Home MTA Economics Bloomberg punts on MTA financing schemes

Bloomberg punts on MTA financing schemes

by Benjamin Kabak

The MTA is in trouble. A creature of the state that runs the city’s most vital transportation network, it has enjoyed nearly no support for New York’s current governor, and those who have argued for its long-term health have been marginalized at best and exiled to Hong Kong at worst.

The brouhaha this week started when Jay Walder finally broke his silence on his tenure in New York. As I reported on Wednesday, he did not have kind words for the MTA’s condition or Albany’s treatment of the network. We’ve heard that Walder and Gov. Andrew Cuomo did not have a great working relationship, and Walder’s statements seem to bear that out.

Two days ago, I excerpted just a part of Walder’s statement but later learned what more he had to say. “New York, when I arrived there, was in a financial crisis,” he explained. “The system simply did not have enough money to continue to operate. The assets were not being renewed. And the infrastructure was in terrible condition. What I did was to be able to right that financial basis and to be able to put the system back on firm financial footing.”

That so-called “firm” financial footing may have been a mirage. The state stripped to the MTA of some expected dollars by reallocating supposedly dedicated funds, and a partial repeal of the payroll tax has left a good chunk of the MTA’s budget in a state of flux. Furthermore, that “firm” financial footing relied on assumptions concerning debt financing and labor expenditures that could still turn out to be far from the eventual reality.

Walder wasn’t the only one speaking out on the MTA though. More immediately, Mayor Bloomberg has joined the fray. In a press conference yesterday, Bloomberg essentially punted on helping transit secure better financing. “We gave it our best shot,” the mayor said of his congestion pricing plan. “We came up with an idea. We worked very hard to get every good-government group behind it, every union behind it, the public behind it, every newspaper behind it, and then when it got to Albany, it didn’t get passed. So I think at this point it behooves us to just stay out of it.”

Speaking directly to Walder’s comments, the Mayor elaborated: “Keep in mind, it’s all relative. When I came to New York in 1966, the subway cars were covered in graffiti, they broke down all the time, they had no signaling. Having said that, if you compare today’s MTA system here to modern systems — and I have been on the Hong Kong system — it’s an order of magnitude more modern, and that’s what we have to do. It’s a state problem. They’ve got to find the monies.”

A state problem. Even though Bloomberg appoints four of the MTA Board members and city taxes fund the MTA, finding a long-term solution has become a state problem. Ironically, that’s why the MTA first came about all of those decades ago. Somehow, the city had to remove politics from transit fare policy, and a state agency that could reappropriate road tolls to fund transit while unifying Metro-North, LIRR and NYC Transit seemed the way to do it. It no longer seems to be working.

If it’s a state problem then, the state should do something, but instead, we have a governor with no real appreciation for transit. After avoiding much mention of the MTA in his State of the State speech, Cuomo drew heavy fire from transit advocates.”While the Governor is right to call for greater investment in infrastructure, Albany cannot continue to give short shrift to funding transit across our state,” Transportation Alternatives Executive Director Paul Steely White said. “Public transit projects create a jobs dividend that stretches from the five-boroughs to Upstate New York. From manufacturing jobs in the North Country to construction jobs in the metropolitan area, fully funding public transit not only helps get millions of people to work every day, it creates good-paying jobs for New Yorkers.”

Ultimately, then, what remains for the MTA? The state won’t tackle this difficult challenge; top transit experts and executives willing to do so have been pushed out; and the mayor, the last public figure who could affect real change by demanding more city control of the TA, is effectively wiping his hands of the matter. It’s looking bleak out there, and those fighting for better transit know it.

“The State of New York’s public transit is poor,” TransAlt’s White said. “From Buffalo to Brooklyn, New Yorkers are losing affordable public transit options because of the fare hikes and service cuts that are the result of a chronic lack of transit funding. To protect businesses and jobs in this state, Governor Cuomo would do well to consider the millions of businesses around the state that are wed to transit.”

