All in all, shakeups like these are fairly common as new agency heads come and go. Cuomo has not been a vocal advocate for transit himself, but those in charge are doing the job. “There’s a desire for a stronger connection between the governor’s office and the MTA, and that’s not a bad thing,” William Henderson of the Permanent Citizens Advisory Committee, said to Crain’s.

©2012 Second Ave. Sagas. All Rights Reserved.

When The Daily News brought the issue to light in February, it caught the attention of some New York politicians who were, rightfully so, outraged. Now, the MTA is, as the Staten Island Advance notes, getting a temporary reprieve. In an editorial calling for the permanent elimination of the debt fee, the Staten Island newspaper summarizes recent developments:

The authority would have had to fork over $50 million in BIC over the next two years alone to borrow the money it plans to raise through bond issues. Of course, this added financial burden has meant that the hard-pressed MTA, which is required to have a balanced budget, has been forced to resort to fare hikes, service cuts and even more borrowing to fund its operations.

As Ms. Malliotakis said, “This policy was completely counterproductive as it was bleeding the MTA dry and contributing to the agency’s chronic failure to maintain adequate bus service and keep tolls and fares at a reasonable level,”

Now that wrong has been righted, however – at least temporarily. At the urging of MTA officials, including Staten Island board member Allen Cappelli, and elected officials such as Ms. Malliotakis and Assemblyman Michael Cusick, who authored legislation to eliminate the fee, Gov. Andrew Cuomo finally relented and waived the bond issuance charge for new MTA bonds, but only on those issued in 2012 and 2013 to refinance old debt.

MTA Board members have quickly called for the authority to use the savings to restore services lost to the 2010 cuts. “The MTA needs to look at the additional money from this and increased passenger revenue and invest it in restoring much needed bus and subway restorations as well as some additions to service,” Cappelli said. Meanwhile, city workers removed two bus stops around the corner from my apartment that once served the late great B71, leaving me with the feeling that these lost routes ain’t never coming back.

Meanwhile, this absurd measure by the state has been rectified for now, and as the Advance says, it should be overturned permanently. Good riddance to bad polices.

©2012 Second Ave. Sagas. All Rights Reserved.

The region, he said, needs more rail capacity. “By not building that capacity into the lifeblood of this region, which is, for better or for worse, Manhattan,” he said, “we’re gonna get sprawl. You’re going to be seeing the city moving away from its core, you’re going to get inefficient development and the west side of Manhattan won’t get that strong demand for commuters to fill up the office space that hopefully Related will be building very quickly.”

He elaborated on the need for politicians to focus more on transit as well. “The people who rely on the MTA, the men and women who are coming into their job or going out to their job, they’re not taking a car, they’re not taking a limousine, they’re not taking a taxi,” he said. “They’re taking the MTA.”

Ward hits upon a key topic here. For better or worse, the MTA is transit in the New York City region, and we’re stuck with it. So we can either work against it or work to improve it. But the real issue is that while Ward is correct in issuing this call, New York’s mayor can’t do much about the MTA. As I mentioned earlier this week, it’s a creature of the state, and the state exerts far more power over it than the city can. Maybe it’s time to have a serious conversation about returning control over the subways to the city, but we can’t go down that path without fiscal assurances from Albany. Welcome to New York transportation politics.

©2012 Second Ave. Sagas. All Rights Reserved.

This morning’s clip comes to us via Fox 5. New York’s former governor sat down with the Good Day New York hosts yesterday to talk about his upcoming role on the MTA Board. Take a gander if you have a few minutes:

For those who want to get right to the meaty part, here’s what Paterson had to say when the Fox hosts asked him about his pending appointment to the MTA Board:

You have to be confirmed by the Senate, and it’s kind of ironic because about ten years because myself and another State Senator Eric Schneiderman, who’s now our attorney general, we actually we were in an action suing the MTA because at the time the MTA had two separate sets of books, one for the public and one for their internal practices and it created a lot of mistrust with the public. What we’re trying to do now is establish the kind of policies that the people of New York could be proud of.

The emphasis clearly is mine, and his statements are more than a bit dismaying. When it comes to recent political history in New York State, the MTA has simply been unable to shake this image of having two sets of books. Despite releasing more budget data than any other state authority and making all of this information available online to the public, New Yorkers are stuck with this ten-year-old image of two sets of books. It was, as I’ve mentioned before, a claim discredited in the state’s highest court and one put forward by a comptroller who ended up in jail on corruption charges.

