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| Re: MTA Bonds - NYS Takes Its Cut Off the Top (1154372) | |||
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by WillD on Thu May 3 00:32:16 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by N6 Limited on Wed May 2 23:59:10 2012. Again, Public Authorities, toll road groups, and so on exist to pay debt service. It is integral to their existence as a politically sustainable construct. All other functions are secondary to the amount of money which can be routed from tolls, taxes, and other revenue streams to the banks, engineering, and legal firms they enrich. Pesky things like providing transportation, ensuring public good will, or other distractions only enter into the equation inasmuch as they affect the coupon payments and debt reissues, and contracts to the other firms that form the retainer regiment.That's not to say it's a bad way of going about things. It's actually an excellent compromise to bring a diverse group of political interests which might otherwise be largely opposed to the sort of government spending required to build a new subway in NYC these days together behind the megaprojects NYC now requires to make up for decades of neglect. Debt service is simply the price we pay for getting that compromise off the ground in the first place. IMHO it beats the hell out of not doing anything and letting NYC slowly atrophy to the point where congestion abates. And the alternative that allows construction, wherein we would adopt the Asian model of a real estate developer tied to the authority constructing a new line and using the profits from the real estate to cover the debt service, would never fly in the US. In any event, we can only use the real estate sales to pay off the capital costs and eliminate debt service if we are dealing with greenfield or very low density suburban areas in the first place. Using that model to build the transit NYC requires to serve areas built up in the absence of any transit expansion would simply be foolish. |
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