Friend-of-SAS Chris O’Leary, better know as the East Village Idiot, also happens to be a fellow transit advocate. Today, in advance of the MTA Board’s approval of the 23 percent fare hike, he penned an excellent piece disputing some common misconceptions about the state of the MTA’s finances. I was getting set to write a very similar post, and Chris offered to allow me to reproduce his.
So below is a guide to popular myths about the MTA’s budget problem. City Room comments certainly could use this primer. Be sure to check out East Village Idiot for a mostly humorous and sometimes serious look at life in New York City.
Today, the MTA will vote to raise fares again… this time to the tune of 23%. Your monthly Metrocard that cost you $81 this month will cost you $103 in June.
Yes, it’s outrageous. Yes, it’s unfair. But no, it’s not entirely the MTA’s fault. In fact, this fare hike could have been easily prevented by Albany in the past and present, but everyone finds it easy to blame the MTA for this. Stop blaming the MTA, and blame the people who deserve to be blamed.
Myth: The MTA can find the money, somewhere, to stop this hike
When people say this, I ask, how? Nobody has an answer, they just have a feeling. Well, I invite anyone who wants to make this claim to go into the MTA’s financial statements and find enough money to fill their $1.3 billion deficit. It’s not possible. They are out of money. And there’s a good explanation, which brings me to my next myth.
Myth: The MTA got into this deficit by spending too much on big projects
First off, let’s start by explaining how the MTA actually got into this mess. One of its biggest sources of revenue is real estate transaction taxes. Look at what real estate has done in the past two years. That revenue has barely topped 50% of its projection. If the real estate market was booming, we might not be in as big a mess. Secondly, one of the MTA’s biggest expenses is paying down debt on bonds it took out during the Pataki administration, when the MTA was terribly underfunded and MTA money was diverted to road maintenance. These are two key reasons the MTA has such a huge deficit right now. Neither of those are within the control of the MTA, and especially not the MTA’s current management.
But, onto the “spending on big projects.” Yes, there are several major projects in the construction phase right now: the Second Avenue Subway, the 7 Line Extension, and the East Side Access Project. But let’s say that we stopped work on those projects right now. We would lay off thousands of construction workers, and we’d sit around with empty tunnels for another 30 years. But also, we wouldn’t have an extra dime to spend on the operation of the subway system. Why? Because the construction budget – the MTA’s Capital Budget – is different from its Operating Budget. The Capital Budget gets funding from the federal government and the like, but the Operating Budget is reliant mostly on passenger fares, tax revenue, and any state and local funding it can get its hands on.
So, yes, they’re spending a lot on big projects, but they can’t spend that money on anything else.
Myth: $103 is still a good deal for riders
Okay, in the scheme of things, compared to driving a car, $103 is a good bargain for getting around the city. But we shouldn’t have to pay that much, because nobody else does.
Does that sound whiny and self-righteous? Probably, but let me explain. The New York City subway has the highest farebox recovery ratio of any public transit system in the United States. That is, the MTA relies on our passenger fares for over 67% of its revenue for the subway. As a basis for comparison, Chicago’s CTA has a ratio of 44%, LA County’s Metro has a ratio of 30%, and the lowly Staten Island Railroad’s passenger fares account for just 15% of its revenue. Where does the rest of its revenue come from? Mostly from state subsidies. And as we’ve already addressed, Albany gutted the MTA’s funding years ago.
Now, the state is making us pay more instead of adopting a system that would find a reasonable alternate revenue stream for the MTA: East River Bridge Tolls.
Myth: Putting a $2 toll on the East River bridges would be unfair to the poor and would hinder open access to the city
This is the stance that politicians who opposed these tolls have taken, and it’s absurd. I could make plenty of arguments about drivers paying their fair share, cars contributing to pollution and congestion, and the fact that my tax dollars subsidize the maintenance of the roads that drivers use even though I don’t own a car. But let’s just cut to the chase: those who opposed adding a $2 toll to the East River bridges would rather see transit riders pay an additional 23% for their commute while car drivers get off scot-free.
Tell me, who do you think can afford to spend more money: a car owner who drives to their job in Manhattan, or someone who rides the subway every day? Nine times out of ten, it’s the former. Car owners make more money than subway riders, plain and simple.
