Archive for Capital Program 2015-2019
Shortly after I delved into the back-and-forth regarding potential solutions to the MTA’s capital funding woes, the latest episode in this soap opera unfolded as MTA CEO and Chair Tom Prendergast and Gov. Andrew Cuomo engaged in a very public dance regarding financing solutions. While Prendergast discussed the MTA’s commitment to cutting a few billion out of its spending plans, the Governor seemed to accept the idea that the state would have to cover around $8 billion if the MTA’s proposal falls into place. But as the dust settled, we were all no closer to understanding just how this gap will be closed.
The first move on Thursday afternoon came in the form of a letter from Prendergast in response to City and State comments issued earlier this week. He wrote to Mary Beth Labate and Anthony Shorris, agreeing to cut costs through the design-build process, but Prendergast noted that a significant funding gap of around $9.8 billion remained. It’s both admirable and telling that the MTA could trim the gap from $15 billion a few weeks ago to under $10 billion today, but that’s still a sizable gap.
To ensure full funding, Prendergast proposed a two-prong solution of sorts. First, he asked the city to contribute an additional $200 million per year over the next five years in addition to $1.5 billion for the non-Federal share of the next phase of the Second Ave. Subway. The state would then have to come up with only $8.3 billion over five years. “We believe this split is more than equitable to the City, particularly given that $22 billion of the $26.8 billion Capital Program is for projects in New York City,” Prendergast said.
A little more than an hour later, Gov. Cuomo took to the airwaves in a short interview with New York 1 to respond to Prendergast’s letter. He begrudgingly accepted Prendergast’s split of the funding burden: “The MTA divides the $9.8 billion by what they think is fair for the state and fair for the city and I could argue that it’s a little burdensome on the state. But I would accept the MTA’s numbers just to get it done and to go forward.”
He went on in this vein for a while:
Historically, the city was broke…Secondly, something like 90% of the MTA ridership is in the city and of the $26 billion in work, $22 billion of the $26 billion is in New York City. So New York City is a lion share of the riders. They’re a lion share of the assets and I understand they haven’t paid much historically, but the city’s financial condition is much different than it was and I think the MTA is asking for $200 million per year for five years. The city ends up paying a fraction of what the state would be spending, so I think it is fair and it allows us to resolve the matter and move forward. It’s a much larger number for the state, the state ends up paying $8 billion and the city would be a total of about $3 billion at the end of the day so it is, I think, more than fair to the city.
This was his way of slamming New York City — something Cuomo has done repeatedly in recent days as the relationship between he and the mayor has devolved into something you might find in a high school cafeteria. But Cuomo isn’t exactly correct. As the Citizens Budget Commission recently highlighted, the overwhelming majority of all MTA funding comes from the city. Perhaps Cuomo doth protest too much, but that’s politics.
Unfortunately, for here, the NY1 interview veered off the proverbial tracks. The host asked about Uber and then returned to the MTA. Cuomo indicated that he wasn’t keen on seeing the agency raise fares to fund the capital plan and has accepted that the state will fill a $8 billion gap. But the key question remains unanswered. Despite Thursday’s politicking, we still don’t know how the state will find $8 billion or if the city will do its part here. These are major questions that leave $10 billion in the five-year plan still unaccounted for.
So have we gotten anywhere? On the one hand, the Governor has committed to solving the MTA funding gap, and as we know, what Cuomo wants, he seems to get. But the mechanisms of the revenue streams will have to be hashed out amidst the halls of Albany and City Hall. We’re inching towards a resolution, but this saga is far from over. Cuomo is no savior yet.
Are New York City streets and, by extension, the MTA’s capital plan on the verge of becoming another victim of the ongoing soap opera/war of words between New York’s stubborn and intransigent governor and New York City’s neophyte and naive mayor? As political maneuverings and a rosier MTA financial picture make a deal more likely, the Move New York Plan, a key center piece to a comprehensive solution for NYC’s congestion woes that may finally have Gracie Mansion’s support, could be DOA if the Governor gets his way — and the Governor is going to get his way.
