Fare hikes and service cuts and death spirals, oh my!

By · Published in 2018 · Comments (51) ·

A $3 base fare for subway and bus rides are among the fare hike options the MTA is currently debating.

On its own, a fare hike doesn’t portend a looming transit death spiral. In fact, regular and predictable fare hikes for, say, a subway ride designed to ensure that revenues remain fairly consistent with inflation and other costs over the long term can be a sign of a robust and well-managed transit system working to compete with other modes of transit. But when a fare hike is coupled by service cuts amidst a prolonged period with an overall decline in ridership and revenue, the transit death spiral canary starts chirping a bit louder in that coal mine. Last week, the canary showed up at the MTA Board’s budget meeting as the board books showed a continued decline in ridership, the budget forecast called for service cuts, and the MTA started debating the structure of next year’s fare hike. It certainly seems like New York City’s transit system sits on the edge of a death spiral.

The transit death spiral is a particularly prickly beast to pin down. A few months ago, Aaron Gordon wrote about it in his newsletter, and I’d like to reframe Aaron’s model slightly. The death spiral encapsulates a budget cycle in which a transit agency recognizes a revenue shortfall due to lower-than-project ridership, raises fares and cuts service to compensate, and thus further dampens ridership, leading to additional shortfalls. As the cycle repeats, the spiral becomes inescapable until a massive bailout or death. When the topic arose over the summer, Cap’n Transit wrote a rebuttal to Gordon’s piece, and in the intervening few months, the spiral seems to have worsened.

The current cycle will come to a head soon when the MTA Board reconvenes to approve a 2019 fare hike. On its own, the 2019 fare hike isn’t a surprise as the MTA instituted biennial fare hikes beginning in 2011, but with service reliability on the decline, riders seem particularly up in arms over next year’s planned hike. You can see the proposals in the chart atop this page, and I’m agnostic as to which one the MTA should choose. With the introduction of subsidized Metrocards for low-income New Yorkers on the horizon, eliminating the pay-per-ride discount and keeping the increase on unlimited passes at a minimum is probably my preferred outcome, but that choice is akin to just shuffling deck chairs. In a handful of months, we’ll be paying more.

You can view the fare and toll hike proposals in this pdf, but the details of the hike aren’t the big story. Rather, the big story is the MTA’s worsening financial picture. That story unfolds in this pdf, and it’s a dire one. In the span of two years, since the July 2017 financial plan, the MTA’s long-term outlook has worsened by over $800 million. According to MTA documents, the biggest drivers are declining ridership ($485 million), paratransit costs ($321 million), workers compensation payments ($125 million) and overtime ($100 million). The MTA has relied on a series of one-shot budget moves to stave off deficits, but these one-shots are drying up. As Robert Foran, MTA CFO said last week, absent healthcare and pension reform, the MTA is out of cost-savings measures, and no politicians have desired to leap into that fraught battle. (In fact, Gov. Cuomo did just the opposite when the MTA labor contracts were up recently.)

So the options are fare hikes and service cuts, the two best ways the MTA has of controlling revenues and expenses. With fare hikes scheduled for 2019, service cuts loom for 2020 – the first cuts since the crippling scalebacks in 2010. The MTA, of course, hasn’t said exactly what the service cuts will be, but it sounds as though the agency could change “service guidelines” to allow for more crowded trains and less frequent service. The total cuts to the subway will equal around $10 million – which is modest and projects to a few fewer trains per hour during certain times of the day on some, but not all, lines – and $31 million for buses which will devastate the bus network. Perhaps then the buses, with extremely steep ridership declines, are closer to that death spiral than the subways.

Service cuts by themselves won’t close the MTA’s budget gaps and will harm the long-term health of the transit network by driving down ridership.

Still, service cuts are a last-gasp approach. As Foran detailed at last week’s meeting, the MTA prefers to seek out a separate revenue streams to avoid service cuts while closing its budget deficit, and I think back again to the piece I wrote on the fight for congestion pricing revenue. The money may have to go to shoring up the MTA operations budget before it can go to the capital plan (or Andy Byford’s Fast Forward fund) as everyone is laying claim to a magical cure-all that won’t be.

If that doesn’t further complicate the picture, Aaron Gordon in his newsletter last week noted yet another issue the MTA budget projections: Their out-year projections do not account for planned or potential work that could further stifle ridership and revenues. I quote from last week’s edition:

The L shutdown, for example, begins next year. The MTA predicts the vast majority of trips will still take place within its ecosystem, but it’s easy to imagine ridership falling due to discretionary trips not being taken or a higher-than-projected rate of folks opting for rideshare or bicycling instead. Indeed, the MTA now predicts a 1.1 percent decrease in ridership in 2019, following a 2.8 percent decline this year. This is a major revision from the July plan, where they predicted ridership *increases* in 2019 and 2020 despite acknowledging the L shutdown. Their logic: the economy is good.

