Home Capital Program 2010-2014 Can the construction industry save the MTA’s capital plan?

Can the construction industry save the MTA’s capital plan?

by Benjamin Kabak

Support from the construction industry could help the MTA's capital plan receive full funding from the state. (Photo by Benjamin Kabak)

When it comes to interest-group politics, the MTA’s likely allies often aren’t as supportive as they should be. The authority’s various labor groups spend more time fighting against the MTA than for it and seemingly refuse to recognize that a fully funded MTA would lead to more jobs for unionized workers. The construction industry too has been largely silent as project management and budgetary control have come under fire. Why would contractors, after all, want to attach their names publicly to infrastructure investments that aren’t on time and are routinely over budget?

Now, though, the slumbering giant could be waking up. The construction industry in New York City has always leaned heavily on public investment and the state’s authorities for much of its work, and as the real estate economy is slow to rebound, the New York Building Congress’ future may depend upon the fate of the MTA’s five-year capital plan. In its latest New York Construction Outlook report, the NYBC anticipates a rebound in construction spending — but only as long as the MTA keeps doling out the dollars.

The report is, unfortunately, available for NYBC members only, but the Congress has issued an extensive press release detailing its findings. This year, the NYBC anticipates just $23 billion in construction spending, a drop of 23 percent since 2008, but if the MTA remains economically healthy, that number could climb to $28.6 billion by 2012. “The 2012 projection, however,” the organization said, “is tenuous, given that most of the forecasted increase will not materialize unless the Metropolitan Transportation Authority is able to secure new funding for the capital projects it has proposed for 2012.”

The report stresses the importance of government spending with a special focus on the MTA. “All eyes are on the MTA,” NYBC President Richard T. Anderson said. “The cash-strapped agency accounts for approximately 25 percent of the 2012 forecast, yet its five-year capital program is only funded through next yea. While the MTA’s projected $3.5 billion in 2011 capital spending seems secure, it is uncertain how much of the $7.6 billion in planned 2012 spending will actually materialize.”

The organization’s chair echoed those comments. “The MTA’s financial woes are a cause of great concern for the region,” Peter Marchetto said. “A fully-funded capital program means greater regional mobility, a more robust economy and middle-class construction jobs. According to our estimates, more than 18,000 construction jobs would disappear from the 2012 forecast if the MTA is only able to maintain capital spending at 2011 levels, rather than fully funding its current five-year plan.”

What brightens my mood, though, is the New York Building Congress’ clear commitment to the MTA’s capital plan. The report recommends the following:

A concerted effort must be made among all stakeholders, including the City, State, transit advocates and the building industry, to secure additional funding for the MTA’s capital plan. Potential vehicles include the long-delayed reauthorization of the federal surface transportation program and adoption of new sources of dedicated revenue, such as congestion pricing or East River bridge tolls.

Hallelujah. Political support!

The New York Building Congress is, of course, a self-interested industry group, and its constituents want the MTA to have money because then they’ll get that money in return. We have to engage in the Faustian bargain of the supporting the people who are responsible for construction delays and engineering nightmares.

Yet, we also can’t and shouldn’t discount the influence of the construction industry. The New York Building Congress is a potentially powerful ally for the MTA and transit advocates in the region. If they can reach the right people in state government and convince the right politicians to support the right projects, the MTA and transit riders throughout the region will stand to benefit. Politics might make strange bedfellows sometimes, and while I’d want the construction industry to better budget and plan its transit projects, without it, we might not have any capital transit projects at all.

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JebO October 28, 2010 - 1:43 am

The authority’s various labor groups spend more time fighting against the MTA than for it and seemingly refuse to recognize that a fully funded MTA would lead to more jobs for unionized workers.

Exactly! The teachers union spends its resources fighting for state school funding. When it comes to fighting for transportation funding, the TWU is off on its own little pointless crusade attacking the MTA or quixotic efforts aimed at Federal dollars.

Alon Levy October 28, 2010 - 2:37 am

The problem with relying on the construction industry is that what we view as costs, it views as revenue.

