Home MTA Politics Thoughts on the politics and possibilities behind the MTA’s Doomsday budget proposal

Thoughts on the politics and possibilities behind the MTA’s Doomsday budget proposal

by Benjamin Kabak

After the MTA’s Doomesday budget proposal in late August, more than a few New Yorkers reached out to me worried about the future of travel in and around New York City and worried about their own subway lines. These weren’t the usual gang of anti-car crusaders, the bike advocates or the busway champions expressing the daily clamor for a better, more transit-focused and equitable transportation network. Instead, these were the workers who power New York City and need the subway to get around. They’re afraid the MTA’s pandemic-related budgetary woes will cut off their transit lifelines.

“Will the MTA actually have to get rid of the D train?” one concerned straphanger asked me, clearly focusing on the Riders Alliance’ Doomsday map. What would it mean, another wondered, if headways on local buses were increased even more? Is a bus that runs once an hour during the day even worth operating? Clearly, threats of massive service cuts — more so than looming fare hikes — hit close to home.

A July Riders Alliance report painted a bleak picture of the MTA’s future.

Over the past few weeks, I’ve been thinking more and more about MTA CFO Bob Foran’s presentation and what we should take from it. Needless to say, it paints an ugly future. After all, Foran’s service cuts threatened a 40% reduction of service on subways and buses, increasing subway headways to eight minutes, cutting bus frequency by 15 minutes and axing entire LIRR and Metro-North lines, crippling to the usefulness of any transit system. To make matters worse, while the MTA stares down a deficit of $10-$12 billion, these massive service cuts save just a fraction of the billions the MTA needs. Cuts to New York City Transit would generate just $880 million annually once the MTA factors in revenue loss from riders who abandon an infrequent system, and the commuter rail cuts generate just $160 million in annually. Even running a bare bones system puts the MTA in the red each year by a few billion dollars.

What then should New York make of the MTA’s proposal? And what is the future of a robust transit system in New York City? After all, we were all celebrating the successes of Andy Byford’s Fast Forward plan, the Subway Action Plan and the massive capital investments this calendar year. Is there any hope for the future? Or are we doomed to a death spiral that leaves the subway tunnels quiet, the city paralyzed and the MTA broke?

This is the question I’ve been mulling for weeks, and it’s one with no real clear answer right now. It’s important to understand the MTA’s Doomsday budget presentation as a political document first and a budget proposal second. It was very much designed by MTA executives who think they can get the attention of the federal government and, in particular, the Senate GOP and Trump White House, by warning of the dangers to New York’s economy should the MTA fail. “The pandemic-caused losses are beyond the capacity of any agency” to absorb, MTA CEO and Chair Pat Foye said following August’s meetings. “We’re agnostic as to the source of revenue. We’re realistic to the city’s financial conditions. We’re realistic to the state’s financial conditions….We’re going to do everything we can to reduce the size of the deficit for the federal government, but without federal funding, we will not be able to get out of this box.”

The MTA’s out-year budget include billions of dollars in projected revenue losses due to the long-term impacts of the pandemic on transit usage.

One “tell” regarding the political intent of the document is the request for an additional $1 billion in 2021 to offset revenue the MTA had expected from congestion pricing. Because the Trump Administration has completely slow-walked US DOT’s congestion pricing assessment, the MTA does not know if an EIS is required or if a less onerous Environmental Assessment would be sufficient. Thus, the MTA does not have federal approvals to start congestion pricing in January, and thus, the MTA’s anticipated revenues are short $1 billion. By requesting that $1 billion now, the MTA is both sending a political message and over-asking. It’s a shot across the bow in what should be rational negotiations regarding an MTA bailout, as the feds gave following the catastrophic damaged caused by the 9/11 terrorist attacks.

The second “tell” came in the form of an op-ed in The New York Times co-written by Foye and TWU President John Samuelsen, one of transit’s oddest odd couples. Enemies at the negotiating table, the two transit titans wrote about the “five-alarm fire” facing the MTA. Citing the Grand Depression as a comparison, the two noted that even during the depths of the 1930s, transit ridership fell only by 10-12% and not 80-90%. It’s an inapt metaphor though as the Great Depression was an economic crisis and COVID-19 is a public health crisis first and an economic crisis due to the public health crisis.

Still, Samuelsen and Foye tried to get Washington’s attention. “Punishing the M.T.A. and transit systems across the country over an ideological political agenda is not only wrong; it is bad economics,” they wrote. “The downstate New York region — New York City and the surrounding area — accounts for about 8 percent of the nation’s gross domestic product. New York City cannot recover without a robust M.T.A., and the country cannot rebound economically without a healthy New York.”