These explanations are more confusing than insightful. Pegging ridership trends to future employment projections may be accepted practice but it’s been demonstrably unreliable in recent years due to fundamental changes in how we work, shop, and travel…But there’s an even bigger red flag in their ridership projections. If the MTA does get funding to move ahead with the Byford Plan, entire trunk lines in Manhattan as well as major branches in Queens and Brooklyn will be shut down on nights/weekends for months if not years on end. In other words, the most extreme planned work shutdowns in the city’s history will occur in the next decade if Andy Byford gets his money. Ridership will almost certainly suffer.

That’s not an argument against doing the work, but merely a consideration therein, especially when projecting budgets. But, as of now, the MTA is predicting flat ridership for 2020-2022. Of course, the MTA cannot budget for a plan that has yet to be funded, but they don’t even flag this as a potential risk. This is emblematic of the agency’s tendency to get caught flat-footed by predictable ridership trends.

In other words, the plan to repair the system will, by necessity, lead to temporarily lower ridership, and the MTA isn’t accounting for it now. Their budgets for outyears aren’t conservative enough, and we’ll have to go through this process sooner than the MTA currently anticipates. You see where this is going? That’s also part of that death spiral.

Meanwhile, the MTA itself is struggling to figure out why service is declining. This came up first over the summer during the presentation of the July financial plan when the MTA failed to distinguish between the cause and the effect of the ridership decline. Ridership is declining because off-peak and weekend service isn’t reliable, and with easy and cheap alternatives such as for-hire vehicle apps, those who take discretionary subway trips are opting for more reliable means of travel. Last week, the MTA bigwigs tried to blame fare evasion as the leading cause of ridership declines without offering any evidence whatsoever, and it seems like the gatekeepers don’t know what ails the transit network. Between the lack of foresight in budget planing and the lack of understanding of the ridership decline, it’s hard to say if the current MTA Board and management can work its way out of this mess before the spiral leads to death or at least temporary paralysis cured only by a steep infusion of cash.

I am ultimately not particularly optimistic as we sit here a few days after Joe Lhota’s departure and a few months before fare hikes and the L train shutdown start to tax the system. It’s not clear what the future holds for Fast Forward, and it’s not clear where these downward trends lead. Enough people are watching that I hope we can escape the spiral before it gets worse, but like I said, that canary just won’t stop chirping.

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Joe Lhota’s abrupt departure cleared the way for snarky tabloid covers and a renewed focus on MTA issues in the wake of election day’s Democratic takeover of the State Senate.

As last Tuesday’s state election results rolled in and it became clear Democrats would win a decisive majority of the New York State Senate seats, I began to think about what this sea-change in Albany would mean for the MTA. Somewhat optimistically, I believe that unified Democratic control of the state legislature along with a resounding third-term for Andrew Cuomo should at least lead to a push to fund Andy Byford’s Fast Forward plan, likely via congestion pricing, and reform the MTA. But then Friday’s news landed with a bang, and the MTA once again found itself facing turmoil at the top.

It’s not quite clear why yet, but as Mayor Bill de Blasio was on the phone with WNYC’s Brian Lehrer for his weekly on-air Q-and-A session, news broke that Joe Lhota had resigned immediately as MTA Chair and CEO. Just three weeks ago, Lhota had told reporters on the record that he would not be stepping down after Election Day, and Lhota’s departure came as a surprise. It’s not clear what served as Lhota’s motivating factor for leaving. Subway performance has stabilized to a certain degree, and Lhota has seemingly set up the agency to begin a long and expensive modernization project. But his second tenure atop the MTA wasn’t as smooth as his first, and he left amidst heavy tabloid criticism long before the tough job of fixing the MTA was through.

The reasons for his departure remain a mystery. Good government groups had raised ethical concerns about his seemingly conflicting roles on the MSG Board and head of NYU Langone Hospital and have constantly noted that the MTA Board and CEO position is statutorily required to be a full-time job. Though Lhota alleged to have delegated authority, Reinvent Albany, among others, claims he simply wasn’t legally permitted to do that, and perhaps Lhota thought he would come under more scrutiny for apparent conflicts at a time when Albany’s focus should be on transit funding and capital spending reform rather than ethics clashes. But this is just speculation on my part, and maybe Cuomo just wanted someone else to spearhead the multi-billion-dollar request to fund Byford’s plan.

So now the MTA faces changes on two fronts — political and personnel — but there is no reason why the two should be separated. In fact, the personnel and the politics hands the New York State Senate its first opportunity to, well, do something. First, I believe the Reinvent Albany post I linked to above is spot-on. When Lhota came up for a confirmation hearing in 2017, the Senate dragged its collective feet until the final night, held a perfunctory hearing via a phone call with Lhota, and approved the veteran as MTA head without much ado. The next person to be nominated for the spot should be required to serve full-time with no outside income or other apparent conflicts and should face a full Senate confirmation with serious, probing questions about MTA performance, funding and cost reform. If the Democrats in the State Senate plans to exercise the powers recently granted to them, they can state with an informed grilling of the next person tasked with heading the MTA at this juncture.