Marc Shepherd October 28, 2010 - 9:38 am

It would be nice if there were citizens’ groups lobbying hard for the MTA, but we don’t have those either. The closest thing is the totally ineffective Straphangers, which (like labor) more often bills itself as an MTA opponent, rather than an ally.

Alon Levy October 28, 2010 - 11:48 pm

You’re right that Straphangers could be (much) more effective. But ultimately, the political will to support mass transit depends on how cost-effective transit is. Higher costs offset any benefit coming from construction industry lobbying by reducing the general public’s level of support.

Heoh October 28, 2010 - 1:15 pm

I don’t see how that is a “problem”. The most powerful lobbyists are those with heavy vested interest in the outcome, and that means money. I.e. public unions will lobby for things that will benefit themselves regardless of how it affect the government’s budgets, etc.

No citizens’ lobbyist group can muster nearly as much strength as something like the construction industry can, and to get something done in this country, unfortunately you really do need a whole lot of money and power.

Gary October 28, 2010 - 9:09 am

“The authority’s various labor groups spend more time fighting against the MTA than for it and seemingly refuse to recognize that a fully funded MTA would lead to more jobs for unionized workers. The construction industry too has been largely silent as project management and budgetary control have come under fire.”

Exactly what we’ve been missing. Allies with deep pockets. Transit advocates need political muscle if we’re going to realize any of our dream projects . . . and avert nightmares.

Andrew D. Smith October 28, 2010 - 10:20 am

The relationship between transit supporters, transit workers and construction companies is way more adversarial than you make it out to be. Indeed, one of the reasons our transit systems are in such dire straights is that transit supporters have, for so long, wrongly assumed that workers and builders were their allies: Hey, we all want to spend more money on transit, so we’re all in this together!

The problem is, you all mean different things when you say you want to spend more money on transit. Transit advocates who want to spend money on construction actually want new trains, tunnels, etc. But the more efficiently builders work to give you those things, the lower the percentage of total expenditures that goes to them as income. And income is what they’re looking to maximize, not transit. To the contrary, the more transit they provide with a set amount of money, the less they make.

The same is true of transit workers. They want more money for transit not to improve service but to let three people do the job of one.

It’s not a completely adversarial relationship, however. Builders and workers realize that they cannot funnel all the money to themselves so that there is no public transit system — or else no one would agree to fund it. They have to balance sacrificing some money in the sort term to produce things the public wants — new projects, continuing service — in order to entice the public into investing maximum dollars and maximizing their welfare over the long run.

But that balance, the one that maximizes their welfare, isn’t the one that maximizes transit or anything like it. It is, as we have seen in America since WW2, a balance that makes real transit expansion and improvement nearly impossible and directs people toward cars. Builders may be your allies on specific issues, like funding, but they are not your allies.

John October 28, 2010 - 10:38 am

Of course, on mega-infrastructure projects like SAS or the Hudson Yards extension of the No. 7 train, your pool of companies that can do the work is whittled down to a select few, especially since subway construction has gone from cut-and-cover to deep-tunnel bore/station excavation (i.e. — it’s easier to build a high-rise or a highway than it is to hollow out the Earth eight stories underground, so you’re going to have more companies in the mix).

That means for the bulk of the construction firms, unless they have some way of snaring a sub-contracting job for electrical, sewer/water, etc. once the hard stuff is done, the large-scale MTA projects are out of their orbit, and the less likely they are to join as lobbyists for additional capital funding.

Benjamin Kabak October 28, 2010 - 10:42 am

Don’t underestimate the impact of the smaller, more routine projects though. The number of contractors or subcontractors who can contribute to station rehabs is significantly higher than the number who can help out on SAS/7 line.

Bolwerk October 29, 2010 - 5:13 pm

Kind of off-topic, but probably another problem with this obsession with these deep bore tunnels is how few firms can actually supply the necessary labor and capital. I would think cut and cover projects could benefit local firms much more.


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