hope and plan for a permanent deferral.”

Hochul sought to offer that hope Wednesday.

“This administration’s proven commitment to the MTA, as well as my record of delivering resources for critical priorities in the state budget, should provide the MTA with full confidence in future funding streams,” she said in her statement. “While the timing of the next budget may necessitate temporary adjustments to the timeline of certain contracts, there is no reason for New Yorkers to be concerned that any planned projects will not be delivered.”

But the governor’s statement said any additional funding might not come until next year.

“[T]he MTA has committed to direct all available resources to ensure the system remains in a state of good repair and continue to advance priority projects, and prepare to activate new contracts immediately following the designation of new revenue sources in next year’s budget,” she said.

Asked about Hochul’s statement, Lieber said he took the governor at her word.

“We’re expecting that there will be a solution to the [missing] $15 billion,” Lieber said.