• MTA workers fear for their jobs · While transit advocates have focused on the fare hike aspect of the MTA’s Doomsday budget, employee cuts are another major part of the authority’s cost-savings efforts. According to MTA documents, around 1100 workers will find themselves out of their jobs. The cuts will hit station agents and bus drivers the hardest, and those with less than two years of service time are going to be the first to go.

    Both The Daily News and NY1 reported on aspects of this plan today, and while I don’t like it from a personal security point of view, MTA workers are known to, well, sleep on the job and otherwise not fulfill their duties. These cuts may just make the MTA workforce more efficient and responsible. · (8)

Following a week of bad news for the MTA, the agency’s financial future grew a little dimmer yesterday as Moody’s, the bond-rating agency, warned of an impending rating downgrade. If Moody’s enacts this downgrade, the MTA would be slammed with higher interest rates and would find it harder to borrow money or issue new bonds.

The Times’ William Neuman had more:

The warning applied to about $12 billion in what are known as Transportation Revenue bonds. The bonds are backed by the fares paid by bus, subway and commuter rail riders, as well as other sources, including taxes on real estate transactions, which have declined with the worsening economy.

The report cited the authority’s deepening financial crisis and the failure of the State Legislature to enact a rescue plan backed by Gov. David A. Paterson. In response to the lack of action in Albany, and to help close a $1.2 billion deficit, the authority’s board voted on Wednesday to move ahead with a steep increase in fares and tolls and deep cuts to service.

“In the absence of a long-term funding solution from the State Legislature,” the report said, further fare increases and service cuts were probable. Even so, the report said, the authority faces growing budget deficits in coming years. It warned that “stopgap measures will not stabilize the long-term fiscal health of the M.T.A.”

As a result, the report said, the authority’s financial projections “may not support” the current rating for its fare-backed bonds.

As Neuman notes, Moody’s warning is a direct result of Albany inaction, and MTA officials were quick to point out the relation. “It is making the very direct connection between the failure of Albany to act and the financial viability of the MTA,” CFO Gary Dellaverson said.

I know I’m starting to sound like a broken record, but the point remains: Albany is not taking this MTA crisis seriously. Considering the very public and active statements of the MTA leaders, I’m not inclined to blame them for Albany inaction. Maybe it’s a nature of a legislative body with upstate representation attempting to legislate for New York. Maybe it’s a problem of out-of-touch politicians who don’t know their constituent needs. Maybe New York state really should split into two, as five State Senators recently suggested.

Whatever the cause, whatever the solution, as Albany delays, the MTA’s financial picture looks worse every day.

Categories : MTA Economics
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Mar
27

Thirty days hath Albany

By · Comments (4) ·

While New York sits in fear of fare hikes to come, straphangers can spy a slight glimmer of hope at the end of the fare hike tunnel. The MTA isn’t planning on preparing to implement the 23 percent fare hike and the massive service cuts approved this week until May. That still gives Albany until the end of April to act.

“We really have the month of April before people get impacted,” MTA CEO and Executive Director Elliot Sander said this week. “You could reverse some of these actions in May, but they will already start taking place in terms of hitting our customers.”

As the MTA gears up for the latest fare hike, Pete Donohue explained how Albany action could stave off the hikes before the end of April:

The higher subway and bus fares take effect May 31. Commuter train fare increases take effect on June 1 – but June passes go on sale in May. Most service cuts would be phased in between June and December.

With each passing day it becomes more expensive and difficult to halt or scale back the service cuts and hikes, officials said. Subway and bus fares aren’t changed with the simple push of a button, officials said.

New fare tables have to be compiled and then downloaded to every turnstile, token-booth computer, MetroCard vending machine and bus fare box in the bus and subway system, NYC Transit spokesman Paul Fleuranges said. Staffers must go to thousands of individual pieces of equipment and verify data in advance of the May 31 fare-hike date, officials said.

The Tri-State Transportation Campaign echoed Donohue’s report. “There are many paths elected officials can take, but only two possible futures,” Steven Higashide wrote. “In one, state elected officials get behind a comprehensive, long-term plan that addresses the MTA’s operating and capital budgets and allows for continued investment in the region’s transportation network. In the other, they pass a half-solution or do nothing at all, and the system steadily deteriorates.”