First, the good news. As part of its new financial plan released yesterday, the MTA has closed the gap in the 2015-2019 capital plan to a mere $12.8 billion. They’ve achieved these savings of $2.4 billion through what the agency has termed “unanticipated revenues, greater cost savings and more efficient operations.” Some of the money will go toward service enhancements; some will go toward the capital plan; and none will go toward averting biennial fare hikes.
As the MTA detailed, these savings are not reliable year-over-year sources of revenue and are derived largely from a strong economy. The agency drew in $401 million more than expected in real estate transaction taxes and cut pension expenses by $348 million. Fare and toll revenues were up while energy costs were down. “The additional funding we have announced today is a significant self-funded contribution to our extensive capital needs, but it still falls well short of what is necessary to keep our network in a state of good repair, much less to improve its operations and expand its reach,” MTA CEO and Chair Tom Prendergast said yesterday. “We hope our careful budgeting and innovative planning show our commitment to our Capital Program as we work with our city, state and federal funding partners to fully fund those needs.”
Facing an MTA with a smaller gap, though one still in need of a large sum of money, and battling concerns that Uber’s popularity, among other causes, has led to an increase in congestion in the Manhattan Central Business District, the de Blasio administration may finally be coming around on the Move New York fair tolling and traffic pricing plan. In a letter to Prendergast [PDF], Deputy Mayor Anthony Shorris recognized the need to find funding for the MTA capital plan and expressed interest in the Move New York plan. Without funding, Shorris wrote, “the negative impact on the state economy will be substantial…we cannot go back to the days of infrastructure neglect and declining service from which it took us a generation to recover.”
Recognizing that more debt and higher fares will overburden riders, Shorris noted that a the solutions on the table will “demand financial sacrifice and political leadership.” He listed Move New York first and noted other plans to increase taxes and fees that support the MTA, but Shorris also noted that, while NYC residents bear the bulk of MTA funding, the state has ultimate control. Still, he issued an olive branch to Albany. “The City is ready and willing to work with the State to develop sound, long-term solutions,” he said. “We are ready to sit down today and have a full and frank discussion about comprehensive funding options for this essential engine of the State’s economy.”
In an alternate universe, Albany responded with a wide-open embrace of Shorris’ position, noting that city residents have always supported congestion pricing if revenue is dedicated to transit improvements, but this is Cuomo’s New York. The governor’s response was nearly immediate. “Been there done that…I don’t see how it would ever pass,” he said in response to the Move New York plan. In subsequent comments, he threw more cold water on the idea. “If you think that’s going to close the gap and that’s going to pass, then I think you’re going to be sorely disappointed once again,” he said.
This is of course a self-fulfilling prophecy from Cuomo. He has the political capital and the political will to see that a Move New York plan — one that would alleviate the environmental and economic destruction wrought by congestion while funding transit — would pass Albany, and the city wants it to happen. But what de Blasio proposes, Cuomo shoots down. That’s just the way of things these days, and the dysfunctional city/state relationship has the MTA in its cross-hairs.
So what’s the state’s solution? It’s not entirely clear yet, but in a letter sent this week to the MTA [pdf], Mary Beth Labate of the New York State Division of the Budget hinted at a solution. The state is concerned that the MTA is asking for too much since they usually do not spend all of the capital money collected within the five-year plan as originally budgeted, and she suggested design-build as a way to cut costs. So the path to a deal is set: The MTA will trim some spending and projects from this five-year plan, and the state will move on….something. What that something will be isn’t clear right now, but it seems unlikely to be the Move New York plan. For that, we all suffer.
During its meeting on Wednesday, the MTA Board will vote to approve a $205 million contract with Siemens and Thales Transport for a part of the communications-based train control installation along the Queens Boulevard line. As the MTA works to pre-qualify other companies with relevant expertise, these two companies — the only two pre-qualified to bid on contracts since 2006 — will spend 67 months installing CBTC along the western part of the Queens Boulevard line. This may mean five years of intermittent service changes, but it also may lead to, as the MTA claims, a “‘state of the art’ train control system.” And we all know it’s about time.
