Photo Courtesy of Benjamin Kanter/Mayoral Photography Office
Mayor de Blasio has decried the MTA’s value capture funding tool suggestion.
By Michael V. Cusenza
The president of the Metropolitan Transportation Authority and the first deputy mayor of New York City were featured on the main card this week in the latest round of the seemingly never-ending fiscal fight that is MTA/Gov. Andrew Cuomo vs. the de Blasio administration.
On Sunday, MTA President Patrick Foye sent a letter to Deputy Mayor (and former City budget guru) Dean Fuleihan, spitballing an idea to provide short- and long-term funding to the agency, “which is currently under a state of emergency as a result of decades of disinvestment and disrepair,” Foye noted.
One of the measures being debated in Albany during Fiscal Year 2019 budget negotiations is value capture, Foye told Fuleihan. Value capture, according to best-selling business author Josh Kaufman, is “the process of retaining some percentage of the value provided in every transaction.”
According to Foye, value capture is a commonly used funding tool to finance major capital projects.
“It would give the MTA and the City the ability to fund critical projects that would be part of its 2020-24 capital program. Unfortunately, without this new funding stream, those projects would lack the funding to proceed,” Foye said. “The next phase of the Second Ave subway from 96th Street to 125th Street is a vital project and it would need to be aborted without this financing option. There are no other viable funding mechanisms. The simple fact is that the MTA does not currently have the necessary funding to move critical projects along.”
Several City officials, including the mayor, immediately shot down the finance balloon floated by Foye.
“I think value capture is just highway robbery. It’s just taking money that would have gone to the City’s coffers to pay for Police, to pay for Fire, to pay for Sanitation, to pay for schools. And that money’s just gone,” de Blasio said Monday on “Inside City Hall” on Spectrum News NY1 via the New York Daily News. “The notion the State government could reach into your property tax money, the foundation of local government funding, I think a lot of people are going to be deeply concerned in Albany that that’s a slippery slope.”
Foye made his case in the missive to the first deputy mayor.
“Implementing value capture would be a win-win for the MTA and the City. It would provide the City with an option that they could use at their discretion going forward. But the MTA can take no action without the City’s explicit approval,” he wrote. “However, if the Legislature does not approve this option, there is no way the MTA can fund the next phase of the Second Avenue subway or any other major new capital project. The MTA will not have the capital available and the City has made it clear that they will not fund additional capital for the MTA plan.”
Foye concluded by pointing out that “if the City doesn’t want to approve a particular project for value capture or approve the project at all, it doesn’t have to. At the end of the day, the City has the total ability to veto any project through its representative on the Capital Projects Review Board.”