For the past few years, whenever any politician has cast a wary eye on the MTA, the claim of two sets of books has arisen to the forefront. Yet, it’s a claim with no foundation in established fact. The MTA hasn’t been very good — or even adequate — at spending money efficiently, but it’s been willing to show exactly how it’s spending (or, as some may say, wasting) money. It doesn’t keep two sets of books, and perpetuating this myth does nothing but harm the cause of transit in New York State.

Paterson went on a popular television show and put forward this theory as though it were fact. He also admitted that he did not know how long his MTA Board appointment would be, and he again assailed the payroll tax that he himself saw through Albany. “At one point we had to tax businesses along the MTA corridor a whole lot more than they deserved to pay. Fortunately, this new governor has put an end to that. But at the time we had to close a $20 billion deficit,” he said. That $20 billion isn’t quite accurate either as the payroll tax was designed to close the MTA’s operating budget gap and not its capital funding hole.

At this point, it’s awfully hard to take Paterson seriously as an MTA Board member. Luckily, he’ll be one of 22, and so he won’t be in a position to cause much damage. But let’s not kid ourselves: He’s as qualified to sit on the MTA Board as he was to serve as this state’s governor for two years.

©2012 Second Ave. Sagas. All Rights Reserved.

Now, as Cuomo, who hasn’t ridden the subway since before he was elected governor, has defended Paterson’s appointment (Daily News, video), the former governor has spoken out on few transit issues. His words do not comfort me and should perhaps give pause to those rushing to endorse his candidacy. In a wide-ranging interview with Capital New York, Paterson essentially shot down every transit funding proposal without offering up much in the wya of new ideas, and in fact, he seemed unfamiliar with some proposed expansion plans that have been out there for years.

Dana Rubinstein has the story:

When I asked soon-to-be M.T.A. board member David Paterson about Manhattan Borough President Scott Stringer’s proposal to revive the commuter tax, the former governor said it was “a perfectly valid concept whose life ended in 1999, and the current thinking does not accommodate it.” Asked if it was just politically unfeasible, Paterson said, “Yeah.”

But another of Stringer’s proposals did find favor with Paterson: the creation of an X line that could be built along existing rights of way connecting subways in Brooklyn, Queens, and the Bronx. “His suggestion about the train that connects the outer boroughs, I think, was overlooked,” said Paterson, adding, “And I like how he calls it the ‘X train.’ ‘Ex’ sort of meaning ‘outer’? He should change it to the ‘Y train.’ It would sound more inclusive.”

The Triboro RX plan, as it is known in planning circles, was a part of Lee Sander’s address on the 40th anniversary of the MTA. That speech was delivered two weeks before Paterson took over as governor from the scandal-plagued Eliot Spitzer, but he seems to have little familiarity with it.

Rubinstein had more though on the former governor’s relationship to the payroll tax, a funding mechanism he helped usher in:

The payroll mobility tax proved exceedingly unpopular in the suburbs surrounding New York City, and Governor Cuomo has since rolled it back, which sits poorly with transportation advocates, but which Paterson says was the right thing to do. “The reason I accepted the payroll tax is because I had to close $21 billion of deficit,” said Paterson. “We talk about $10 billion deficits now like it’s the worst thing that ever happened. I’m the only governor in the state that ever had to close $21 billion in their first year. And so at that point, anything that was on the table that involved revenue generation to pay off these debts, I took.”

“But now the governor who has continued to cut spending and has cut two budgets in a row on time, he has rolled back a lot of that tax, and at this point in history, it is precisely the right thing to do,” continued Paterson.

Right now, the M.T.A.’s finances are in a precarious state. The state-run authority’s debt burden is enormous, and it is lacking in sufficient dedicated revenue streams. “That’s a problem that the governor will have to face,” said Paterson. “But I think what the governor is saying is that the distribution of the responsibility has to be more fair, and I totally agree.”

Basically, Paterson is advocating for rolling back the payroll tax while calling any commuter tax a political non-starter. He’s using political buzzwords — such as tax fairness — without paying heed to the issues. He may have, as many have noted, appointed Richard Ravitch to solve the MTA’s problems, but he never embraced the proposals issued by Ravitch. His familiarity with some transit expansion plans that should become reality seems tenuous at best.

Ultimately, Paterson will not make or break the MTA Board. There have plenty of knowledgeable and active board members over the years and plenty who do not attend meetings and have little understanding of the issues facing transit in New York. At a time when transit needs its vocal supporters, Paterson’s early efforts aren’t comforting, but perhaps, he’ll prove me wrong.