As part of the discussion about CBTC, Transit released the video I embedded above. It explains how the stations aren’t the only part of the subway system. In fact, much of the technology is older than any of us (and nearing, or well past, the end of its useful life). It’s supposed to explain how CBTC can help increase frequency of trains along the Queens Boulevard line, but it also underscores exactly how deferred maintenance throughout the decades can come back to hurt a transit agency.
For decades, the New York City subway system was a victim of politics. It initially operated as a quasi-private business overseen by the elected Board of Estimate with fare policy set not by the operators but by politicians who had to answer to constituents. So the five cent fare lingered and lingered and lingered, even when it became obvious that the transit operators couldn’t run the system breaking even, let alone generate revenue to keep up with technology innovation. This was a repetitive cycle until the MTA came into being in 1968, and the nascent agency had its work cut out for itself.
Since the early 1980s, the city, state and feds have poured billions of dollars into restoring some semblance of investment in the transit system, but the backlog was tremendous. Nearly since its founding, the subways hadn’t undergone top-to-bottom overhauls, and the early money was spent on upgrading rolling stock and restoring stations to a usable state. We’ve had massive track replacement and big-ticket capital projects too, but the signal systems have lingered as a relic of history. Now, the MTA is trying to play catch-up, and it’s going to take a long time.
Elsewhere, transit agencies can focus on technological upgrades without having to sacrifice other projects in part because costs are kept under control. Paris, for instance, can fully automate subway lines quickly as they’re working from a base of newer equipment and shut down the system at night. They don’t face the same labor and corruption issues that New York hasn’t been able to combat.
As you watch the MTA’s nine-minute video, think about how the choices we make today reverberate for decades into the future. We need a state-of-the-art subway system now because it’s the system we’re leaving to our children and grand-children. It has to function then at least as well (or perhaps as poorly) as ours does today. And that incremental $200 million investment for a part of the Queens Boulevard line doesn’t even begin to cover it. Now does anyone want to close that $15 billion capital program gap?
Back in October of 2010, then-gubernatorial candidate Andrew Cuomo let slip a few words on the MTA and transit funding. It was a rare moment of transportation candor for a candidate who hadn’t even acknowledged the MTA existed throughout much of the summer, and his comments then certainly ring true through his actions today. Without giving details on sources of transit funding, he said, “There’s going to be a number of revenue raisers. The instinct is going to be to say ‘more money more money more money.’ I understand that. Part of the discipline I want to bring is a fiscal discipline to the state and the MTA. The answer can’t always be more money.”
Flash-forward five years to today. The MTA is mired in another economic crisis, this one on the capital side, and after years of doing nothing, Cuomo is still simply doing nothing. Funding proposals, some more politically challenging than others, are awaiting action, but the Governor is content simply to parrot himself. In comments earlier today, Cuomo reiterated his tried-and-true line. The MTA’s problems, he said, will not be addressed with “more money more money more money.” Considering that the MTA’s problems are a distinct lack of money, it’s bold to shoot down the end result before even tackling how to get there, but that’s Cuomo for one.
On the one hand, Cuomo is accidentally right. The solution to the MTA’s problems shouldn’t just be only more money; it should also involve an aggressive attempt at getting capital construction costs under control through some combination of union-focused work-rule reform, a better bidding process and a concerted effort to understand why transit construction costs in New York City are exponentially greater than anywhere else in the developed world. But on the other hand, the solution will involve more money, and Cuomo’s new-found fiscal restraint is stunning considering his past actions.
As recently as April of 2014, the MTA had a chance to address some of the sources of its rampant costs as negotiations with the TWU over a new contract lingered unresolved, but Cuomo needed the support of labor in what was then his reelection campaign. So, by all accounts, as is his wont as the agency’s ultimate boss, he pushed the MTA to accepte a contract very favorable to its workers. The MTA exacted no work-rule reform or other staffing concessions that could have led to cost savings. Now, faced with a $15 billion gap, Cuomo’s answer is to withhold funding or any solution.