But is anyone else listening?

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29 comments

pea-jay January 6, 2012 - 1:44 am

The problem is more than MTA-specific. It affects anything that Albany has some oversight over. Too bad the state constitution cant be easily rejiggered to give NYC more home rule. Basically cut Albany out of the process for any decision that impacts city finances, property or regulatory oversight within the five boroughs. That way we could have congestion pricing and whatever else is in the city’s interest crafted right here at City Hall

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Alex C January 6, 2012 - 3:13 am

And any state constitution change has to go through Albany. We’re pretty much trapped. NYC is to NY State what blue states like NY are to the USA: Paying all the bills, getting scraps in return.

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Nathanael January 17, 2012 - 12:23 pm

Upstate cities feel the same way, Alex.

What IS Albany doing?

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Boris January 6, 2012 - 3:23 am

At Scott Stringer’s recent Transportation 2030 conference, Janette Sadik-Khan mentioned that the NYC DOT budget has been growing – to over $1B a year. So the “this is the state’s problem” crap is really annoying. The brouhaha over the pennies spent on bike lanes is hiding the fact that Bloomberg and City Council are spending lavishly on motorized traffic. Unless the feds or the state are suddenly being generous with highway money – highly unlikely – the only reason DOT is spending more on roads is because more city taxes are going toward roads, while the contribution to the MTA continues to shrink. Bloomberg has absolutely no excuse for pointing the finger at Albany.

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Bustadreamz January 6, 2012 - 10:52 am

Not sure if you are “for or against” bike lanes, but being an adamant lover of bike lanes, the infrastructure changes to acomodate bikes is far more beneficiary than having the extra cars going through them. The maintenance costs and health benefits from people riding more bikes is dramatically better.

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al January 6, 2012 - 1:53 pm

$1 billion does not jive with official budget that is $700-$850 million at most. Unless you’re counting DOT personnel pension contributions and other items, it down not add up.

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al January 6, 2012 - 1:54 pm

$1 billion does not jive with official budget that is $700-$850 million at most. Unless you’re counting DOT personnel pension contributions and other items, it does not add up.

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Chris January 6, 2012 - 6:54 am

Boris –

Please remember that the NYC DOT budget is a separate line item from the MTA. As such, funds can not be comingled. As a result, NYC and NYS budgetary issues prevent NYC from doing something that makes much more sense with the money – such as basic cleanup and maintenance of its subway stations.

Years ago, mass transit was valued – even in rural areas, where a bus or a train made it possible for people to connect with the world at large. Now, the bias is towards the automobile – in part, because foreign oil is subsidized. If the American public had to directly pay the real price for energy (which includes having our Navy in the Persian Gulf protecting sea lanes), there would be a rapid shift in bias towards the use of mass transit when possible.

Yes, there will always be financial waste – especially when it comes to government. Until governments are allowed to go bankrupt (like private businesses), there will be no check and balance. Privatization is no answer – it assumes that the service being provided can be turned into a profit center. And without competition, a private monopoly is even worse than a public sector monopoly – there is even less pressure to keep costs and prices low….

So how do we fix the MTA’s finances? This would be a simple problem if only NYS residents benefited from our transit infrastructure. But it benefits NJ and CT residents as well, when they come to NYC to work. And they are not taxed for the benefits of the MTA – they only pay a NYS non resident tax (without representation). Maybe we should consider a rationalization of the entire region’s transit infrastructure (including region wide fares, single “metrocard” like fare collection, and create a single multi-state agency with the power to tax in selected counties for mass transit related issues. The MTA doesn’t exist in a vacuum, this is a region wide issue that needs to be solved on a region wide basis….

Chris

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AirBoss January 6, 2012 - 8:16 am

Add MTA/MetroNorth/LIRR/NJT to PANYNJ(CT) purview.