Separately, with the election in the rear-view and Cuomo seemingly on board with a congestion pricing plan, the Senate can get back to the business of legislating. Now that the Democrats have a strong pro-congestion pricing caucus, passing a plan, with money for transit, should be a top priority. Congestion pricing will also help clear up NYC streets which have become nearly impassable during nearly every hour of the day. This may rely on Cuomo pushing the issue a bit. He spoke at length during the campaign of congestion pricing but also, as Gotham Gazette noted, offered something of a carrot to reluctant representatives. Of this initiative, Samar Khurshid wrote:

Cuomo has pushed for a comprehensive congestion pricing program to fund the MTA, arrest the decline of New York City’s subway system, and reduce the clog of Manhattan streets. But Democrats, particularly in the outer boroughs and in suburban areas around the city, are far from unanimous on the proposal. Cuomo seemed to recognize these differences in appearances in early October on Long Island and South Brooklyn. In Long Island, he pledged to make the city “pay its fair share for the MTA,” while at the Brooklyn event, he pledged to secure funding for the beleaguered transit authority through congestion pricing.

How that horse-trading plays out is anyone’s guess. Perhaps the Governor embraces the Mayor’s endless calls for yet another millionaire’s tax to fund transit; perhaps he continues his disinformation feud over MTA funding responsibilities. Still, it seems as though Cuomo is lining up something to ensure suburban representatives pass congestion pricing when the issue comes to the forefront. We have to be careful with congestion pricing though because it is not the only path to MTA funding. We need congestion pricing for a variety of reasons (including easing the lost productivity and environmental harm caused by endless congestion), but as I wrote last month, the revenue will not be sufficient to shore up the MTA’s finances. Still, any additional funding mechanisms will have to pass muster in Albany, and the state representatives are well away all eyes are on them.

To that end, the State Senate and Assembly should reinsert themselves in the oversight process. The various committees tasked with keeping an eye on the MTA have held one joint hearing on the authority over the past three or four sessions, and that hearing turned into a personal gripe-fest with legislators complaining more about bus stops being moved 100 feet rather than structural issues with MTA operations and spending. The state governing bodies must be willing to hold the MTA accountability for its inability to spend money efficiently or build timely. The city’s and state’s futures depend on it.

Ultimately, these are tall orders for a newly-unified government and a party that hasn’t had much success when it has been able to set the state agenda. Though the “three men in a room” model of state governance will likely fall by the wayside with unified Democratic control, Cuomo has indicated that he plans to stay heavily involved in the legislative agenda, but he is also cognizant of how a failure to fix the MTA may reflect poorly on him as he commences a run at the White House in 2020 (however misguided I personally believe that to be for him). If the opportunity exists to keep Cuomo’s attention focused on the New York City subways, then, by all means, everyone invested in improving transit should seize that opportunity.

With Lhota out and Albany gearing up to address MTA issues, transit will be at the forefront of the legislative agenda for the foreseeable future. The next MTA Chair and CEO has to be someone who has Albany’s ears and Albany’s trust on key issues and must be someone who can fight for Andy Byford’s Fast Forward plan. At the same time, the State Senate and Assembly must put the MTA under a microscope, actions Albany has generally avoided as legislators often feel dealing with the MTA is a lose-lose proposition. I’m cautiously optimistic change in Albany and change atop the MTA can quickly lead to good outcomes. If it does not, the transit death spiral we’re desperately trying to avoid will inch closer and closer.

Categories : MTA Politics
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Lhota resigns as MTA Chair and CEO, effective immediately

By · Published in 2018 · Comments (24) ·

Joe Lhota has stepped down as MTA Board chair for the second time in six years.

Joe Lhota has resigned as the CEO and Chair of the MTA effectively immediately, Gov. Andrew Cuomo announced today. Lhota had come under fire from ethics watchdogs (including Reinvent Albany) for holding multiple jobs, including a spot on the MSG board, that could conflict with his duties at the MTA, but he had stressed as recently as two weeks ago that he was not planning on stepping down, despite rumors to the contrary. Fernando Ferrer will again assume the role of interim MTA Chair, a position he held following Tom Prendergast’s 2017 departure from the MTA’s top spot.

The news broke as Mayor Bill de Blasio was on the air for his weekly spot with Brian Lehrer, and he was just as surprised as anyone else. The mayor, apparently, had not been given advanced warning of the resignation. “There are clearly a lot of other leaders at the MTA who can carry forward the work but no one is going to get the work of fixing our buses and subways done if we don’t have a permanent funding source,” he said. “They need a plan from Albany, and they need accountability.” He spoke further of a new “culture of accountability” – an argument with which I agree.