Hopefully, Albany will pick the former. But as time ticks on and nothing emerges from the State Senate, I grow less optimistic by the day.

Categories : Doomsday Budget
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While the ink has hardly dried on the MTA Board’s imprimatur to the fare hikes and service cuts, transit advocates are gearing up for another round of hikes. Unfortunately for transit-dependent New Yorkers, the MTA may now be on an annual hike plan to cover its ever-growing debt payments, and the next fare hike may come along as early as 2010.

Streetsblog had word of a statement from Gene Russianoff on the potential frequency of future hikes:

Without new financial help from Albany soon, the MTA says its current bad finances may mean another fare hike in 2010.

That would make it three years in a row for fare increases — March 2008, June 2009 and early 2010 — the worst record in the MTA’s 40-plus year history.

It demonstrates a trend of shifting the costs of operating transit from some beneficiaries of the subways and buses — such as motorists and businesses — onto riders. For example, the riders’ share of operating costs for the subways will go from 69% to an astonishing 84%, according to the MTA, if the just-approved fare increases are implemented.

Under the plan proposed by former MTA chairman Richard Ravitch, no new fare hike would occur before 2011.

Of course, all of this — absent general inflation-based fare hikes — could be avoided if Albany were to act. In one swoop, the State Senate could avoid extreme fare hikes and service cuts this year and any fare hike next year.

Maybe though instead of waiting for Malcolm Smith to get his ducks in a row, Sheldon Silver should, as the Post suggested today, pass a one-house bailout. Assembly action would force the State Senate’s hand. It could also create more of a press and voter uproar over Senate inaction.

Anyway, transit’s future in New York City is bleak. The MTA needs a few billion for its operating budget and has a $30 billion five-year capital plan in its pocket too. At a time when the economy needs transit, when the environment needs transit, when the city needs transit, we’re sitting here talking about the potential for a third fare hike in three years rather than true progressive solutions to something that shouldn’t be such a problem.

Categories : Fare Hikes
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Citing the need to “assure the kind of quality mass transit that our economy and our communities demand,” Assembly representative Richard Brodsky, State Senator Bill Perkins and 12 other assembly members have called on Gov. David Paterson to reform the MTA finances.

In a public letter to the governor (available here as a PDF), the two representatives, heads of their chambers’ respective Committees on Corporations, Authorities and Commissions, want to see real financial reform from the beleaguered transit agency.

“The fundamental problems of transparency, accountability, Board responsibilities and functions, oversight and public trust have become slogans that we all speak, but have not yet enacted,” they wrote. “We write because we strongly believe this financial crisis is an opportunity to, at least, fundamentally reform the MTA.”

The problems, according to Perkins and Brodsky, start at the top. “We need to open up the operations of the MTA, to provide regular outside overisght, and to ensure that the MTA and its Board are required to fulfill their mission. While this sounds simple and obvious,” the letter says, “it has become clear to us that the MTA and its’ (sic) Boards have not been able to meet these standards.”

Brodsky and Perkins’ ideas are mostly sound and most tame, considering the rhetoric in the letter. They write:

1) Board Members of the MTA should be subject to a statutory fiduciary duty to the mission and purpose of the MTA, as set forth in existing statutes.

2) There should be created a MTA/Authority Accountability Office to oversee that fiduciary duty and MTA operations, to recommend to the Legislature effective reforms of debt, compensation, MWBE, property disposition and other issues, to inquire into MTA activities and resolve complaints, and to receive and publish MTA documents. This is modeled on the successful NYC Budget Office.

3) The MTA should be required to publish, in real time, its finances, policies, plans and decisions. The current system relies heavily on post-facto audits. These do a reasonable job in telling us what went wrong. They do little to stop mistakes. Real-time review by the public, the Legislature, and the Authority Accountability Office could prevent problems not just explain why they happened.

4) The Comptroller should be empowered, consistent with the constitutional duties of the Office, to review selected contracts issued by the MTA.