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al January 6, 2012 - 1:58 pm

Another mega regional entity. Merge all Northeast Corridor transit/port agencies. Then merge it with AMTRAK. Soon we’ll have a Northeast TPA.

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Alon Levy January 7, 2012 - 5:40 pm

Yay, more unaccountable government. Seriously, can’t Americans ever get two bureaucracies to talk to each other without subordinating both to a third bureaucracy?

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Adirondacker12800 January 8, 2012 - 3:36 pm

They can when they want to. EZpass works all up and down the Northeast Corridor. Might even work all the way out to Chicago. I dunno, I’m not silly enough to want to drive to Pittsburgh much less Cleveland or Chicago.

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Nathanael January 17, 2012 - 12:25 pm

Notice that the MTA *never actually merged*. When an attempt was made to combine LIRR with Metro-North, *it failed*.

This is as bad, in bureaucratic bloat terms, as the Department of Homeland Security (which simply sits atop entire agencies, none of which have lost any of their bureaucrats).

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Michael January 6, 2012 - 8:28 am

You know what the biggest problem here actually is? Less then 30% of eligible voters throughout New York State bother to vote in state elections. 2011 had an all time low turnout. Why would they mention transit when no one that depends on it put them into power?

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AK January 6, 2012 - 9:12 am

I agree with the general sentiment that people are politically disengaged, but it is worth noting that the 2011 election cycle did not include Presidential, Congressional, Gubernatorial, State legislative, or Mayoral races…needless to say that will depress turnout. Somehow voting for a civil court judge in Brooklyn didn’t get people excited…

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TP January 6, 2012 - 9:06 am

finding a long-term solution has become a state problem. Ironically, that’s why the MTA first came about all of those decades ago

When the MTA was created it was the city that was broke, the city who’s government was totally dysfunctional, and the city’s economy that was in dire straights– while the state as a whole was a little better off on all three of these. The picture today is reversed.

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Douglas John Bowen January 6, 2012 - 10:07 am

Unlike the site host, I thought Mayor Bloomberg acquitted himself fairly well. He defended the subway’s current status factually (though he did use a very long timeline, that’s true) even as he acknowledged that Hong Kong was “an order of magnitude” better — for New York’s official No. 1 booster, that’s almost eating crow! Like Mr. Kabak, I’d like the mayor to try again and/or try harder, be it congestion pricing or some other vehicle. But given that Mr. Walder’s comments were in essence a media event, Mr. Bloomberg could have done, or said, much worse.

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Larry Littlefield January 6, 2012 - 10:19 am

I’d agree. Anything Bloomberg proposes, the state pols will oppose just to score points with whoever had to pay. Just like last time.

If you want to make the city pay more for transit at the expense of other things, accept my idea. The city’s contributions and payroll tax revenues collected in the city are probably somewhat less than the subsidy for the buses and paratransit. So turn the paratransit and buses, and the payroll tax revenues, over to the city and the counties. Take that burden, and the blame for the payroll tax, away from the MTA.

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Frank Borghese January 6, 2012 - 1:39 pm

…what remains for the MTA? Easy. Clean up the tremendous waste. Get rid of the multitude of back office executives making 150K or so and literally do nothing or almost nothing

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R. Graham January 7, 2012 - 5:59 am

Which is exactly what they have been doing for years now. Rome wasn’t built in a day and leaning up a bureaucracy takes an extreme amount of time when you’re discussing one the side of the MTA.

So with the MTA doing it’s part it’s time to remove the excuse that the MTA is “irresponsible and corrupt” excuse that has been talked about highly by politicians for a solid decade now.

I’ve been warning against this for years. I made comments here about the need for the city to take back NYC Transit. It’s been suggested that it’s impossible. Now state support is impossible whether you see it that way or not. No matter how you look at it. Either the state lacks money and has to take care of other things or Albany refuses to lift a finger for a entity that as perception has it does not affect them until congestion pricing has to be approved which they will not do. So now we are stuck between a rock and a hard place.