This is of course Lhota’s second premature departure from the MTA. He stepped down at the end of 2012 to run for mayor and returned to the MTA in mid-2017 after Prendergast left his post. Lhota’s current term was scheduled to run through June of 2021.

For the MTA, Lhota’s departure continues a period of tumultuous turnover atop the agency. Since Peter Kalikow served out his full term in the mid-2000s, the MTA has seen five or six permanent MTA CEO/chairs — the Dale Hemmerdinger/Lee Sander hydra, Hyperloop’s Jay Walder, Lhota the first time, Tom Prendergast and Lhota the second time — and only Prendergast served for more than two years. With a number of interim heads in between, this creates a real leadership void at the MTA and uncertain for agency heads. Oftentimes, new MTA Board chairs prefer to select their own agency heads (though hopefully Lhota’s successor opts to retain Andy Byford).

Lhota leaves amidst a tough time for the subway. The MTA has instituted a significant subway action plan that officials claim has halted an increase in delays, but the number of delays and unreliability of service remains high. No one who rides the subways believes any of problems have been solved and more loom with the L train shutdown less than six months away.

The Wall Street Journal, first to break the story this morning, had more:

In a statement, Mr. Lhota said he took the position for the “sole purpose of halting the decline of service and stabilizing the system for my fellow New Yorkers.” He touted an $800 million emergency repair package that he crafted in his first month, as well as a new executive team he put in place.

In September, the number of total train delays fell to the lowest point since February 2016, Mr. Lhota said. “There is still a long way to go to achieve the performance that New Yorkers demand and deserve,” he said.

The state official said the governor’s team and the MTA would immediately begin a search for a new chairman. The search comes at a time of turnover in Mr. Cuomo’s administration: Commissioners of three state agencies acknowledged this week that they were leaving their posts, and more departures are expected.

In a statement, Gov. Andrew Cuomo praised Lhota. “Joe Lhota has dedicated decades of his life to public service culminating in two tours of duty at the helm of the MTA,” he said. “He stabilized the subway system, appointed a new leadership structure to completely overhaul the MTA, and led with a steady hand during some of the agency’s most challenging moments. In short, Joe demonstrated time and again why he was the right person for the job. I am deeply grateful for his service to the State of New York. In accordance with MTA bylaws, Vice Chair Fernando Ferrer will serve as Acting Chair while we prepare to name a permanent replacement for when the Senate returns in January.”

Off the cuff, Lhota’s departure gives Gov. Andrew Amazon Cuomo, the state official who is definitely in charge of the MTA, a chance to think outside the box. He’ll need to find a strong champion for transit at a time when the MTA job is often considered lose-lose in the industry, and he could use this opportunity to seek out diversity atop the ranks of the MTA Board, a long-overdue move for the MTA. Cuomo has also said he will make the appointment before the State Senate returns to session in January, a break with precedent as he has sat on prior MTA appointments in the past. With Byford’s Fast Forward plan in need of funding and a 2019 fare hike on the horizon, the MTA cannot afford to be without permanent leadership for too long, and the newly-empowered Democratic State Senate will have to confirm anyone Cuomo nominates for the job.

More to come.

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In a few hours, the polls in New York will open on an election that, at one point, may have been viewed as a referendum on Gov. Andrew Cuomo’s leadership of the MTA. For a few months, before the noise from Washington overwhelmed local issues, it seemed as though Cuomo was going to have to take responsibility for the ongoing decline of the subways during his eight-year watch. But after dispatching Cynthia Nixon, who failed to turn the subway crisis into a campaign issue with traction, and drawing Marc Molinaro, a largely ineffectual candidate with a semi-decent plan to reform MTA (while also defunding it, in part), Cuomo will waltz to victory on Tuesday with some vague promises to push through an overtaxed congestion pricing and fight for the subways.

A few weeks ago, on the eve of Cuomo’s primary, I wrote that the governor doesn’t like the subway and isn’t going to save it. That largely holds true tonight as well. There’s a chance Cuomo, who believes he can run for the White House in 2020, will embrace saving the subway as his signature moment and devote the right energy to Andy Byford’s Fast Forward plan, but there’s a better chance he’ll use the region’s infrastructure for a bunch of photo ops while highlighting projects that don’t solve our problems. The area’s best hope is for a Democratic-controlled State Senate to pass congestion pricing and perhaps exercise its oversight powers more often than once every three years. To that end, those in Bay Ridge should consider a vote for Andrew Gounardes, and those of us who live in former IDC districts should consider a vote for the challengers. Otherwise, #FlipYourBallot and vote YES on proposition 3 to impose modest term limits for Community Boards and hope for the best for transit.