But the MTA’s biggest mistake is assuming rationality. As I mentioned a few weeks ago, certain factions in Washington, DC — notably, the Senate GOP Majority Leader and the Trump White House — do not operate rationally. A rational response to the pandemic would involve bolstering state and municipal finances, including the nation’s transit agencies, to stave off job losses and economic collapse brought on by faltering transit systems. After all, the MTA is not asking for the feds to step in and cover its inefficient spending; it is asking to be reimbursed for pandemic-related revenue losses. Still, for now at least, the feds do not seem interested in staving off this economic catastrophe because, for now, it’s not their problem.

It’s not their problem because of the election in November, and that’s the big wild card. The equation in DC right now involves ignoring the local government funding crisis and punting it to the next team. If Joe Biden wins and the Democrats capture the Senate, Republicans will be powerless to oppose a funding package but can disingenuously claim to be concerned about the deficit, as they do any time they’re in the Senate majority. If Biden wins and the GOP hold the Senate, a traditional DC negotiation can ensue. If Trump wins, any rescue package will depend upon the party in control of the Senate, but a Trump win with a Republican Senate represents an outcome for the MTA more akin to the August presentation than we wish to consider. Still, the MTA’s ask is about politics right now; the pain for the riding public comes later.

The MTA has more than a few options in its pocket. I’ve written in the past about the operations savings the MTA could realize by shifting to a proof-of-payment model on commuter rail and reducing the number of employees required to punch tickets. Back in July, I asked Pat Foye is the MTA would consider a quick pivot to one-person train operations. He hedged at the time but was clearly ready for the question, stating the following:

Everything is on the table. There are collective bargaining agreements with our various unions that may have to be part of the discussions, but everything is on the table. We have not made that specific proposal to any union and what we’re focusing on is getting federal funding, one; two, reducing expenses, overtime, consulting contracts, non-personnel, non-labor expenses. We’re going to continue to do that. If the federal funding doesn’t through this year in 2020 or for 2021, the size of the deficit is going to require that everything be on the table. Things that are covered by a collective bargaining we may have to respect, and they may be the subject of negotiation which may be successful or not. The unions, on behalf of their members, are going to have very strong positions on many of these issues.

I’ll let you interpret that comment, but it’s clear the MTA has put some thought into what it would take to implement OPTO, just as they have put thought into the message they wanted to send to the federal government. I am ultimately left thinking about one of Foye’s statements. “The MTA,” he said, “is not going to shut down.” That’s all well and good, but it’s no comfort to millions of New Yorkers worried about the future of their buses, their subways and their D trains. The MTA isn’t about to cut full subway lines, but the subways could be a heck of a lot less useful if that funding doesn’t come through and soon.

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24 comments

Larry Penner September 10, 2020 - 7:30 am

MTA Chairman Pat Foye claims his agency is facing a financial “Five Alarm Fire.” The MTA requested $3.9 billion in additional federal funding. After receipt of $3.9 billion in CARE COVID 19 funding, the MTA announced they needed another $3.9 billion. Today, it is $12 billion. What will it be tomorrow? Weeks ago, it was a four alarm fire. Now it is a five alarm fire. What will it be tomorrow?

Riders and Washington are already fighting the financial fire. City Hall and Albany must do likewise. MTA Chairman Foye recently blamed Washington for a loss of $1 billion. This was based on the Federal Highway Administration not working fast enough with the MTA in completion of the NEPA environmental review process. This is necessary to implement Congestion Pricing. It is suppose to raise $15 billion for the MTA $51 billion 2020 – 2024 Five Year Capital Plan. Even if FHWA made a NEPA finding tomorrow, tolling could never be implemented on January 1, 2021. Since January, Governor Cuomo and NYC Mayor de Blasio never announced their appointments to the MTA Traffic Mobility Review Board. Details of who will pay what can never be resolved until this board is established. This process is politically sensitive. It could take many months before congestion pricing is set. Will Foye hold Blasio and Cuomo accountable for their inaction delaying implementation. This $15 billion could have solved the financial crises.

(Larry Penner — transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island Rail Road, Metro North Rail Road, MTA Bus along with 30 other transit agencies in NY & NJ)
.

