By Paul Berger 

The New York Metropolitan Transportation Authority's $55 billion plan to modernize subways, buses and commuter rails is at risk because of revenue losses and increased borrowing caused by the coronavirus pandemic, according to a report issued Tuesday.

New York state Comptroller Thomas DiNapoli, in an annual report on MTA debt, said the authority might need to cut several billion dollars from its five-year spending plan unless it can reduce expenses or find new sources of revenue.

"The MTA's mounting debts and devastated revenue make it unlikely that it can afford all the work it planned," Mr. DiNapoli said.

Mr. DiNapoli also said that the MTA's debt burden, which has tripled over the past 20 years, will reach almost $47 billion by 2023. Debt repayments are projected to consume 23% of operating revenues by 2024, Mr. DiNapoli said, compared with an average of about 16% over the past decade.

A spokesman for the MTA, Aaron Donovan, said the authority will be able to complete capital projects faster and less expensively than before because of a recently-created division that oversees construction and development.

The MTA has a spotty record of achieving its capital spending goals. The comptroller's report notes that between 2016 and 2019, the MTA spent an average of $5.8 billion annually on capital projects, below a target of $7.1 billion.

At the beginning of the pandemic, in spring of 2020, the authority froze most of its capital spending as revenues from fares, tolls and dedicated taxes plummeted. It has balanced its operating budgets, of around $17 billion annually, for the period 2020 through 2023 with the help of almost $15 billion in federal coronavirus relief and a $2.9 billion loan from a short-term lending program set up by the Federal Reserve.

Mr. DiNapoli's report said the authority may have to deduct the $2.9 billion from its capital budget when it repays that loan. The MTA spokesman, Mr. Donovan, said such assumptions are premature and that the MTA hasn't yet decided how it will repay the debt.

Because of the capital spending freeze, the MTA spent $5.4 billion on capital projects in 2020, well short of its $13.5 billion goal. The freeze delayed projects to add new subway escalators and elevators and to bring service on the authority's Metro-North Railroad to New York City's Penn Station.

MTA officials said earlier this year that they expect to spend between $7 billion and $10 billion on capital projects in 2021 thanks to the federal coronavirus relief, which has taken some strain off operating budgets.

Mr. DiNapoli's report notes that many funding sources for the capital spending remain at risk. New York state and New York City might not be able to commit funding because of their own budget pressures. Meanwhile, a plan to charge vehicles entering Manhattan south of 60th Street has been delayed by up to two years because of a delay under the Trump administration.

MTA officials say the charge, which is supposed to support $15 billion of capital spending, might not be implemented until 2023.

Write to Paul Berger at Paul.Berger@wsj.com

(END) Dow Jones Newswires

April 20, 2021 16:33 ET (20:33 GMT)