April 2008

In a story bound to pick up speed over the weekend, the tireless Elizabeth Benjamin at the Daily News’ The Daily Politics blog reports that MTA board members are threatening more fare hikes if congestion pricing isn’t approved. That leaves with one question: Is the MTA board engaging in some political chicanery or are this fair city’s subway riders up a fare hike creek without a paddle if congestion pricing fails this weekend?

Benjamin reports that she got a call from an anonymous MTA board member who levied this fare hike threat:

In a move that seemed designed to scare the bejeezus out of state lawmakers, an MTA source called this morning to insist the authority is actively “looking at different scenarios” to fund its five-year capital plan if the Legislature doesn’t pass congestion pricing – including the possibility of yet another fare hike.

“If they don’t get a new revenue source out of Albany, either congestion pricing or some other new tax, they’re going to have to get the money somehow,” the source said. “Their current finances are so soft they can’t do the $30 million (worth of service improvements) they promised. How are they going to pay the debt service on the next capital plan?”

When pressed, MTA spokesman Jeremy Soffin danced around the issue a little bit. “A number of things have been looked at, but no specific fare numbers are being run,” Soffin said to the Daily News reporter. “But, if the capital plan isn’t funded, we have to find ways to fund it, and we have limited choices.”

For the MTA, the fiscal news really is this bad. Just a 10 days after the MTA had to indefinitely postpone service upgrades that should have come our way after the fare hike, Benjamin notes that the MTA’s finances are looking even shakier:

MTA revenues from four taxes on real estate transactions dropped in March far below what the authority’s budget projected. The budget anticipated a $47 million drop but those revenues fell $79 million in March.

If that trend continues the MTA is in deeper financial trouble. It already is projecting a $200 million deficit for next year and much larger deficits in subsequent years, largely because of rising payments for debt racked up because of inadequate funding during the Pataki years.

The unspoken bad news here is that even with congestion pricing, the MTA will still be facing a budget deficit. For the umpteenth year in a row, Albany is going to scale back its fiscal contributions from the originally-promised levels, and the MTA cannot just print money itself. Another fare hike next year seems inevitable.

Yet again, we’ll be faced with the trade-off: Do we want a subway system that’s cheap — some might say too cheap — and bad service or are we willing to shoulder yet another fare hike to maintain or improve service levels? No matter the answer to that question, the debate is a long way off. Meanwhile, if Albany isn’t going to kick back state funds for the MTA, the least they could this weekend is acknowledge the city’s home rule message and pass congestion pricing. The money will be a dedicated revenue stream for the MTA, and the authority should could use it.

Gene Russianoff of the Straphangers Campaign is something of a subway guru. He is a tireless advocate for riders’ rights and for all things public transit in New York City. When he talks, rail watchers listen.

Yesterday, Russianoff talked and in a big way. In a piece in The Post, not normally a big congestion pricing supporter, Russianoff outlined his support for and belief in a transit lockbox for the revenues from congestion pricing. Usually historical arguments based on the way the MTA has been funded over the last 40 years, Russianoff lays out a compelling case for the security of a lockbox. While many MTA watchers on this blog and elsewhere have been skeptical of the promise that all congestion pricing revenue would go toward transit improvements, Russianoff’s pieces assuages many of those fears.

He writes:

Some still doubt the lockbox will work. But dedicated funds for transit actually have a very good track record of getting the cash where it’s supposed to go.

The MTA has been funded by several such revenue streams (via portions of the corporate-franchise, mortgage-recording, real-property and sales taxes, among others) since the early ’80s, providing tens of billions to run our subways, buses and commuter rail. And the dedicated funds have never been raided to balance the state’s budget or fund projects unrelated to transit.

Indeed, one such fund goes back to the MTA’s birth: Back in 1968, the agency was granted the surplus from the tolls on MTA bridges and tunnels. The funds support both daily operations and the rebuilding of the system.

This year, it’s set to get $334 million from facilities such as the Brooklyn-Battery and Queens-Midtown tunnels and the Triborough Bridge. In 40 years, the bridge and tunnel surpluses have never been taken and used for non-transit purposes.

Russianoff ends by urging the public and its elected representatives to avoid voting against congestion pricing because of sketpicism over the funds. If the money is earmarked for the MTA, then, as history shows, it will be delivered to the MTA no ifs, ands or buts about it.

Indirectly, then, Russianoff’s piece brings us to another conclusion: The MTA has suffered financially not because they have been denied funds from their dedicated revenue sources but because state and city institutions have not come through with fiscal contributions to the transit authority. For decades, public officials have promised the MTA money to cover budget gaps when dedicated revenue streams can’t cover everything, and for decades, public officials have reneged on those promises. For the most recent example of this, we need look no further than Monday when news came that Albany may not deliver all that was once promised.

As Russianoff urges, New Yorkers need to hold their public officials responsible for this oversight. Too long have our elected representatives siphoned money away from the MTA. If we care about transit, we should urge these officials to fund the MTA. Enough with the wasteful projects and pork spending. Give this city — the economic engine of New York State — the funds it needs to run a state-of-the-art 21st century transit network. It all starts with congestion pricing, but it ends with money that far exceeds those contributions.