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Patrick September 10, 2020 - 9:25 am

Pat Foye says “Everything is on the table.” but then also “Things that are covered by a collective bargaining we may have to respect, and they may be the subject of negotiation which may be successful or not. The unions, on behalf of their members, are going to have very strong positions on many of these issues.”

???

If one is concerned about the MTA’s finances, the union is no ally here.

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N Christy September 10, 2020 - 12:41 pm

It may very well end up in ‘de facto’ bankruptcy, no matter what the law says. Remember, you can’t get blood or water out of a stone.

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DaniBot September 11, 2020 - 1:21 pm

So is the Riders Alliance doomsday map something that can realistically happen? The slide mentions *both* a 40% reduction in service *and* increased train headways. Does “service reduction” here mean mothballing entire lines?

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Larry Littlefield September 11, 2020 - 4:47 pm

“Everything is on the table.”

The state should let the MTA declare bankruptcy — right now. Do we really want to make things worse to paper over the problems until Trump is gone, and the Democrats can be fully blamed? Until DeBlasio is gone?

Hey Cuomo, you can’t hide this until you are gone.

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OLDER AND WISER September 12, 2020 - 2:26 pm

Both blue state governors and blue city mayors appear to be operating under a working hypothesis that a Biden victory will mean federal bailouts so massive, and so frequent, that it won’t really matter whether state or local finances add up ever again.

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Void September 11, 2020 - 8:48 pm

You wan to save money and make money? Shift LIRR to toll gate fare collection instead of conductors wandering the cars like it’s the 1920s and shift the entire system to distance based charging like every other transit system in the world, including establishing swipe on and swipe off on buses.

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Trains September 14, 2020 - 8:05 pm

Why should the federal government bail out the MTA? New York State and New York City signed it’s own death warrant by arguing with the President and refusing to quell riots. The Governor’s executive orders have crippled the economy to the point that people have moved out of the state, or to Long Island and won’t return to the city in the near future.

At best, the MTA can expect to run All Local Service, and Express during the Weekday Rush Hour on the Subways while the Railroads get hourly service. The root of the MTA’s problem is that nobody likes Cuomo or DeBlasio enough to bail them out due to their grandstanding earlier in the year. The only silver lining in all this is that local and express bus ridership will increase as nobody wants to commute in the Subway during the day, or after 9pm.

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VLM September 14, 2020 - 8:26 pm

Anyone who says the city and state “refus[ed] to quell riots” doesn’t deserve to get taken seriously.

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OLDER AND WISER September 15, 2020 - 11:16 pm

VLM – If the earlier commenter’s wording “refused to quell riots” is unacceptable, please allow me to offer an alternative wording, to wit “refused to stop rioters from scaring the taxpayers away”. Once NYC’s taxpayers are gone, what will be left behind will not be a ghost town at all. What will be left behind will be a refugee camp of two and a half million impoverished survivors, but no tax revenues coming in to sustain them.

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Tim Kynerd September 15, 2020 - 3:22 am

So unconditional fealty to the president is a valid precondition for getting federal funding? That’s a new one on me.

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SEAN September 16, 2020 - 4:36 pm

Put another way – nice city you got here… it’ll be a shame if something were to happen to it.

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Tim Kynerd September 17, 2020 - 7:06 am

Well said.

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Nathanael September 18, 2020 - 4:15 am

The only rioters were NYPD, and indeed Bill DeBlasio has refused to fire the rioters within NYPD. Yes, this is upsetting people. Trump likes riots, though.

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SEAN September 18, 2020 - 9:40 am

“Trump likes riots, though.” True. They serve two uses… 1. he can turn around to his supporters & say look over there NYC is against law & order & 2. in all the madness his buddies steal as much as they can like a mafia squad.

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John September 18, 2020 - 4:57 pm

Trump was caught on audio saying he downplayed Corona as far back as February…to not upset the stock market. Trump blockedthe USPS from mailing out 5 masks to every address in America.

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DaniBot September 18, 2020 - 11:07 am

The comments on this thoughtful and timely post are just utter garbage. Can we stick to the matter at hand? Is the MTA gonna get any kind of a bailout? If it doesn’t what does our world look like?

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SEAN September 18, 2020 - 4:31 pm

Can we stick to the matter at hand? Is the MTA gonna get any kind of a bailout? If it doesn’t what does our world look like?

All fair questions DaniBot, but unfortunately as it is you cant separate the MTA’s financial problems from politics as the underlying problem originates from beyond our own borders. Of course I’m referring to COVID.