Like it or not. The only way out is for voters to start seeing the truth and voting for transit change, the city taking back what essentially belongs to it or the unforeseen tragedy waiting to happen when a section of tunnel collapses causing widespread panic, budget devastation and a load of finger pointing.

Pardon me Ochoo Cinco is calling me to the OCNN crew office to pop some popcorn. We’re going to need it for this episode.

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Bolwerk January 8, 2012 - 11:20 am

I made comments here about the need for the city to take back NYC Transit. It’s been suggested that it’s impossible. Now state support is impossible whether you see it that way or not.

I guess I agree with you, but it’s not as simple as giving the city back the transit system. The state needs to devolve control of the transit system and numerous revenue sources it’s not going to want to give up.

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Al D January 6, 2012 - 3:53 pm

What’s Mayor Mike to do? To people in the know, he erred terribly in his campaign by pledging to take on the MTA and fix transit because he had no power to do so. And he still doesn’t. Mayor Mike is powerless to effect change. That power is and was always with the state, with our newly annointed Prince (Gov) Cuomo, skeleton Skelos, and that corrupt old goat Shelly from Helly.

Those 3 men are the only 1’s who can fix transit in NYC.

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Bolwerk January 6, 2012 - 8:29 pm

I agree with Al D . I think there is some confusion here as to whether Bloomberg was making a positive or normative statement. I don’t like the truth anymore than Ben, but my take is he was simply telling it as it is, not punting. He did put up a good fight for CP a few years ago, but what would change today? With Sheldon Silver still there with Cuomo the result if he does it again will be the same – and it won’t be salted with $350M of our own money being given back by the Feds this time, either. It was a singular opportunity and the conservatives (=Democrats) in the Assembly stole it from us.

Besides, CP doesn’t even address underlying problems that only the state legislature can change at this point. Transit advocates really need to find common cause with other big picture reformists to fix this. That could mean all sorts of things, but if Albany doesn’t want to solve the problems Albany should at least give Bloomberg and the City Council the authority (and responsibility) to sink or swim on their own.

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R. Graham January 7, 2012 - 6:14 am

Let’s be perfectly clear about one thing. Silver doesn’t matter anymore. Even he finally agreed to put congestion pricing up for a vote last year if the state Senate would follow suit but when it was realized that Cuomo wouldn’t be bothered with it, all talk got put on the more unreachable portion of the shelf.

Point: Shelly got put on ice as soon as Cuomo was elected. Shelly has no means of effecting change no more than Skelos can and we know Skelos will not dare dream of fighting Cuomo with perception being that Cuomo is more conservative than the Republican controlled state Senate when it comes to upstate voters. This all falls back to Cuomo’s popularity and his control of message. He’s pushed through everything he’s wanted so far so hence if Cuomo wanted to see this as an issue and do something about it. The see no, hear no, speak no evil state legislature would reluctantly follow.

But the point is Cuomo is not going to do anything that effects his voter base up north. Those things would constitute signing legislation approving congestion pricing or giving the city the power to control NYC Transit and in turn increasing state liability on a visual scale for L.I.R.R. and Metro-North. I like a lot of the things Cuomo has done by this transit issue proves that his eye is squarely on the White House in 2016. Maintaining his moderate Democrat status means having to flip the bird to the city on a public level on a major issue that everyone else outside of NYC does not care about if you want to show that you can be electable nationally.

Sad part is I can already visualize Cuomo as the national front runner for the Democratic nomination in 2016 whether Obama wins another term or not. Cuomo started running his playbook early before any other Democrat could think of it. He ran for Governor in 2010 fully distancing himself away from Obama and his policies and his half baked endorsement. Simply put, he’s running the Pataki national plan playbook better than Pataki.