My concerns about this proposal though stem not from their aims or ideas but rather from their misguided critiques of recent MTA problems: “Recent events at the MTA including the 2 Broadway deal, the 7 Line extension, the failure to publicly acknowledge cash resources, the failure to seek state and city support before voting for fare increases, and the focus on non-essential matters such as EZ-Passes for Board Members, has left the public with little confidence in the MTA.

Those aren’t recent events at the MTA, as Brodsky and Perkins allege, but recent news coverage of the MTA. As Chris O’Leary noted here yesterday, the myths about the MTA’s finances are largely media-driven, and Brodsky and Perkins are doing nothing to end the misconceptions that have allowed the State Senate to stall on a rescue plan.

Item-by-item: The 7 line extension is fully funded by the city, and the MTA shouldn’t have been blamed for failing to cover cost overruns. The MTA didn’t fail to seek state and city support before voting for fare increases. Rather, the state and city failed to support the MTA and had nearly a year’s notice of impending financial doom. The focus on the EZ-Pass scandal made for some juicy tabloid coverage but had little to do with the actual operations of the MTA. If the public has no confidence in the MTA, it is because the MTA is losing the public relations battle.

Brodsky and Perkins could have gone after the MTA for legitimate reasons. They could have examined issues concerning budget transparency, union relations and a bloated bureaucratic management structure. Instead, they chose to focus on the same old non-issues that make for good headlines and have little to do with the ingrained problems plaguing the MTA.

The Senate and Assembly should have more financial oversight of the MTA but not until the legislatures have shown they know what to do with that responsibility. Nothing I’ve seen out of Albany over the last month lead to believe any state representative could handle that duty.

Categories : MTA Politics
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  • MTA officially shelves SAS third track · Nine months ago, I reported on a proposed MTA plan to save money on the Second Ave. Subway construction costs by cutting the planned third track at 72nd St. While the track had been drawn up to allow other trains to bypass stalled cars, the MTA has officially decided it is an unnecessary expense, and Capital Construction cut it this week to save money. The agency is calling the cut a a $90 million savings, but because redesigning the 72nd St. station will cost $25 million, the decision to sacrifice future flexibility for present savings will net the project $65 million. It hardly seems worth it.

    In talking about the cuts at yesterday’s MTA Board meeting, Michael Horodniceanu compared the revamped Second Ave. Subway design to a poorly made American car. “We’re getting a Chevy,” he said of the long-awaited line. (Audio here.) I hope the city doesn’t come to regret the need to skimp on construction of this important new line. · (10)

As the MTA Board voted to pass a Doomsday package consisting of a 23 percent fare hike, the elimination of two subway lines and the scaling back of late-night and weekend service, the New York State Senate finally passed a comprehensive bailout package. The tax-and-toll plan will scale back the fare hike to a mere eight percent, avoid the service cuts, pare down the MTA debt and fund the agency’s ambitious capital expansion program.

Oh wait. Just kidding. Let’s try that again.

As the MTA Board voted to pass a Doomsday package consisting of a 23 percent fare hike, the elimination of two subway lines and the scaling back of late-night and weekend service, State Senators fell back on the same finger-pointing and party bickering that has come to dominate the Albany discourse. Our politicians again tried to blame a supposedly uncooperative MTA for Senate inaction and offered up the red herring of the commuter tax, another D.O.A. politically infeasible plan.

After fielding G.O.P.-targeted criticism in the city’s papers this week, Republican leader Dean Skelos blamed the Democrats for inaction. “The closed door discussions by the three New York City Democrats running state government have failed to produce an agreement on the MTA to prevent fare hikes, just as the closed door discussions on the state budget have failed to produce an agreement, with the deadline just a week away,” Skelos said in a statement.

Skelos has offered Republican support for an MTA bailout plan if it is tied to a road-and-bridges package for the upstate area.

Meanwhile, as Mayor Bloomberg urged the Senate to “do something,” one Senator took it upon himself to try. Martin Dilan, the head of the Senate Transportation Committee, proposed reinstating a commuter tax.

Support for the bill is dicey, and those who want the commuter tax reinstated believe the benefits should flow to the City and not the MTA. “The New York City commuter tax should be for New York City,” Senator Tom Duane said. “And if we hadn’t lost those millions from the commuter tax years ago, we wouldn’t be in such a dire situation with regard to the M.T.A.”