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DaniBot September 18, 2020 - 5:14 pm

A few points seem undisputed by all parties:

1. The MTA, for all sorts of reasons, is poorly run, inefficient, and a huge money sink compared to other transit agencies throughout the world.
2. The MTA requires a huge federal bailout to continue BAU.
3. New York City’s long term success depends on a well-functioning public transportation system. The country as a whole depends on a healthy New York City. Therefore, it’s in the interests of the country as a whole that public transportation in the city not die.

Seems like a good opportunity for reform, no? There are all sorts of strings you could attach to any bailout; everything from the breakup of the MTA into other organizations, massive collective bargaining agreement renegotiations, cost cutting through operational and staffing improvements already implemented by other systems (OPTO, layoffs of superfluous personnel like conductors), etc.

It’s a huge opportunity for reformers to finally force the MTA to do things the right way.

Or we could just blow things up. That sure helps everyone. /s

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Ed September 21, 2020 - 9:59 am

I am going to comment on the train service reductions, treating the proposal as a technical proposal, and not a political document, though it is a political document. This is not about the politics. I’m interested that if the MTA, which as Larry Littlefield pointed out, is close to bankrupt, has to do triage what would be the least bad way to do it.

And I think as a serious triage proposal, on which lines to cut, there is a mistake. They should keep the old IRT and BMT systems intact, and remove all the IND lines. I think specifically this means keeping the JMZ and 123 routes and removing the ACE routes.

The reasoning behind this is that historically, the IND lines came in later, so we have historical data that the IRT + BMT could “work” as a basic subway system. The JMZ, like the ACE, goes to JFK airport, and the 123, like the ACE, goes up the West Side to the Bronx. However, the NRQW and 123 connect at Times Square (and Borough Hall), and from memory there are much fewer connections between the ACE lines and the other surviving lines in the system. Also, getting rid of the G, L, and JMZ removes all subway service from a big portion of Brooklyn and a smaller portion of Queens.

I have experience with this in smaller cities and once an hour busses are useless. You really might as well not ride them. You need to bite the bullet and get rid of entire routes here. Maybe also the boroughs take over their bus routes in exchange for more financing?

On the political size, Danibot’s comment was entirely correct. Particularly, a federal bailout of the MTA should be accompanied by the Feds taking over and reorganizing the entire agency. A MTA line goes to Connecticut, so it is an inter-state issue and therefore constitutional. There is a federal interest in keeping New York functioning, but obviously the corruption of the agency is a big part of the reason for the mess. I seriously doubt the state government would be able to clean up its own agency. In the absence of a federal takeover, move the subways to the city and the busses to the cities and maybe the boroughs and separate them from the more problematic commuter lines.

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SEAN September 21, 2020 - 11:05 am

ED

There’s zero chance the ACE lines are suspended or any line for that matter. As for busses, there are routes that cross borough lines such as the Q35. Also you’re forgetting the new fare collection system being installed across the entire network over the next few years & that needs to continue to completion.

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DaniBot September 21, 2020 - 11:38 am

Sean,

Without a federal bailout there’s no other option. Same goes for OMNY. The federal government could singlehandedly shut down the MTA and grind NYC to a halt. A not insignificant number of members of Congress wouldn’t be opposed to that, just out of spite. The threat is very real. We’re entirely at their mercy here I think is Ed’s and my point.

No one knows what is going to happen, and that’s scary enough.

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SEAN September 21, 2020 - 3:13 pm

Without a federal bailout there’s no other option. Same goes for OMNY. The federal government could singlehandedly shut down the MTA and grind NYC to a halt. A not insignificant number of members of Congress wouldn’t be opposed to that, just out of spite. The threat is very real. We’re entirely at their mercy here I think is Ed’s and my point.

No we are not. There are two other options on the table & I’m serious on both…

1. denial of NYers paying federal taxes & 2. overthrowing the government peaceful or otherwise. If this is the game Washington is willing to play, we aught to be willing to measure up to the same level & not care about the consequences.

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Billy G September 23, 2020 - 4:02 am

This is a very astute move, and I’ll tell you why.
1. Make the C train terminate at 161 St and A run local north of 145 St if the track switching allows.

2. They can eliminate much of the A division track mileage for a couple of years with this move. Use this opportunity to retire ancient A division stock and convert the A division disabled trackage to B division standards when the money comes back, as well as doing all of the signal modernization and track switching links, again, when the money comes back.

3. Run the A division Bronx services all as shuttles to 149th St. until the conversions are complete.

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