With that said, it’s worth looking at the state of subway ridership on the eve of Gov. Cuomo’s second reelection effort. As I hinted at a few weeks ago, it’s not a pretty picture as ridership has essentially started to crater. After months of a steady decline, August saw a steep dip as average weekday subway ridership fell to just over 5 million riders a day, a drop of 2.5% from 2017, and combined weekend ridership fell by nearly 9%, the steepest year-over-year decline in decades.

These trend lines are heading in the wrong direction.

With the city’s economy continuing to add jobs, it seems that riders are fleeing the system and turning to other modes of travel for their commutes. The factors I explored a month ago are still at play, but this nosedive in August raises some serious red flags. Even during the slow summer months, when the MTA anticipates a dip, ridership was nearly 2 percent below projections (and the resultant farebox revenue missed its target as well). As ridership declines, the MTA’s finances grow strained, and city streets grow more crowded from the congestion caused by erstwhile subway riders resorting to for-hire vehicles. We head further toward that downward death spiral.

It’s not quite clear what anyone’s plan for this alarming modeshift may be. Cuomo is talking about congestion pricing which could push some folks back to the subways, and the MTA itself is touting Fast Forward. The latter though is a long-term solution with fewer short-term gains, and it’s not clear the powers-that-be are picking up on the problem. Make no mistake about it: A significant mode-shift away from transit to less sustainable modes of travel is a problem for the city’s productivity and environment, and a culture shift away from traveling anywhere, especially on the weekends, is a problem for the vibrancy of New York City. Without the subways, the city can’t function, and right now, month by month, we inch closer to that breaking point.

I worry about a disengaged Andrew Cuomo after the election when the subways aren’t fixed but no one is running against him on the issue. Will he still care or will we be stuck with what we have until he’s out of office? Photo ops won’t be enough to save the subways or our congested streets, and the transit death spiral could lock the entire region in its sour embrace sooner than we’d all like to contemplate.

Categories : MTA Politics
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An MTA map shows service patterns during the L train shutdown. (Click to enlarge)

It’s now just six months until one of the largest transit diversion in New York City history, as the MTA and New York City Department of Transportation announced on Tuesday that the 15-month L train shutdown will begin on Saturday, April 27, 2019. Until the end of July 2020, no L trains will run between Brooklyn and Manhattan, as the MTA finally performs the rebuild of the Canarsie Tunnel, damaged in the flooding from Superstorm Sandy back in 2012. The shutdown, under attack by West Village NIMBYs who cannot stomach some street space in Manhattan given over to buses and bicyclists, promises to be disruptive throughout parts of Brooklyn, Queens and Manhattan even with careful mitigation plans, and now the countdown is on.

“We’re continuing unprecedented efforts at public outreach, responding to local communities and giving as much notice as possible on key dates in this project,” NYC Transit President Andy Byford said in a statement. “With the L running as a Brooklyn-only service for 15 months starting after the weekend of April 27, we’ve been hard at work with our partners at NYCDOT and other City agencies to make sure that the alternate train, bus, ferry and bicycle networks work together to get people around successfully.”

Just how successful initial mitigation plans will be remains to be seen. Transit advocates are generally skeptical that a part-time busway on 14th Street and HOV3+ restrictions on the Williamsburg Bridge without corresponding requirements on nearby East River crossings along with no plan to address lower-capacity ride-sharing services along these routes will lead to crushing congestion, and the plans to increase subway service, while substantive, do not leave much room for error. If anything goes wrong, the cascading delays will lead to unmanageable crowding along lines that are expected to pick up the slack for the L train, but the real test will be how the city and MTA adapt the plan to demand during the first few days of the shutdown next spring. If they’re agile and quick, those HOV3+ restrictions can morph into bus-only hours, thus alleviating some expected congestion.

Lately, after years of community meetings, presentations and patiently fielding public inquiries, the MTA has settled on the details of the increased service. The MTA will run its own ferry service from Williamsburg beginning on April 21, 2019, and five new bus routes, including Select Bus Service for the M14, will commence that day as well. Just last week the MTA approved 198 new weekday roundtrips on other lines to carry the slack with G train riders enjoying 66 more roundtrips per day and the M 62. (The detailed breakdown begins on page 193 of this pdf.)

In approving these service increase, Andy Byford stressed their volumes. “We will be adding more than a thousand roundtrips each week and pushing our resources to capacity, which is also why you’re seeing so much preventative maintenance and repair work on all these lines already,” he said. “We are making these lines as reliable as possible for these new service levels starting in 2019.”

Meanwhile, in addition to the plans I have detailed before, the MTA and DOT announced air monitoring throughout the shutdown. This in response to neighborhood complaints that the plan to use diesel buses for mitigation will lead to unacceptably high levels or particulates. Experts, including Charles Komanoff, contend rightly that diesel buses are far cleaner than they were when they developed the reputation for pollution, but it’s clear that DOT and the MTA are particularly concerned with giving community groups ammunition that could torpedo any portions of the delicately balanced mitigation plan.