I’m not keen on giving the MTA a pure blank check for capital costs without reform, but Cuomo’s faux come-to-Jesus moment on the MTA’s cost woes is 18 months and a few billion dollars too late. Plus, he needs a new line. “More money more money more money” is going to be the answer in the end.
Over the weekend, Dan Rivoli of the Daily News wrote a feature on the MTA’s capital funding woes. For the transit literati, Rivoli’s piece travels no new ground, but it’s an important one for the debate and discussion over the MTA’s funding. While Gov. Cuomo shows no willingness to act before the legislative session ends in two weeks, Rivoli’s piece allows the MTA and its supporters to drive the conversation and keep the pressure on the governor to respond.
In the piece, Rivoli runs through the laundry list of projects the MTA can’t see through in the short- and long-term if the funding doesn’t materialize. Future phases of the Second Ave. Subway would be in jeopardy; rolling stock upgrades would be delayed; countdown clocks, a MetroCard replacement and other technological upgrades wouldn’t be funded. The money would go toward maintaining the current system and generally keeping the trains running without allowing the MTA to meet demands of high ridership and a growing city. “The status quo,” Allen Cappelli, an MTA board member, said to Rivoli, “is not good enough.”
Of course, Cappelli is right, but the more I thought about it, the more I thought about how right he is, capital funding or not. Right now, today — and especially during the weekend — the status quo isn’t good enough. The Daily News published Rivoli’s article on Saturday night, a few hours after I had gotten a text from my sister complaining about a 20-minute wait, with no announcement of a problem, for an N train on Saturday afternoon. It was also a few hours after I had to wait eight minutes for a 4 train at 7 p.m. and when headways were nearing 10 minutes on Brooklyn-bound 2 and 3 trains. It came after a week during which I saw similarly lengthy headways during peak-hour, mid-week service and at a time when it’s getting tougher to find seats on just about any train on a weekend.
The MTA has long maintained that service is good enough. But recall that they changed their own internal load guidelines back in 2010 so that a line isn’t eligible for more service until a quarter of a subway car’s off-peak passengers are standing. If we’re not there yet, we’re getting awfully close. These load guidelines, meanwhile, lead to longer waits and generally disgruntled riders.
As many of you know, I spent much of May traveling. I rode the U-Bahn and the S-Bahn in Berlin, the Tunnelbana in Stockholm, the CTA’s subways in Chicago and Boston’s T. The longest waits I’ve had for a train during mid-day, off-peak and peak hours have all been in New York City. If that’s the status quo the MTA is seeking enough money to maintain, the status quo is not good enough.
It’s hard to say what the best solution is. Any increase in service involves massive costs in that the MTA would need to hire more employees (already a source of lost cost cavings opportunities thanks to Cuomo’s utter capitulation to the TWU last year), buy more rolling stock, and upgrade the signal systems. Running more frequent four- or five-car sets during off-peak hours could solve some of the problems associated with headways but not necessarily address the issue of crowding. And of course, without action from Albany one way or another, the money to improve the not-good-enough status quo isn’t there.
The MTA certainly isn’t wine and roses. They bleed money on capital side at rates well above any comparably system or city throughout the world and haven’t shown much willingness in recent years to push for OPTO or ATO measures that would save oodles of money. The governor isn’t listening to its leaders or the people of New York who need investment in transit, and we’re stuck with this insufficient status quo. If you think too hard about the future, it’s not necessarily a pretty picture, and it’s one New York, Albany and the MTA may be rushing headlong toward.
As Denise Richardson, the head of the General Contractors Association said to the Daily News, “We’re violating one of those cardinal principles of long-term capital planning, which is to take a long-term view and not just be responding to the emergency priorities.” Waiting for the emergency will mean it’s already too late.
Gov. Nero is fiddling while Rome’s subway system is burning, but some New York City lawmakers aren’t taking it sitting down. Assembly representative James Brennan, architect of a plan to fund the MTA’s capital plan, has penned a letter to the Governor asking for resolution. Streetsblog posted the letter [pdf], and Brennan secured 24 other Assembly members and 10 State Senators as co-signers.
