While the big stories out of yesterday’s Richard Brodsky’s committee hearing with Jay Walder focused around the Assembly rep’s pledge to help fund student transit, another comment by Jay Walder gave me hope for the MTA’s long-term capital plan. As Christine Quinn and Gene Russianoff’s Straphangers Campaign are pushing using stimulus spending to cover the MTA’s operating deficit, the MTA CEO and Chairman rejected this plan yesterday. Comparing this plan with Abe Beame’s 1970s decision to use capital funds to avert a fare hike, Walder explained why we need to continue investing in the long-term growth and maintenance of the system during times of temporary operating budget crunches. “I think the result of that [1970s move] was to drive the transit system into the ground,” Walder said.
Meanwhile, Crossroads, a Lehigh Valley-based smart growth blog, featured a recent report that explained why capital investment in transit makes economic sense. The a new study from Smart Growth America (PDF here) notes that spending on public transit produces twice as many jobs per dollar spent than investing in highway construction does. To remove stimulus funds from the capital plan and shuffle it to the operating deficit would both unnecessarily drain the capital budget and impact job creation at a time of economic uncertainty.
In the end, if the MTA can’t avert cuts and has to either reduce service to unacceptable levels or fire more people than they would hire through capital spending, I would begrudgingly support shifting stimulus dollars to the operating deficit. Until all other funding avenues are exhausted, though, Walder is right to reject this plan.
10 comments
Ben –
It’s just not correct to say that it’s taking transit capital dollars to pay for transit operations to adopt recommendations to use federal stimulus and other operating money to prevent proposed service cuts.
The New York City Council and the Straphangers Campaign has suggested two reasonable steps that would avert pending drastic service and paratransit cuts:
– Use up to $91 million in federal stimulus funds. Federal law permits up to 10% of its stimulus funds to be spent on operations. Transit systems around the country are facing the same financial crisis providing adequate service, including those in Atlanta and St. Louis, which are exercising this option. The use of the stimulus dollars for operations would be short term to help agencies and their riders through tough times. The funds are available: “The Metropolitan Transportation Authority (MTA) received $91.5 million in stimulus funds. Contracts have been signed for work covering 89 percent of the total,” according to a December 2009 report issued by Governor David Paterson.
– Reprogram for service up to $50 million in 2010 in operating funds. The MTA is planning to spend $50 million in 2010 in operating funds on capital projects. “Pay-as-you-go” for capital needs is a good goal, but it should not come at the expense of service cuts at a time of when the operating budget is badly pinched. The 2005 through 2009 MTA Capital plan – when the economy was much better– contained no capital pay-as-you-go from the operating budget. The 2000-2004 capital plan had only $20 million, which was added toward the end of the five-year program.
Our recommendation is totally different from former Mayor Abe Beame’s actions in the 1970’s. There Beame got the New York State Congressional delegation to divert capital money aimed at constructing a high speed line in Queens to save the fare. Here, we are asking Governor Paterson and the MTA to exercise its option to use up to 10% of stimulus funds on running the system and maintaining service. That’s national policy, being used in other cities. It’s a rational and reasonable response to the fiscal crisis.
And as for reprogramming $50 million of operating moneys now slated for “capital-pay-as-you-go” to using it to restore service cuts – that’s operating money in the first place! And it’s just the opposite of using capital for operations.
Gene
One question for clarification, Gene. MTA can use up to 10% of federal stimulus dollars, but is 10% = $91 million, or is $91 million the total received (i.e. $9.1. million = 10%)? My belief was that the former was correct, but your quote from the Governor suggests otherwise.
Ben,
Before the State cut the budget by $150M and the Payroll Tax came up $200M short there was funding for only two years of the Kapital plan the way it was. How is flexing some of the Federal money and actually giving back the operating funds already taken for the Kapital plan such an Armageddon like the 70s fiscal crisis? Methinks you and Walder protesteth too much, much too much.
How is it about giving back? The two budgets are funded separately via separate mechanisms. Unless you’re talking about debt payments…
Anyway, I’m willing to considering the flexing once other avenues of funding are exhausted. It might not be identical to the 1970s, but this slope is a slippery one.
See Gene’s last paragraph. And you brought up the debt maintenance, not a small chunk of change.
Complete nonsense, Mr. Walder. I took the subway to work throughout the 70’s. That operating budget did it’s essential job, which was to help keep New York City itself alive, as Gotham was in absolute extremis at the time.
What nearly wrecked the system in the 70’s had nothing whatsoever to do with capital construction. What damaged the system then was that even as subsidized by the mayor, the operating budget was squeezed to the point where both cleanliness and more importantly, track inspections all but disappeared. The result was one derailment after another, one smoky fire in the tunnels after another. I won’t even mention graffiti.
The new CEO’s testimony in Albany may have won a battle, but the MTA is losing the real war, the struggle to be perceived by the riding public, and hence their elected representatives, as being a viable, reliable, safe, timely, convenient and clean ride. Not a ride fit only for the poorest of the poor, which is where attempting to keep sacred construction cows on schedule by operating transit on a shoestring will inevitably lead.
You took the subway in the 1970s and that makes you an expert on the way their budgets are run and how the system was supported? They didn’t have the money in the 1970s to run the system, plain and simple. They don’t have the money now. It’s not about keeping construction going because the capital and operating budgets are funded and supported through separate money sources.
If you ride the subways today, it’s tough to say it’s not a viable, reliable or safe ride right now. It’s also arguably timely, still convenient and far cleaner than it has been over the last three or four decades. Your arguments don’t make much sense, and Niccolo and Gene make far better points about reshuffling funds.
Yes, the subways are better today. But that’s exactly the baseline against which the impending deterioration of service and cleanliness will be compared by todays riders, whose comments about the cuts do not auger well.
Running the subway system isn’t a popularity contest though. It’s about allowing people who know what they’re doing to do their jobs. The Person-on-the-Street isn’t going to understand transit policies and economic demands anyway. So why would Walder run by popular vote rather than by bureaucratic fiat?
To me, it sounds as though you’re saying that Walder should do something that wouldn’t be in the long-term interests of the MTA because a few people generally unaware of how to run a transit system might disagree with his proposals.
Ultimately and fundamentally, the MTA will only be as successful as the political will of the decade allows. And what voters think about the value of the service you provide eventually percolates up to Albany. The more reasons you give voters to value the service, the less likely their elected representatives will be to consign the MTA to the death of a thousand cuts.