MTA capital funding: good start.

The first quarter of 2005 was a pivotal one for the region's mass transit system, and by extension, the long-term strength of the local economy.

In Albany, Governor Pataki and the New York State Legislature grappled with tough questions on how to fund the Metropolitan Transportation Authority's proposed five-year, $27 billion capital plan.

The answer to age-old questions concerning what sources and what levels of funding are needed for the MTA has taken on even greater importance over the past decade.

With the City's population expected to grow by more than one million in the next 20 years, it is critical that we do everything in our power to ensure our transit system not only be maintained but expanded to accommodate the anticipated increased demand.

Speaking before the New York Building Congress last year, MTA Chairman Peter Kalikow called for $17 billion in capital funding over the next five years to maintain a state-of-good-repair and to upgrade security for the current system.

He also called for $10 billion in order to move forward with critical system expansions, including ongoing work to allow Long Island Rail Road access to Grand Central Terminal and early stage work on the Second Avenue Subway.

In the end, the MTA will be funded with approximately $20 billion over the coming five years. Most of the funding is devoted to repair and maintenance of the current system, while approximately $2.5 billion from the State and $2 billion from the City has been slated for continued expansion.

This is far less than originally requested but enough to keep expansion moving, albeit at a much slower rate than originally anticipated.

In a positive departure from past practices, the New York State Assembly and Senate did agree to include two new sources of revenue to be dedicated solely to MTA capital work--a sales tax surcharge and increased mortgage recording taxes on people living in the MTA region.

In addition, the State agreed to put a $2.9 billion transportation bond act before voters this November. If the Bond Act prevails, which is far from certain given that State voters rejected the last such referendum in 2000, half of the monies raised through the additional bonding authority will be earmarked for the MTA's capital program.

The Building Congress will support the Bond Act while at the same time reminding elected officials in Albany that its passage would not shield them from the tough choices that lie ahead.

New York State continues to face a structural deficiency in the manner in which it funds transportation, and it is a deficiency that cannot be addressed by the issuance of general obligation bonds. While the Bond Act would help in keeping the program on track through 2005, New York still needs to ensure that sufficient revenues are dedicated to maintain and grow the MTA network.

A number of potential sources of new revenue have been floated in recent months, primarily by MTA Chairman Peter Kalikow, who took the unprecedented and courageous step of publicly endorsing a blend of dedicated funding sources, including increased property transfer, mortgage recording, corporate and petroleum business taxes.

His ideas, as well as tolling East River bridges and reinstatement of the commuter tax, must remain on the table if we are to close current gaps and ensure that subsequent capital programs are adequately funded. Such sources of revenue, protected from yearly budgetary pressures, would allow the MTA to engage in prudent, long-term planning based on solid and reliable streams of future revenue.

The Building Congress applauds the MTA for developing a comprehensive capital plan that balances the need for system maintenance with expansion.

We also applaud Governor Pataki and the State Legislature for providing new sources of dedicated funding.

Their actions represent a positive start and a basis on which to build a consensus on enhanced and more reliable sources of funding as we look to the future.

RICHARD T. ANDERSON, PRESIDENT NEW YORK BUILDING CONGRESS