©2012 Second Ave. Sagas. All Rights Reserved.

“Governor Paterson has dedicated his life to working for the people of this state and I am excited that he will continue his public service at the MTA,” Cuomo said today in a statement. “Governor Paterson’s energy, expertise, and experience will benefit the millions of New Yorkers who rely on the MTA every day. I look forward to working together as we continue to reform the MTA and improve service for New Yorkers.”

MTA officials echoed Cuomo’s praise. MTA Chairman Joseph Lhota issued a statement:

“I applaud Governor Andrew Cuomo’s nomination of former Governor David Paterson to the Board of the Metropolitan Transportation Authority. I have known the former Governor for 35 years and look forward to the opportunity to work with him again. He has long shared the Governor’s commitment to our mission of providing safe, efficient and effective transportation to more than 8.5 million riders every day. Once confirmed by the Senate, former Governor Paterson will bring a unique and practical perspective, particularly with respect to issues affecting minority communities and disabled New Yorkers. I look forward to former Governor Paterson bringing to our board deliberations the charm, wit and compassion he has shown throughout his public life.”

According to Pete Donohue of the Daily News, who first broke news of the appointment this morning, Cuomo’s desire to strengthen race relations may have played a role in this appointment as Paterson does not have much of a traditional transit background. Shevell, on the other hand, had worked for nearly 30 years in the trucking industry.

The former governor vowed to “take tough stands” on the MTA Board, but I still have to wonder about the wisdom of this pick. After naming Jay Walder to head the MTA, Paterson had a very hands-off approach to transit issues. The New York native repeatedly used his executive budgeting powers to reallocate supposedly dedicated MTA funds to other state projects, and he barely raised a finger when the MTA had to cut service and raise fares in 2010.

Yet, despite Paterson’s record, even Transportation Alternatives seems prepared to offer up their praise. “With another planned fare hike looming in January 2013, Paterson’s experience as a governor and state senator will prove critical to working with Albany lawmakers to find new funding for our transit system, sparing overburdened New Yorkers yet another fare hike. Paterson knows well that straphangers can’t handle another hit to their wallets—as Governor, he saw New Yorkers endure back to back fare hikes and reap service cuts in return. He also created new funding for our transit system. If anyone knows New Yorkers are tired of paying more for less and how to find fairer ways to invest in transit, it’s David Paterson,” Paul Steely White, Executive Director of Transportation Alternatives, said in a statement.

While it’s true that Paterson was head of the state during the implementation of the payroll tax, his path there left him with few options. He didn’t have the political respect to push through bridge tolls, and he settled for the measure the legislature was willing to adopt. Was he forward-thinking or simply bowing to the winds of pressure Albany? Paterson’s record suggests an outlook not nearly as rosy as Trans Alt puts forward.

His appointment will have to go through the New York State Senate for confirmation, but such a vote is generally viewed as a mere formality.

©2012 Second Ave. Sagas. All Rights Reserved.

As The Wall Street Journal reported, Gov. Chris Christie was quick to lend his voice to the issue. He called the plan “penny-wise and pound foolish” and claimed boosting the transit system that powers the city would harm the region’s economy.

For his part, Stringer fired back with a statement. “Job killing?” he said. “When Gov. Christie de-railed the ARC tunnel, he cost the region more than 150,000 jobs and $9 billion in economic activity. That’s how you kill jobs, governor. Gov. Christie should do his homework and get his facts right about the commuter tax. The greatest expansion of jobs in the nation’s history occurred in the 1990s – when New Jerseyans who worked in NYC rightfully paid their fair share through a small commuter tax.”

Meanwhile, as other mayoral hopefuls stay silent on the issue, the Senate Republicans and some State Democrats also spoke out against Stringer’s plan. Sen. David Carlucci from Rockland and Orange Counties called it “an onerous tax that would negatively affect working families, many of whom commute to and from New York City every day.” No one is willing to show much foresight or understanding of the nuances here even though Stringer as mayor would little control over how the MTA is financed.

©2012 Second Ave. Sagas. All Rights Reserved.

Transportation Alternatives has taken a lead role in warning about the MTA’s looming debt crisis. For the foreseeable future, the authority will devote a significant amount of resources toward debt payments, and as those payments come out of the agency’s operating budget, riders who shoulder a significant portion of that budget through fares, will be paying for debt. Ostensibly, that’s not a good thing for riders.