Brennan and Co. do not hold back. I’ll excerpt at length:
While this proposed statewide capital program represents a significant number, it still falls far short of what is generally acknowledged by the comptroller and other transportation experts as what is needed to keep New York’s most valuable economic asset—its unparalleled $1 trillion transit system—in a state of good repair and to continue modest expansion. It also must be considered in the context of its broader value to the economic health of its service regions with more than 14 million people, seven million workers and one that generates $1.4 trillion in GDP. Moreover, maintaining transit systems across the state contributes significantly to the upstate economy, given the number of suppliers and value-added services that exist in upstate New York to support the transit capital plans.
The MTA’s daily ridership of 8.6 million has reached a 65-year all time high and is putting significant strain on the system. The Lexington Avenue subway alone carries 1.3 million people a day, exceeding the ridership of San Francisco, Chicago and Boston combined. The pressure on the MTA’s physical assets to serve this increasing ridership is starting to show, with equipment and facility-related train delays on the rise. Between October 2013 and October 2014, nearly 25% of all subway trains were late. Metro-North and Long Island Rail Road have similarly struggled in managing their aging assets.
A fully-funded, five-year statewide capital plan will have far reaching impacts for the entire New York metropolitan and upstate regions, regardless of which borough or county one calls home. It will fund the purchase of modern buses, subway cars and commuter rail cars; the installation of computerized signals to increase capacity and reduce crowding; safety measures such as new subway track to prevent derailments and Positive Train Control to keep commuter rail passengers safe; and rider information like countdown clocks and “BusTime” technology that will help bring New York’s largely outdated system into the 21st Century and closer to on par with the world’s other leading cities.
Our transit agencies have experienced a decrease in federal, state, and local monies for far too long. If new sources of funding are not identified soon, agencies will be forced to raise fares and tolls or reduce service to pay for much-needed infrastructure needs—taking more money from the pockets of millions of daily riders, many of whom have no other transportation options. Viable funding options exist to support these initiatives, and the time is now to take action.
These lawmakers want action during the 2015 legislative session — which ends in less than a month. This is a direct challenge to Cuomo and the loudest one he’s received on the MTA’s capital plan so far. Will he act? I wouldn’t put money on it, but the pressure is mounting as days on the legislative calendar melt away.
When I was in Berlin last month, I stayed close to Unter den Linden, a wide boulevard that connects the former East Berlin to Museum Island and runs through the Brandenburg Gate where it becomes Strasse des 17. Juni as it passes through the Tiergarten. It’s a wide boulevard, and it’s the site of the German capital’s own transit megaproject. For €433 million, Berlin is building a 2.2-kilometer, 3-station U-Bahn extension that will finally join the U-5 with its U-55 progeny. Much like New York City, Berlin has had some issues delivering on-time projects, and this one is set to wrap in 2019. Still, the price is very, very right.
In New York City, meanwhile, the MTA maybe might open the 7 line extension — all $2.4 billion worth of it — before the end of the third quarter of 2015, but a City Council hearing today, MTA officials noted that the project could be delayed until October. The MTA is beginning dispatch training and teaching train operators how to run 7 trains from Times Square to 34th St., but the opening date won’t be announced for “several weeks,” according to MTA Capital Construction head Michael Horodniceanu. “We are in the final 50-yard sprint of this project,” he said.
The timeline is almost besides the point. The MTA is getting a little bit more track than Berlin and two fewer stations for nearly six times the cost. It’s stunningly disproportionate, and the 7 line isn’t alone. It’s not the most expensive subway project in the world on a per-mile basis because the 2nd Ave. Subway is. (The costs decrease a bit on a per-passenger basis, but the MTA’s cost scales are inexplicably high.) The MTA doesn’t talk much about these high costs and, tangentially, their inability to deliver anything on time, but well-positioned politicians have taken note of these issues.