What the difference is, I don’t know. The City will benefit from a healthy and funded MTA. There’s also no guarantee that at any point the Senate would have diverted the flow of funds from the city to the MTA, as Duane suggests.

Furthermore, this proposed plan just won’t cut it. When the commuter tax was repealed during a good economy in 1999, it was estimated to bring in between $210-$360 million — or $267-$458 million in 2009 dollars. The MTA’s budget gap is $1.2 billion and climbing.

The tax has also suffered from historica bipartisan opposition. Upstate and Westchester-based Senators from both sides of the aisle felt the commuter tax unfairly burdened their constituents. With today’s G.O.P. mounting an ideological attack on the Ravitch Plan’s payroll tax, to assume a commuter tax — a plan far less equitable than bridge tolls — would pass defies reality.

(For an interesting debate on the commuter check, check out these two 2002 articles from the Gotham Gazette: pro and con. In a bad economy, the “con” argument seems a lot stronger to me.)

In the end, Senate Majority Leader Malcolm Smith issued another half-hearted plea for patience in an attempt to defend himself. “We are clearly still working towards a solution for them,” Smith said. “There’s still some time before they actually institute the raise.”

If this is the Senate “clearly” working toward a solution, I’d hate to see what they do when they actually want to get something done. Smith inspires no confidence, and while there is indeed some time before the cuts and hikes are implemented, I don’t have any faith in the State Senate. Do you?

Categories : Doomsday Budget
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Friend-of-SAS Chris O’Leary, better know as the East Village Idiot, also happens to be a fellow transit advocate. Today, in advance of the MTA Board’s approval of the 23 percent fare hike, he penned an excellent piece disputing some common misconceptions about the state of the MTA’s finances. I was getting set to write a very similar post, and Chris offered to allow me to reproduce his.

So below is a guide to popular myths about the MTA’s budget problem. City Room comments certainly could use this primer. Be sure to check out East Village Idiot for a mostly humorous and sometimes serious look at life in New York City.

Today, the MTA will vote to raise fares again… this time to the tune of 23%. Your monthly Metrocard that cost you $81 this month will cost you $103 in June.

Yes, it’s outrageous. Yes, it’s unfair. But no, it’s not entirely the MTA’s fault. In fact, this fare hike could have been easily prevented by Albany in the past and present, but everyone finds it easy to blame the MTA for this. Stop blaming the MTA, and blame the people who deserve to be blamed.

Myth: The MTA can find the money, somewhere, to stop this hike

When people say this, I ask, how? Nobody has an answer, they just have a feeling. Well, I invite anyone who wants to make this claim to go into the MTA’s financial statements and find enough money to fill their $1.3 billion deficit. It’s not possible. They are out of money. And there’s a good explanation, which brings me to my next myth.

Myth: The MTA got into this deficit by spending too much on big projects

Read More→

Categories : Doomsday Budget
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Updated (1:30 p.m.): Say good bye to the W and Z trains, good weekend service and low fares.

In a 12-1 vote, the MTA Board has approved its so-called Doomsday budget in its legally mandated effort to balance its budget.

The new fare structure will be as I detailed last night (and as presented below), and the new fare rates are set to go into effect on May 31. Late-night and weekend service cuts could go into effect even earlier, and the Z and W trains along with numerous bus routes will be eliminated in their entirety.
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This is truly a sad day for supporters and riders of transit in New York City, and the blame for this lies squarely with Albany.

While the battle for now has been lost, there is a faint glimmer of hope. The MTA Board said that today was not the final Doomsday. If Albany acts soon, the Board could put off the service cuts and reduce the fare hike. Politicker NY’s Eliot Brown reports:

Still, the drama continues, as this was not actually the drop-dead deadline for avoiding the fare hike. As many MTA board members noted, the board can take back the action should Albany agree on a new funding package. The fare hikes are slated to go into effect in June, while the service cuts would start earlier.