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Bolwerk January 7, 2012 - 7:41 am

Did he? I never heard that. (FWIW, he did say he wasn’t against it personally, only that his members didn’t want it. There is either a possibility it could have passed with Democratic+Republican support in the Assembly, or they didn’t want to be on record saying they didn’t want it.) But I think you’re underestimating Silver if you think he’s toothless now. He’s probably inclined to play nice.

I don’t really know what to say about Cuomo. Maybe you’re right, but I think the main issues with CP are either (1) it pisses off suburbanites, a population including some in the outer boroughs, or (2) politicians (mainly Democrats in this case) have their heads so far up their asses that they think the working/middle classes that make up a majority of New York commuters are somehow coming out ahead with “cheap”/”free” driving – driving they don’t enjoy the benefit of anyway. Obviously the suburbanites were made livid by the payroll tax, which mainly went to benefit their own (albeit, wealthiest) commuters.

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Nyland8 January 7, 2012 - 2:17 pm

History will paint Bloomberg as the Mayor who advanced the ESA – the first LIRR expansion in 100 years. It will paint him as the mayor who advanced the SAS – a much needed replacement for the long dismantled elevated train that once ran down Second Ave, and one that has been started and stopped over and over again in the last 80 years. And history will paint him as the mayor who opened up Hell’s Kitchen, the Javits Center, and possibly New Jersey, to subway access via the 7 line expansion. Considering that desperately needed mass-transit expansions have moved glacially over the last century, that is quite a legacy.

Is it any wonder that this late in his tenure he’d be willing to give up the fight?

As a New Yorker, I feel it is incumbent on all of us who live here to find a better way, a more powerful way, a more efficacious way, to leverage power against Albany. While upstaters might well argue that it amounts to the tail wagging the dog, the fact is that NYC is, by far, the biggest tail in the country. As we’ve learned yet again, in just the past few years, we’re not only the engine that drives New York State, we’re an engine that drives the world’s economy. For Albany to have so much say in what we get and how soon we get it is, in a word, insane. The best interests of this city far outweigh the interests of anything going on upstate – and mass-transit is a major interest to this city.

Short of secession, how do we wrestle from Albany the things we need to succeed and thrive? Cuomo wants to build a gambling mecca and world class convention center out near Aquaduct – with no discussion of the concomitant transportation infrastructure that will make it viable – I imagine under the delusion that if you build it, somehow they will come.

We, as New Yorkers, must find a way to communicate that his idea is putting the cart before the horse, and that pumping money into MTA infrastructure FIRST is the way to make all other things possible in New York.

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Alon Levy January 7, 2012 - 5:58 pm

I hope that history is more accurate than that. In reality, Bloomberg did nothing to promote SAS; Shelly is the one who fought for it. The ESA boondoggle is not on Bloomberg, either – that was Pataki’s pet project; both SAS and ESA were funded by agreement between Shelly and Pataki. Bloomberg’s project is the 7 extension, a disaster of smaller proportion than ESA, but a disaster nonetheless. I hope he’s remembered forever as the mayor who refused to help fund a station at 10th Avenue on the grounds that the area is already developed. I hope the only thing that’s named after him is a new wing at Rikers for white-collar criminals.

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Bolwerk January 7, 2012 - 6:35 pm

Bleh, Bloomberg is a kinda do-little mayor with a mediocre record on everything but the environment, and even that’s only better than most contemporary politicians. He hasn’t drawn attention to the problems with financing projects in this region, and hasn’t done jack about the overspending in the city. Ultimately most of the structural problems that were there when he started will be there when he leaves.

I don’t think he’s going to be very memorable, for good or ill.

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J B January 8, 2012 - 4:13 pm

Without excusing Bloomberg’s failings, the fact is there is little good that he can do for the MTA. This is a systemic problem, and there needs to be agreement throughout the state and city government that this is a problem worth solving, and on measures to start solving it. Sadly I don’t see how that can happen in NYS short of a revolution. What’s really holding us back is our system of government and our own apathy and tolerance of corruption, coupled with a lack of respect for mass transit that I think even effects mass transit activists.

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