“This deal is an express train to more MTA debt, higher MetroCard fares and less subway and bus service,” TransAlt’s Executive Director Paul Steely White said last week. “When it comes to public transit, Albany only knows two plays: paying for it with more debt or robbing riders of hundreds of millions of dollars in dedicated transit funding. Both put the 7.5 million New Yorkers who rely on the bus and subway on the fast track to higher fares and more service cuts. Today’s plan doubles down on the State’s dangerous commitment to funding transit through debt. Governor Cuomo and the State Legislature must invest in transit through secure and sustainable sources of revenue.”

Advocates aren’t the only ones sounding the alarm though. As Streetsblog reported yesterday, Senator Gustavo Rivera from the 33rd District in the Bronx bemoaned the state’s actions as well. In calling for new sources of MTA funding, Rivera let it rip: “The great majority of people in my district rely on mass transit every single day. And when we look at what’s happened in the last couple of years, where the state has at different times raided the MTA and taken hundreds of millions of dollars that is supposedly dedicated transit funding, and instead uses it for all sorts of other things, what this has led to, as we know, is that the MTA has gone into a spiraling hole of debt.”

Now, I’m thrilled to see Rivera embrace transit. His predecessor Pedro Espada, Jr. clearly did not. But at the same time, the incessant focus on debt is obscuring some more serious issues. It’s true that the state has taken $260 million in dedicated transit funding away from the MTA over three years, but it’s also true that $86 million a year is barely 1 percent of the MTA’s overall operating budget. Since the MTA operates on razor thin margins, the impact of the reappropriation is magnified, and it should not be excused. It’s not however the only problem.

Meanwhile, for all the talk of alternative revenue streams — congestion pricing, bridge tolls, residential parking passes — the endgoal will not be a fully funded MTA capital plan. Rather, the end goal is to raise enough money to alleviate the pressures on the MTA’s operating budget while providing the agency with a steady revenue stream against which it can bond out more projects. This is the classic model of government spending. Ideally, the MTA would borrow money today to build a revenue-generating project tomorrow, and it would then pay off the bonds with increased fare revenue. That’s what’s happening along Second Ave.

The problem is that the MTA is spending exorbitant amounts of money on State of Good Repair work that has a negligible impact on ridership and costs far more to complete than it can realize through increase ridership and fare revenue. After decades of deferred maintenance, the authority is playing catch-up, and we the riding public are left saddled with the debt.

We shouldn’t excuse Albany for its failures, and we should applaud Gustavo Rivera for raising his voice. But we must recognize that Albany will not simply hand over $4-$5 billion a year for the MTA to invest in capital projects. One way or another, debt will remain in the picture. How the MTA picks what projects to fund through debt-producing bonds though will determine the future of our subway system.

©2012 Second Ave. Sagas. All Rights Reserved.

The tale begins on Wednesday morning when Occupy Wall Street protestors, posing as MTA workers, propped open the doors at around 20 stations. At around 5 a.m., masked men and women chained open gates at a variety of stations, and while many gates were restored by 8:30, some were left open during the bulk of the a.m. rush. According to The Daily News, stations included 135th St. on the No. 3 and 116th St. on the No. 6 in Manhattan; Halsey St. on the L, Ninth Ave. on the D, Beverly Road on the Q and Carroll St. on the F in Brooklyn, and Steinway St. and 65th St. on the R in Queens.

A few hours later, Occupy Wall Street claimed responsibility for the action. On the group’s blog, they wrote about their reasoning:

This morning before rush hour, teams of activists, many from Occupy Wall Street, in conjunction with rank and file workers from the Transport Workers Union Local 100 and the Amalgamated Transit Union, opened up more than 20 stations across the city for free entry. As of 10:30 AM, the majority remain open. No property was damaged. Teams have chained open service gates and taped up turnstiles in a coordinated response to escalating service cuts, fare hikes, racist policing, assaults on transit workers’ working conditions and livelihoods — and the profiteering of the super-rich by way of a system they’ve rigged in their favor.

For the last several years, riders of public transit have been under attack. The cost of our Metrocards has been increasing, while train and bus service has been steadily reduced. Budget cuts have precipitated station closings and staff/safety reductions. Police routinely single out young black and Latino men for searches at the turnstile. Layoffs and attrition means cutting staff levels to the bare minimum, reducing services for seniors and disabled riders. At the same time, MTA workers have been laid off and have had their benefits drastically reduced. Contract negotiations are completely stalled.