On Monday, in an attempt to convince the City Council to up its contributions to the MTA’s underfunded capital plan, agency CEO and Chairman Tom Prendergast faced a sometimes-provincial, sometimes-on point City Council. After clearly laying out the agency’s financial issues, Prendergast heard from some council members who demanded, without funding, as Ydanis Rodriguez did, a subway from 207th Street in Manhattan to Fordham or from those who don’t understand that capacity increases require investment in the form of hundreds of millions of dollars to implement CBTC. (Ryan Hutchins at Capital New York summed up the hearings.)
But Prendergast, hat in hand, also faced some witheringly accurate criticism regarding the MTA’s project management skills. A certain line of argument came from Corey Johnson, the council member who represents the Hudson Yards area. Noting the 7 line extension delays, Johnson said, “It doesn’t inspire confidence” in the MTA’s ability to pull off large-scale projects. He didn’t even discuss costs (as expected since costs can be esoteric and don’t make for great sound costs).
All in all though, this gets us to the MTA’s credibility gap. We know they can’t manage costs, and we’ve seen how they manage timelines. Every few weeks, the opening date for the 7 line extension has been pushed back so that, if revenue service begins in October, it will have been 22 months since Mayor Bloomberg’s ceremonial first ride. Meanwhile, the agency continues to insist the Second Ave. Subway will open in December of 2016, and the P.R. blowback if they miss that date will be tremendous.
Overall, the MTA’s problem is one that affects its allies too. I want to argue vociferously for the MTA Capital Plan, but the agency needs to get out in front of these cost and time management issues. They have to assuage critics and proponents alike that they (a) recognize the problem and (b) are working to resolve it. Why does the Second Ave. Subway cost orders of magnitude more than similar projects throughout the developed world? We don’t know, but the MTA should be working its collective tail off trying to lower costs for future phases. Instead, their funding request includes $1.5 billion for a Phase 2 build-out with an indeterminate budget. That does not, as Johnson said, inspire confidence.
There’s no doubt the MTA needs funding for the capital program. The alternative is bad service and high fares without technological advancements. But until the MTA can be efficient with its spending and deliver projects on time, politicians will have arrows in their quivers they can use at will. And can you really blame them?
So, did you miss me? There’s nothing like coming back with some bad news.
Since I’ve last had an opportunity to write up more than just the weekend service changes and a kitschy YouTube video on subway delays, I’ve been to Berlin, Stockholm, Chicago and Boston. I’ve ridden on a variety of transit systems, some better and more integrated than others, and I’ve had a whirlwind month of May as I prepare for my wedding in less than two weeks. I’ve missed a good amount of transit news too, and I’ll try to recap everything that’s happened in my absence, as well as provide some thoughts on those other systems I rode, over the next few days. Still, despite the three-week gap, the big story — the MTA’s 2015-2019 capital plan — may in fact be worse for the wear than it was before I left.
The sad reality is that, as June dawns and New York’s lawmakers gear up to end their 2015 legislative session, Albany is unlikely to address the gaping $14 billion hole in the MTA’s capital plan. This utter failure in leadership comes amidst a period of record subway ridership and clear signs that the MTA needs support to both keep pace with demand and continue to grow to meet future needs. So far, the details on this development are slim, but Kenneth Lovett, the Daily News’ Albany bureau chief had a brief report on this latest development.
New York state leaders are set to slam the brakes on the cash-strapped MTA’s push to fill a $14 billion hole in its $32 billion capital plan, the Daily News has learned. Several lawmakers say the political will is not there to address the issue before the legislative session ends later this month.
The Metropolitan Transportation Authority has been looking for help from state, federal and city governments as well as the private sector. The agency says failure to fully fund the 2015-2019 capital plan could imperil such projects as the next phase of the Second Ave. subway line construction, improvements to rails, switches and stations, and the purchase of new subway and commuter trains.
MTA officials vowed to continue to press for the needed funding. “This is the highest priority for the MTA and we’re going to continue pushing it with everyone we can,” agency spokesman Adam Lisberg said. MTA Chairman Thomas Prendergast and other agency officials have been meeting regularly with Gov. Cuomo’s office and members of the Legislature to try to come up with a plan to fill the $14 billion gap. But they’ve been unable to get the issue placed on the front burner of the end-of-session agenda.