Meanwhile, the lawsuit filed by a self-proclaimed progressive who can’t stomach transit riders continues apace. Although the federal claims I detailed in April were dismissed following the August released of the Environmental Assessment, Arthur Schwartz refiled numerous claims objecting to the L train shutdown in state court a few weeks ago. The filing is available here as a PDF. I expect this complaint to be handled or dismissed for reasons similar to those I detailed in April, and the MTA and DOT have until the end of November to produce a state environmental review or move to dismiss the claim. It’s a last-gasp effort by West Village residents upset that they cannot have unfettered access to city streets for their private automobiles during an event disruptive to 200,000 subway riders per day. Make of that what you will, but with six months remaining until L train service shutdown, the clock is ticking.

Categories : L Train Shutdown
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A new report by New York State Comptroller Thomas DiNapoli lays bare the MTA’s debt crisis.

If it seems inevitable that congestion pricing will arrive in New York City, that’s because it is. Although no one in Albany appears to be in a hurry to push through pricing plan, every gubernatorial candidate, including the incumbent set to win by 20 points or so in two weeks, has, to one degree of enthusiasm or another, endorsed a fee on cars entering Manhattan. But with expectations high, can congestion pricing be the savior everyone is hoping it will? Can it fund Andy Byford’s Fast Forward plan or is the money already earmarked for something far less sexy? if I’m even asking, you can already guess the answer.

The most recent answer comes to us from a comptroller’s report on the MTA’s tenuous financial outlook. As Thomas DiNapoli explores in a new release [pdf], the MTA’s mounting debt is set to explode over the next few years, and with numerous competing demands on any new sources of revenue the state may authorize, along with a need to modernize the system, the MTA is in a position of promising the moon and stars while stretching dollars to cover investments it simply cannot afford. It’s a dire picture indeed.

The state comptroller summarized his findings in a press release on the report. In essence, even without addressing Andy Byford’s $40 billion Fast Forward plan, the MTA’s debt service payments are set to balloon to $3.3 billion by 2022 with the MTA’s total debt to reach $41.9 billion that year, and that’s before the agency starts bonding out Byford’s plan. Meanwhile, even though the MTA plans to raise fares next year and in 2021 and reduce certain expenditures, the operating budget gaps are projected to be $262 million in 2020, $424 million in 2021 and $634 million in 2022. To close those gaps, the MTA will need to implement massive cuts or fare increases or receive a new dedicated funding stream.

Even then, a balanced budget is no sure thing. As DiNapoli notes, the MTA’s current budget projections rely on “the assumption that the current economic expansion will continue uninterrupted.” As DiNapoli writes, that’s not sure thing: “As evidenced by the sharp drop during the Great Recession, the MTA’s revenues are sensitive to economic fluctuations. Changes in business cycles are inevitable, and the likelihood of an economic setback grows with each passing year.” Additionally, DiNapoli notes that, despite recent trends (including a very negative report on August ridership I’ll cover later this week), the MTA’s fiscal outlook relies upon a ridership increase in 2019. As the comptroller charitably notes, “While subway service has improved marginally in 2018, it remains far below riders’ expectations, and the improvement may not be enough to persuade riders to return in the face of higher fares.” Fare increases, as DiNapoli charts, have already outpaced inflation over the past decade, and if the MTA’s assumptions fail — if the economy falters and/or if ridership continues its precipitous decline — the MTA’s deficits, and corresponding fiscal pressures, will grow.

So how, you may ask, does this implicate the fight over congestion pricing? Well, the MTA has multiple competing fiscal demands right now. The agency is legally required to balance its operating budget and needs money over the next decade, as part of the next two five-year capital plans, to fund Byford’s Fast Forward program. Without it, service reliability will continue to decline, and eventually, the subway crisis will grind New York City to a halt. So essentially, the MTA needs two new revenue streams — one to fund its capital program and one to fund budget deficits (driven by the increased debt load from its capital spending). Congestion pricing can’t cure two ills in one fell swoop, but it’s being billed as a grand solution for the MTA’s woes.

On the one hand, New York City needs congestion pricing for numerous reasons. It needs to clear out congestion for economic, environmental and sustainability reasons, and it needs a new dedicated funding stream for transit. On the other, the MTA needs far more reform than congestion pricing. It needs a strong commitment from Albany to fund the capital budget through direct investments rather than new debt. It needs a strong commitment to reform capital spending so that projects aren’t orders of magnitude more expensive here than they are anywhere else in the world. And it needs an immediate response to the ridership and reliability crisis. These are not ills congestion pricing can solve immediately, and in certain ways, congestion pricing will put more pressure on the transit system to deliver reliable service immediately.