The second part of this myth is a new point that has surfaced recently. The newest argument against East River tolls has been that it would cut off Manhattan from the rest of the city, and would keep the five boroughs from being “open and accessible.”
This is absurd for two reasons: first of all, to anyone who doesn’t own a car, New York is already not “open and accessible.” I have to pay a subway fare (coincidentally, $2) to get to any other borough. Secondly, access between boroughs is already tolled, thanks to the Henry Hudson, Triborough, Bronx-Whitestone, Throgs Neck, Verazanno Narrows, and Marine Parkway Bridges, and the Queens Midtown and Brooklyn Battery Tunnels… all of which are more expensive to cross than the proposed toll on the East River bridges.
Myth: Adding tolls to the East River bridges will impact the cost of goods in Manhattan
This is a simple mathematics equation. Let’s say you have a small box truck that’s carrying half of its payload in tomatoes (roughly two tons). That small box truck would pay a $10 toll in the current plan. Let’s assume that the entire toll will be passed on to the consumer. How much more would a pound of tomatoes cost? ONE QUARTER OF A CENT.
Of course, I forgot to mention that the tolls will likely take some cars off the road in Mahattan, making it easier for this truck to make its deliveries quickly without getting caught in traffic. So you might actually save close to $10 in labor costs for that truck driver.
Also, in March of 2008, the Port Authority raised the tolls on its Hudson River crossings by $2 for cars (more, naturally, for trucks). The inflationary change in the consumer cost of food between March and April in New York was 0.9%. This matched the national average. And by the way, a lot more of our food comes from New Jersey and west than from Long Island.
Myth: Adding tolls to the East River bridges will cause more congestion because of the addition of toll booths.
NO! NO, NO, NO, NO! I cannot believe the amount of times I’ve heard this argument, even from the most educated people. Have you ever heard of E-ZPass? Believe it or not, that technology can collect a toll at normal speeds, too. For those who do not have E-ZPass, cameras will capture their license plate numbers and they will be billed via mail. You may think that’s some pie-in-the-sky advanced technology, but it’s actually been around in North America for 12 years.
So, let me reiterate: THERE WILL BE NO TOLL BOOTHS ON THE BRIDGES.
Myth: The MTA can just can all those employees who do absolutely nothing all day
In a perfect world, this wouldn’t be a myth. As transit riders, we all see the waste firsthand, as employees sleep on the job, stand around and do nothing, and sit in their little booths and ignore customers. Believe me, I can guarantee you that many of the MTA board members wish they could lay off 10-20% of the MTA’s workforce to turn up the revenue they need.
First of all, in a time like this, do you think it’s politically expedient to lay off thousands of people in this economy, even if they could? Probably not.
But more importantly, the Transport Workers Union (TWU) has such a stranglehold on the MTA that there’s virtually no way to end this waste unless the MTA went private. It’s a terrible situation, but being opposed to unions is so politically unpopular in this city that nobody would be willing to take that stand publicly. Do you remember the last time the MTA asked for concessions from the union? We ended up walking to work in the brutal cold for three days.
Myth: The MTA keeps “two sets of books”
On Monday, during the MTA’s finance committee meeting, MTA chairman Dale Hemmerdinger said, “we must get away from this notion that the MTA keeps two sets of books.” Why? Because it’s just not true. It was an accusation made of the MTA by Alan Hevesi six years ago – a charge that was resolved in court. And the board of the MTA should be offended by this accusation, since none of the members of the MTA’s leadership were in power back when this scandal broke in 2003. And in response to the scandal, the MTA became much more transparent, releasing all of their financial statements on their web site, and even holding webcasts about their finances.
But that’s not enough to satisfy the masses, apparently. Riders would rather get mad at the MTA for a six year-old scandal than blame Albany, who knew for a year that this crisis was coming, waited until the last minute to rush a proposal through the legislature, and then decide to do nothing and let the transit riding public suffer through massive fare hikes because educated politicians in Albany still believe that the MTA keeps two sets of books, no matter how many times they’re told otherwise.
Myth: Albany has the most corrupt, unopen, and incompetent state government in the entire country and voters need to clean house
Actually, yeah, that’s entirely true. Please, call your State Senator now and demand that the state fully fund transit.
Thanks again to Chris at East Village Idiot for this very comprehensive discussion of the public perceptions and misconceptions that have fueled the MTA into raising fares and the Senate into stunning inaction.