Home MTA Economics Report: Cuomo to cut state transit funding

Report: Cuomo to cut state transit funding

by Benjamin Kabak

Governor Andrew Cuomo hasn’t ridden the subway since “last year, and now he’s planning on removing some state funds for the MTA when he unveils his budget tomorrow. According to a report in The Daily News, Cuomo will attempt to limit the cuts to “an amount the Metropolitan Transportation Authority will be expected to absorb while maintaining both the current MetroCard prices and level of service.” Color me skeptical.

Pete Donohue has the bad news:

Gov. Cuomo soon will propose a reduction in MTA funding – but he doesn’t want to trigger an increase in what riders pay to ride the subway, buses and commuter trains, a source close to the administration said. The figure will be limited to an amount the Metropolitan Transportation Authority will be expected to absorb while maintaining both the current MetroCard prices and level of service, the source said…

MTA executives cut $500 million in spending last year. About 3,500 positions were eliminated, many through painful layoffs. But the Metropolitan Transportation Authority remains in a constant state of fiscal crisis. Its 2011 budget plan has a $75 million reserve – lunch money for an authority operating the largest subway system in North America and the country’s two largest commuter railroads.

Whatever its shortcomings, the MTA’s money problems aren’t the result of corrupt transit executives, bungling bureaucrats or greedy workers, as some critics contend. There never was an illegal “two sets of books,” a myth that emerged after an ethically challenged state controller released a scathing report on MTA finances. The real shell game takes place in Albany. Much of the MTA’s funding comes from a series of taxes the state Legislature enacted over time specifically to help pay the cost of transporting millions of people to their jobs every day – a public service one has a right to expect is both safe and affordable. The state collects the dough – but doesn’t always pass along the full amount to the MTA. It quietly skims off the top and uses it for other purposes.

In my opinion, Donohue is glossing over some key facts. He’s right to shoot down the claims of two sets of book; that’s one of the more infuriating myths that just won’t die. But a bloated bureaucracy, an inflexible union and some poor contracting practices that may or may not resemble corruption are certainly to blame, in part, for the MTA’s structural and economic problems. The MTA is not a blameless victim here.

That said, Donohue hits on a few key points here. The MTA has made a concerted effort to save money over the past 12 months, but that doesn’t mean the authority can absorb another funding raid. Had Albany not removed $143 million from the MTA’s budget last year, the service cuts could have been averted. Another cut will require the MTA to scale back on either services — such as station cleaners or in-system eyeballs — or transportation service, and neither of those choices is a desired outcome. If Gov. Cuomo truly believes he can cut the MTA budget without impacting service levels or the fare structure, he may be in for one unpleasant surprise.

Meanwhile, the very idea of dedicated funding is under attack. When the state legislature approves a tax with revenues dedicated for transit, that shouldn’t be an option appropriation. Those monies should never come under attack from politicians who aren’t responsible in their other spending decisions. Money for collected for transit should always be redistributed to transit.

Advocates are worried about the impact cuts will have on the MTA’s bottom line because those cuts will be passed onto the riders. How much more can New Yorkers take before holding Albany responsible for this mess?

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Spencer K January 31, 2011 - 11:49 am

How much of an effort would it be for all riders of the Subway, LIRR and Metro North to set their state deductions to the max? I wonder how the state would manage when suddenly they’re short all their tax revenue.

Bolwerk January 31, 2011 - 1:35 pm

About as easy as it would be to make “Don’t Tread on Me” the flag of New York City?

Al D January 31, 2011 - 12:23 pm

Not surprising, actually. Combined with what I heard on the radio today about his potential, proposed education cuts, his sentiment must be one of ‘shared pain’ of cuts across the board. Thus, he would not be singling out transit.

Bolwerk January 31, 2011 - 1:36 pm

How much administrative fat could be cut, conceivably? Cuomo’s idea might not be so bad if he backed it up with more efficient managerial practice.

AlexB January 31, 2011 - 2:40 pm

What a douche. If there is a rentis2damnhigh party, why can’t we get some stronger special interests for keeping up government subsidization of transit?

BrooklynBus January 31, 2011 - 4:12 pm

Good Article. Cuomo needs to put his money where his mouth is. If he believes the amount is small enough that the MTA will be able to absorb it without more cuts or raising the fare, he needs to state exactly what the MTA needs to do to save that money.

I spent 4 years working in Contracts in the 1980s. Unless things changed, I never saw any poor contracting practices or evidence of corruption. That was one department, I thought was run well.

Andrew January 31, 2011 - 6:45 pm

That’s pretty incredible that Donohue is willing to properly attribute the blame up front. But I’m not sure how Cuomo can ensure that his cuts don’t trigger service cuts or a fare hike, especially since the MTA just went through this same exercise last year.

David Brown February 1, 2011 - 12:13 am

Here is the problem: Everyone is essentially broke: The Federal Goverment, the State Goverment, and Local Municipalities (See Nassau County). As for Tansportation, it starts with stuff like East Side Access, billions spent on extending the 7 Train to Hudson Yards, to gold-plated pensions, to the MTA wasting $1.5b on the Fulton St Train Station, and God only knows how much money has been wasted on other projects.
People will scream bloody murder, but fares must go up, and cuts must occur, in order to work on the most important projects (Those are the ones that benefit the most people, and (or) where safety issues are concerned). If you look at the current budget, there is money for the big ticket items that are currently under construction (East Side Access & Culver Viaduct/Smith & 9th St Renovation) & few smaller scale projects (Like the Hunters Point Ave Station being fixed up). But after that………. Forget it. The most needed FUTURE projects, such as the Chambers St (J&Z Station), and the West 4th St Station Renovation, and the lower level for Bergen St (Needed for an F Express), are not happening for many, many years, unless the politicians are honest about what has to be done, the MTA is willing to prioritize certain projects, and have the guts to explain why to the public, and the various unions become willing to give back in order, to create new projects that benefit everyone.

Benjamin Kabak February 1, 2011 - 12:49 am

To be fair — or accurate — many of those big-ticket items are funded outside of the MTA. Of the four major on-going construction projects — SAS, ESA, 7 line and Fulton St. — two are being funded nearly entirely by others. Fulton St. is going up on the backs of 9/11 and stimulus funding while the city is footing the entire bill for the 7 line extension. The other two projects are MTA-funded with assistance from others, but the MTA isn’t “wasting” $1.5 billion on Fulton St.; the feds are.

David Brown February 1, 2011 - 3:51 pm

The SAS is a perfect example of what I am talking about. The funding for extending it (Beyond the first two stages), is simply not there. There must be a decision about how to fund the rest of it, and of course, by whom, otherwise, the project should be scaled back, and it should be explained why. Perhaps the City can afford it, since some of their “Big Ticket” items such as the Van Courtland Park Water Filtration Plant & the 7 Train Extention are nearing completion? Perhaps private industry can take on the challange (Such as the reopening of the “Gimbels Passageway”).
I would like to see the worst of the worst cleaned up and fixed. That includes the trio I mentioned earlier (Plus 14th St IND, 20th St/Bainbridge Ave (D), Bowery (J&Z), and last but certainly not least, 21st Greens (G).

Donald DuBois April 13, 2011 - 8:42 pm

Very insightful David. Good to see you never got your hands too far off of the MTA. Look forward to chatting with you.


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