If the political will isn’t there now, it’s hard to see just when the will may arise. There’s been growing support for the Move New York fair tolling plan — support that hasn’t materialized since the now-disgraced Sheldon Silver torpedoed then-Mayor Bloomberg’s congestion pricing plan in a closed-door session in 2008. Plus, in April, James Brennan had seemingly prepared to put forward his own plan to fund the capital program through gas and income tax increases and more contributions to the city. (City contributions remain a very controversial issue as the MTA, Mayor Bill de Blasio and Comptroller Scott Stringer have been duking it out in recent weeks, but more on that in a day or two.) None of these efforts have led anywhere, and the city’s 8 million daily bus and subway riders will be left with an uncertain future.
For now, the MTA’s ongoing projects aren’t in jeopardy. Nearly all were funded under previous capital plans, and the agency can still tap PAYGO resources, albeit at higher interest rates than otherwise would be available if Albany were to act. But down the road, if Albany continues to fail to find the political will to address the imperative needs of a majority of New York City residents and workers, the MTA will have to turn to fare hikes, service cuts and scaled-back plans. That means no future phases of the Second Ave. Subway, no MetroCard replacement and no signal system upgrades while the Mayor can forget about his unfunded plan for a Utica Ave. subway.
It’s not surprising to hear Albany suffer from a lack of political will. Over the past few months, the state’s Assembly Speaker and Senate Majority Leader were arrested in corruption probes; the governor doesn’t show much outward support for transit; and the mayor has his security team drive him from the Upper East Side to Park Slope so he can go to the gym. While voting constituents need the subways, politicians who drive at a rate disproportionate to the electorate don’t understand the role the transit system plays in the city’s current and future success. So here we are in June, no closer to answer to a giant gap than we were in March, January or last November. The more things change indeed.
As far as bargaining chips the MTA can use for leverage in discussions over capital funding, the MTA’s options are few and far between. Short of kidnapping a bunch of customers and hiding them in the station shell at South 4th Street, MTA officials can only make noises about potential options. We heard about steep fare hikes yesterday, but those aren’t the only trump cards the agency can play. How about big-ticket capital projects?
During the same press conference at which he promised not to raise fares to delivery capital funding to the cash-strained MTA, agency head Tom Prendergast spoke about what may need to go in the capital plan if funding doesn’t materialize, and of course, the namesake of my site came up. As part of the five-year spending plan, the MTA has requested $1.5 billion for the Second Ave. Subway. This line-item isn’t without controversy as the MTA hasn’t put a dollar figure on Phase 2 in over decade and wants a large sum for initial construction set to begin in the last year of the proposed five-year plan.
Still, the MTA knows the Second Ave. Subway won’t cost less than $1.5 billion, and the agency needs this money to keep momentum going. When Phase 1 of the Second Ave. Subway opens, the rest of the East Side will clamor for more segments of this line. It’s going to be that much of a game-changer for people that this phased approach is likely to be viewed as a mistake (if it already isn’t).
But as is the MTA’s wont with in-demand projects, the Second Ave. Subway makes for a potential liability and lever. In speaking on the impact of no funding solution earlier this week, Tom Prendergast said, as Capital New York reported, that future phases of the project could be “put on hold.” Isn’t that exactly what Sheldon Silver wanted when he forced the MTA to break one subway line into quarters?
The MTA can’t really afford not to build out more of the Second Ave. Subway. After all, phase two northward to Harlem and 125th St. is the part that will truly alleviate capacity constraints along the Lexington Ave. line. But threatening the future of the Second Ave. Subway is indeed something the MTA can do. Much like Prendergast or his underlings can discuss fare hikes, so too can the MTA boss talk about putting capital projects on hold. The more he discusses this in the context of Albany, the clearer it becomes that someone is responsible for holding up discussions surrounding badly-needed subway extension plans. I don’t love using the Second Ave. Subway as a bargaining chit, but if it forces legislators to the table as the days tick by, that’s better than the alternative.