Working people of all occupations, colors and backgrounds are expected to sacrifice to cover the budget cut by paying more for less service. But here’s the real cause of the problem: the rich are massively profiting from our transit system. Despite the fact that buses and subways are supposed to be a public service, the government and the MTA have turned the system backwards—into a virtual ATM for the super-rich. Instead of using our tax money to properly fund transit, Albany and City Hall have intentionally starved transit of public funds for over twenty years; the MTA must resort to bonds (loans from Wall Street) to pay for projects and costs. The MTA is legally required to funnel tax dollars and fares away from transportation costs and towards interest on these bonds, called “debt service.” This means Wall Street bondholders receive a huge share of what we put into the system through the Metrocards we buy and the taxes we pay: more than $2 billion a year goes to debt service, and this number is expected to rise every year. If trends continue, by 2018 more than one out of every five dollars of MTA revenue will head to a banker’s pockets.

If anything, the underlying message is on point. Albany has indeed left the MTA high and dry, and the debt bomb continues to tick. At some point, as bond underwriters continue to profit, straphangers will be left paying an ever-higher share of debt. Some projects should be funded via debt, but most should not.

Anyway, even with this message, fallout has been swift. Occupy Wall Street alleged that TWU workers participated in the fare strike, but union leaders denied this claim. “We knew nothing about it,” TWU Local 100 President John Samuelsen said to The Daily News. An ATU official told amNew York that his union had reason to believe members were involved, and the MTA said nothing.

Nearly immediately, the NYPD, Occupy Wall Street’s main foil, began to investigate, and according to Gothamist, the FBI paid a visit to some of the rank-and-file who work at the targeted stations. This weekend, surveillance videos of the action emerged, and The Daily News noted that investigations have continued into the identities of those responsible.

What a mess, huh? Someone will get in trouble for this move; someone will get too up in arms over this; and someone will blame the Occupiers for the MTA’s budget woes when the March fare numbers come in under projection. That’s the way of things. What should not get lost in this is, as I mentioned, the valid points. The MTA is picking up more and more debt, and riders will pay more and more for services that many think aren’t up to par. Should we take it or fight back? The only people listening are Occupiers, and their message is lost in Albany amongst those who control the purse strings and policies.

©2012 Second Ave. Sagas. All Rights Reserved.

The full letter is available here, and I’ll excerpt.

“Let us assure that the Senate understands the critical role the MTA plays in our State’s economy and supports capital investment in the MTA system…However, allowing a staggering $42 billion bonding debt level is of great concern, especially at the same time the MTA has many unresolved issues in its financial plan.

While we recognize the importance of advancing capital projects, we also recognize the importance of funding them in a fiscally responsible and prudent manner. The MTA’s 2012-15 financial plan contains several risks which could adversely impact its ability to fund the remainder of the 2010-2014 Capital Program. The MTA is currently projecting deficits of $141 million and $211 million in 2014 and 2015, respectively. These deficits include factoring in 7.5 percent fare and toll increases in both 2013 and 2015, increases which have yet to be approved by the MTA Board and have never been supported by the Senate Republican Conference.

The MTA’s financial plan also assumes that it will be able to reach a new labor contract which includes three years of no wage increases, unless there are offsetting productivity improvements. If the MTA is unable to achieve these assumed labor contract savings, it would add substantial costs to its operating budget.

Now, nothing these three illustrious Senators say is incorrect. The MTA’s financial plan does rest on some tenuous assumptions, and they are relying on a net-zero wage increase — something that will be achieved through negotiations or layoffs. But this letter doesn’t address Lhota’s main concerns. By playing fast and loose with the MTA’s capital funding, Skelos and the Senate GOP representatives are risking billions in federal financing and the timely completion of East Side Access, Phase 1 of the Second Ave. Subway and countless other capital program items that keep our subway system running.

It’s also disingenuous for anyone in Albany to now express concerns over the MTA’s debt levels. For decades, Albany has scaled back direct investment in the MTA as the authority has turned toward debt financing. Now that austerity is all the rage amongst Tea Party voters, Skelos has found responsible budgeting at the worst possible time, and he has decided to blame the victim by denying it money.

The MTA needs to do a better job of reining in costs. It must not be spending so much on construction and labor. But right now, it also has to finish up to mega-projects, and billions of dollars of money is on the line. This is a game of political chicken the MTA can ill afford to play.

©2012 Second Ave. Sagas. All Rights Reserved.