So as we talk about solutions to the MTA’s problems, and digest DiNapoli’s report in light of the MTA’s own budgetary picture, we have to be realistic. Congestion pricing is a piece of the puzzle, but that money will disappear into the agency’s budget as fast as it can. Perhaps congestion pricing can delay the inevitable, but can the MTA save itself from, well, itself? That’s the billion-dollar question upon which the fate of New York City rests, and as the Magic 8 Ball might say, “Reply hazy; try again.”

Categories : MTA Economics
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Generally, in recent New York City history, as the city’s economy grows and employment increases, transit ridership does as well. On a basic and obvious level, it makes sense. After all, people need to get to work, and if more people are working, more people are going to be using the subways and buses to get to their jobs. And yet, this time around, something funny is happening: As the city’s economy continues to add jobs, transit ridership has continued to plunge.

This story began years ago as ridership started to slip, and I looked into the numbers over the summer. When the agency released its board materials for last week’s meeting, the picture remained negative. Average weekday subway ridership in July 2018 was nearly 2 percent lower than in July 2017, and the MTA noted that this dip was a steeper decline than the one during the second quarter of this year. Weekend ridership has declined by over 5 percent. Take a look at the graph of the 12-month rolling averages. Weekend totals include both Saturday and Sunday.

July ridership numbers show an ongoing decline.

The averages aren’t the only numbers showing an alarming dip. Year-to-date ridership is 0.5 percent below 2017’s pace even as total NYC employment has inched up by nearly two percent over the same period in 2017. Where is everyone going? Or better yet, how are they getting to work?

In the Board materials, the MTA doesn’t speculate as to the lost riders. The agency notes that bus ridership is lower due to fewer student rides, but student rides make up a small fraction of trips especially during the summer months. That’s an unsatisfying answer. Meanwhile, we’ve already seen the MTA attempt to explain the ridership decline with less than impressive results. The agency blamed for-hire vehicles for the declining ridership rather than the poor service, and it’s not clear the agency has a plan to stanch the bleeding or cares much about it.

And that brings me to the next question: Should we care? The answer is a nuanced one. On the one hand, the declining ridership in excess of MTA projections means the agency will miss its fare-based revenue projections, but the miss totals only around $3.1 million. The year-end total will be somewhere around $5.5-$6 million, a piddling amount for an agency with a $13 billion budget but still an amount that could lead to service cuts. Meanwhile, if a modern economy allows potential commuters to work remotely, perhaps we shouldn’t expect a ridership increase commensurate with employment numbers.

But the nagging feeling I have, based on that July report on ridership mode shifts and the general worsening subway service, is that subway and bus ridership numbers are declining because the MTA can’t provide regularly reliable and fast service. Thus, potential transit riders are looking at other modes for travel, and the increase in usage of FHVs (along with added congestion) will increase because the MTA’s service doesn’t provide the reliability New Yorkers need.

If Transit is worried about this ridership decline, the executives aren’t showing it. Andy Byford’s Fast Forward remains a plan without a funding stream rather than an ongoing concern, and agency officials haven’t spoken of the need to combat the decline or a fear that the bottom could fall out. I believe stopping this dip should be a primary concern if NYC is stay on a pace of sustainability with fewer car trips and more transit usage. This slow-motion death spiral will choke the city.

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A magic wand isn’t going to fix the subway without a chief executive willing to push through reforms and support leadership. (Photo: Kevin P. Coughlin/Office of Governor Andrew M. Cuomo)

It’s no secret that Gov. Andrew Cuomo is a car guy. He loves to talk about his personal collection of muscle cars, and on Friday, he had an opportunity to host his favorite type of ribbon cutting for the opening of the second span of the new Tappan Zee Bridge. He gathered his entire family on the bridge along with the usual collection of local politicians and Hillary Clinton, and he “opened” the bridge by driving FDR’s 1932 Packard across the new span. And then the bad news arrived.

As The Times reported on Monday, the Cuomo administration essentially bribed contractors to rush the finish of the span so the Governor could host the opening before Thursday’s Democratic primary election, but the bridge couldn’t actually to open to traffic because engineers found that the old one had destabilized and is at risk of collapsing onto the new one. In a way, it’s a perfect metaphor for Cuomo who governs by press release and ribbon cuttings, trumpeting other people’s accomplishments, and it mirrors the way he treated the Second Ave. Subway. He demanded the project open by the end of 2016 even though an extensive punch list remained (and still remains). He wants his photo ops, and come hell or high water, he’ll get them.

Cuomo’s grinning appearance on the bridge on Friday was in marked contrast to his Thursday press conference in Penn Station in which he debuted a new entrance to Penn Station and some Moynihan Station-related improvements. He spoke about catacombs and the general dinginess of Penn Station in ways that clearly made talking about transit sound like a chore for him. His muscle cars and FDR’s Packard it was not.

