Absent such rosy assumptions, what incentive exactly is there for the MTA to EVER get its cost structure under control? If the perpetual reward is that you get underfunded annualy at ever lower service levels, Walder is wasting his time in cost containmet efforts. Better he should focus on maintaining service at all costs.

In any event, the Obama Administration will propose that “Build America” bonds be allowed to be used for operating costs. Not only will the federal government borrow billions and have it diverted from investment, but the MTA could do so itself.

Quinn has no kids, Russinaoff will be gone from the city when the 1970s return. What do they care about the future? It is based on 30 years of similar decisions that Doomsday is arriving.

Perhaps that’s a good idea – but Russianoff and friends haven’t addressed what should happen on the capital side to address the shortfall there.

Of course, some of the proposed “cuts” could be better described as streamlinings – making more efficient use of the infrastructure. Saving money isn’t necessarily a bad thing if most riders aren’t unduly hurt (and especially if some riders benefit). Perhaps those should be implemented regardless of the funding situation.

And as others have pointed out, this isn’t a temporary, one-time problem. Our elected officials and rider advocates should be working hard to identify a permanent solution to the transportation funding problem rather than relying on quick fixes that push off the problem to next year. Perhaps it would also help if they were willing to work with the MTA rather than portray the MTA as the villain.

Well, my sentence that you quoted has more to do with my political assumptions. I don’t believe that providing a rock steady revenue stream is politically viable.

“In reality, the MTA is a public benefit corporation that’s supposed to be supplying a badly-needed public good.”

I would characterize the MTA as a quasi-public agency supplying a vital good from a naturally occurring monopoly (on the rail side.) I’m hesitant to call it a public good, but it is closer to being that than a private good. Politically, making such economic distinctions between mass transit and automobiles strikes me as too nuanced for the general public. Treating mass transit as a pure public good opens up a can of worms.

“To a certain level, we can and should ask the MTA to … eliminate waste and redundant spending.”

I’m not sure what limitation you’re implying here, if any, but I believe that until service (quality and quantity) is reduced, with the possible exception of reducing wages (but not benefits) of needed labor, cut away!

“But on the other hand, the political bodies ultimately responsible for establishing this PBC and overseeing something as basic as transportation have to come through with the money.”

That’s easier said than done. The parent entities don’t acknowledge such a responsibility. Its especially difficult to get the money when the money isn’t there. The MTA might need to be restructured so that accountability is not so divorced from responsibility.

So I generally agree with your entire comment, Russell, but I think we need to examine an assumption underlying this suggestion. Doesn’t that assume that the MTA is purely private company supplying a luxury good? In reality, the MTA is a public benefit corporation that’s supposed to be supplying a badly-needed public good. To a certain level, we can and should ask the MTA to streamline their revenue sources and eliminate waste and redundant spending. But on the other hand, the political bodies ultimately responsible for establishing this PBC and overseeing something as basic as transportation have to come through with the money.

As I see it, there are two things that can solve their problem, and I don’t believe that either are politically feasible.

One would be a Keynesian mechanism, funded at the federal level, that would kick in every time that there is a downturn to fill the budget gap. While I could see this implemented, I don’t believe that it would a safe measure. Such a mechanism would probably be perceived as rewarding financially irresponsible entities. That perception, which I imagine would have some element of truth, would make the long term viability tenuous.

The other thing that I’m thinking about is a rainy day fund. I don’t believe that this would work either. Fare hikes, which ideally would happen in good times, would be far more difficult to implement when the size of the rainy day fund is reported in the press. Another problem is union negotiations. The unions will look at the rainy day fund as their booty. When the rainy day fund is actually needed, I doubt that much will be available.

In addition to new or better funding sources, greater operational efficiency will free up funds. The greatest savings, of course, would come from improved work rules, such as the eventual elimination of conductors. There is an additional benefit to getting such improvements. If the public sees the MTA spending money efficiently, there will be greater public support for new dedicated revenue sources.

Along the lines of greater operational efficiency, a deep dive into capital expenditures could yield enormous potential savings.

The MTA probably just needs to smooth out their revenue sources as much as possible, and simply deal with each downturn as they happen.

That isn’t to say that a payroll tax, or some other business-based revenue stream isn’t justifiable, as these businesses receive economic benefits from a well-functioning transit system. Ideally, public transit would be funded proportionately by those who benefit from it: riders, businesses, motorists, property owners, etc. Unfortunately, there is little hope that a fair and sensible funding structure would ever be considered by a legislature that understands little of the value of public transit and even less of economics.