Meanwhile, to show progress and perhaps to force a reckoning over this capital funding issue, the MTA released a series of photos from inside the Second Ave. Subway construction area. The agency maintains that the new stations will open for revenue service by the end of December of 2016. That gives the agency a full 20 months from today to realize this goal. The clock is ticking, and the delays at 34th St. and 11th Ave. along the 7 line loom large. Click through for some photos and check out the full set in this PDF presentation. Read More→
For all of its troubles, politically and economically, the MTA always has a trump card in its back pocket. If nothing happens with regards to the multi-billion-dollar hole in its capital plan, the agency can always look to fare revenue for a potential source of income. The agency’s leaders know they have a captive audience of New Yorkers who have to come to rely on the subway system now more than ever; they know they can jack up tolls; and they know it gets the attention of those in Albany when the dreaded phrase “fare hikes” comes up in the public discourse.
Earlier this week as yet more time passed with nothing happening with regards to the MTA’s 2015-2019 capital plan, agency officials started talking about fare hikes and boy did it start something in the halls of power. During committee meetings on Monday, MTA CEO Bob Foran confirmed what anyone in the know already knows: The MTA could close its capital funding gap by issuing more debt which would incur higher operating costs in the form of debt service which would be covered by … fare hikes.
“If we do not receive adequate funding to carry us through the next two years, we don’t have sufficient funds to keep the program going. At some point, the board may take action and the action that they really only can turn to would be one that addresses fares and tolls,” Foran said.
He explained that fare hikes to cover the gap could top 15% — a far cry from the current rate of around four percent every two years the MTA has implemented. Meanwhile, Foran wasn’t the only one crying foul. Jeffrey Kay noted similar concerns. “If they don’t do anything in the next two months, we have a freight train coming at us,” he said. “This is a real problem, and it’s not just going to impact the MTA. It’s going to impact the riders, it’s going to impact the workforce, it’s going to impact the construction unions, and it’s going to impact jobs…This is a real serious issue, and I don’t know what we can do in order to tell our partners that this is real.”
A day after the meetings — clearly on orders from Gov. Andrew Cuomo’s office — MTA CEO and Chairman Tom Prendergast released a statement backtracking on his colleagues’ assertions. ““Yesterday’s mention of a potential 15 percent fare and toll increase,” Prendergast said on Tuesday, “was a hypothetical answer to a hypothetical question. No one has proposed we pay for our capital needs on the backs of our riders, and no one is considering it.”
He reiterated those sentiments on Wednesday following the MTA’s full board meeting. “We have never, ever closed the capital program on the backs of the fare payers. That’s unconscionable. That’s not our desire. That’s not what we’re going to do,” he promised, again sounding as though the governor’s office had turned the screws on him.
Prendergast doth protest too much as the truth is that few options are even on the table. James Brennan’s proposal hasn’t moved much in the two weeks since it was introduced, and more troubling is recent borough-based opposition to the Move New York plan. A group of Queens Democrats, including the usually transit-friendly Assembly rep Phillip Goldfeder and Borough President Melinda Katz, issued a statement in opposition to Move New York because they claim it is “unfair” to Queens and “lacks any promise of returns.” How they drew this conclusion is beyond me, but their statement is far more damaging to transit in New York City than these politicians realize.
Goldfeder tried to defend his position to me on Twitter. He claims to be concerned that Move New York doesn’t “address transit starved communities,” but without the dedicated revenue, the MTA doesn’t have the money to begin to implement improvements. It’s not even a Catch-22; it’s just common sense — something I usually expect from transit allies such as Goldfeder and Katz.
Overall, without Queens’ Democrats, Cuomo isn’t likely to embrace Move New York, and without Cuomo, Move New York — along the $1 billion that come with it — is dead in the water. Thus, we circle back to the MTA’s fare hikes. They’re a threat and a political cudgel the MTA can use to get attention, but they also shouldn’t be dismissed. Fare hikes are, after all, the only way the MTA can guarantee revenue for itself, and if New Yorkers don’t like the idea of a 15 percent hike, I know a bunch of politicians in Queens who deserve to bear the brunt of any complaints.