The Mayor’s Office however warned of at Albany punt. Albany could enact a short-term measure that is a politically popular measure but does nothing to address the inherent problems of the MTA. Writes Brown:

Jeff Kay, a mayoral appointee on the board and director of the mayor’s Office of Operations, was rather pessimistic, suggesting that even if there is a rescue, it will only be a short-term fix that doesn’t get at the root of the problem (not enough long-term reliable funding).

It’s possible, Kay said, that “they’ll come through with what’s politically expedient, which is, make sure fare hikes don’t go into effect.” But even so, “we will be back in two months saying we still have a problem if they just do the politically expedient thing.”

The drama continues.

Click through for a sneak peak at the new fare structure.

Categories : Doomsday Budget
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At 9:30 a.m., the MTA will meet — or will have met, depending upon when you read this — to vote on, among other items, a 23 percent fare hike and massive service cuts to its transportation offerings. While a prior commitment will prevent me from live-blogging the proceedings, you can catch a webstream here. The fare hike happenings will be early on, and I’ll have an update on site as soon as I’m back at my computer.

Meanwhile, on Doomsday Budget Eve, New York politicians and the newspaper editorial boards that love and loathe are all pointing fingers at one august body. Right now, the State Senate and its leaders on both sides of the aisle are getting creamed by pols and papers alike.

The party started earlier this week when the Daily News based both Malcolm Smith and Dean Skelos, the Senate Majority and Minority leaders respectively, for their failing to support the MTA. These politicians, both from transit-dependent districts, have known for a year about the transit doom heading New York City’s way, and then two of them stood by idly as comprehensive proposals to fix the MTA’s finances were supported by everyone else but the Senate.

Late yesterday afternoon, Sheldon Silver, the man responsible for killing congestion pricing in 2008, hopped on the Blame the Senate bandwagon. While Silver’s obstructionism last spring shut off one source of dedicate revenue for the MTA, he guaranteed that the Assembly would pass the Ravitch Plan. His statement:

Let me be clear, the Assembly Majority is ready to pass a plan to save the MTA and prevent a massive fare hike. Our plan would prevent the proposed cuts and fare hikes by sharing the burden of transit costs. Those who use the bridges would pay a toll that is equal to what New Yorkers pay for a subway or a bus ride, and employers would invest in the system through a small payroll tax. We had hoped that the Senate would support our plan. The Assembly is prepared to act on this proposal to avoid the huge fare increases and draconian service cuts that would have a devastating effect on all New Yorkers.

Mayor Bloomberg, echoing a famous line from Network, urged New Yorkers to call their Senators in Albany to urge them to save transit. “If Albany doesn’t come through, then the straphangers are going to have to bear the brunt of this. I don’t think that’s good for the system. I don’t think it’s good for our economy,” Bloomberg, a man who knows a thing or two about money, said. “But we cannot walk away from mass transit. We have to have it. So I hope it doesn’t get to that, but if it does, what I would suggest when you see what’s going to happen to your commuting costs, you should call your state legislators and say, ‘I’m mad as hell and I’m not going to take it anymore.’”

And finally, today’s editorial in The Times names names. Writes the Grey Lady of Republican Senators from New York who won’t deviate from the strict anti-Ravitch stance of the state G.O.P.:

Among city Republicans who should be interested in helping the M.T.A. are Senators Martin Golden of Brooklyn, Frank Padavan of Queens and Andrew Lanza of Staten Island. There are also a few Republicans upstate who should be trumpeting the Silver plan because of businesses in their districts that depend on the M.T.A. They include Senators Elizabeth Little of Glens Falls, Joseph Griffo of Rome and George Winner of Elmira.

As the State Senate turns its back on eight million riders a day, the M.T.A. can’t just wait. They could start preparing fare machines and scheduling delays set for June — unless Albany wakes up and comes to the rescue.

So that’s that. In 10 hours from my writing this, the MTA Board will have approved a fare hike/service cut plan to balance its budget as required by state law. Those who write the laws, though, won’t act and won’t take responsibility for their inaction. As Bloomberg and Silver do, as The Times and The Daily News do, I too blame our State Senate for the decline and fall of transit in New York City at a time when we need it most.

Categories : Doomsday Budget
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