After nearly eight years of Gov. Cuomo, it’s become abundantly obvious that his disdain of public transit (and its riders) is a feature and not a bug. By most counts, he’s taken the subway only around 2-3 times during his gubernatorial tenure, and at least one of those was a special train from the Rockaways. Thus, this piece of reporting on Politico New York from Dana Rubinstein should come as no surprise: Cuomo’s disdain for public transit runs deep and is rooted in his outdated preconceptions about transit riders. Rubinstein writes:

Would-be governor Cynthia Nixon does straphanger photo ops. Council Speaker Corey Johnson does them, too. So occasionally does avowed motorist Mayor Bill de Blasio. Across the Hudson, Gov. Phil Murphy does it, on the foundering NJ Transit. In fact, perhaps the only major local politician who doesn’t do it is the one who controls New York’s crisis-ridden subway system. That would be Gov. Andrew Cuomo.

It’s not like his advisers haven’t tried to persuade him to give it a try. They’ve urged Cuomo, who is running for a third term, to ride the subway on more than one occasion, according to two knowledgeable sources. The governor has demurred. One explanation has it that the image of a “passive straphanger” doesn’t align with the governor’s can-do persona. It doesn’t enable him to don a windbreaker or grapple with machinery alongside predictably deferential transit workers.

The situation on the subways, on the other hand, is less controlled and rife with potential landmines. What if he pulls a Hillary Clinton and his swipe doesn’t work — on a Metrocard machine he’s responsible for, because he runs the Metropolitan Transportation Authority, which runs the subway? What if the countdown clocks his MTA installed are inaccurate? What if he gets heckled? “He’s smart enough to know that if he showed up on a subway platform at this point, he’d get his ass kicked,” said one Democratic political consultant who asked for anonymity, lest he suffer a similar fate.

Cuomo, a car guy who can’t recognize the limitations of automobile travel or the fact that he has no control over traffic or other drivers, thinks that the subway he controls is beneath him because of all the things that can go wrong. Talk about a telling psychological reaction to a collapsing subway. So instead of understanding the travails of subway riders, instead of knowing what his stewardship of the subways has wrought, Cuomo feels emasculated by the trains because he’s not the one behind the wheel, zooming down the 8th Ave. line with his pedal to the metal.

After two terms of this attitude toward transit, it’s clear that no matter what his allies claim, no matter the absurd gaslighting campaign from the TWU, no matter his supposed support for some congestion pricing plan, Andrew Cuomo doesn’t care about the subways and isn’t going to be the one to save them. He’s sucked all the oxygen out of the room arguing over the legal technicalities of control over the subway and the allocation of money for his aesthetically-orientated Enhanced Station Initiative without addressing how the taxpayer base — New York City residents and workers — is the same whether the money comes out of the state budget (as it should) or from the city. He’s spent years siphoning dollars away from the MTA’s budgets, whether for state-run ski slopes losing money or road projects. He has constantly refused to sign lockbox legislation that would put stringent strings on his MTA budgetary sleight-of-hand, and he barely endorsed Andy Byford’s Fast Forward plan until his lack of support was on the verge of becoming a political albatross.

Meanwhile, on his watch, as we all know, progress at the MTA has slowed to a crawl. The agency was enjoying boom times in the late 2000s as focus on investment seemed to be catching up with reality, and as service improved, ridership boomed. But on Cuomo’, delays and problems have become daily occurrences as ridership has shown year-over-year declines for the better part of his second term in office. These trends are not stopping without significant cost reform and investment, and Cuomo hasn’t embraced either yet.

Meanwhile, on the capital side, Cuomo has dragged his feet (some say to make the city look bad) so that with the opening of the rebuilt WTC Cortlandt station on Saturday, there are no big-ticket subway expansion items under active construction right now. A few years ago, we had the 7 line extension, South Ferry, Fulton St. and the Second Ave. Subway all ongoing, and today, we have the promise of Phase 2 of the Second Ave. Subway and nothing else. For a 21st Century city, this lack of growth and progress is a travesty that will hinder New York’s promise for decades to come.

On the edge of primary day, that leaves New Yorkers with a governor who doesn’t support transit, openly disdains it and won’t change his tune. Make no mistake about it: Governor Cuomo is in charge of the MTA and the New York City subways, and he has been a bad steward of the crown-jewel American subway system. If he earns himself the nomination on Thursday or a victory in November, I don’t expect anything to change, and neither should you. A Cuomo third term will bring more of the same: He’ll use the subways for photos ops without forging ahead on real progress, and without an aggressive primary challenger pushing him to act, do you think he’ll continue to embrace Andy Byford and his earnest push for improvement? After all, the subway, a lifeblood of New York City and the state, is too passive for the Can-Do Press-Release governor.

Categories : MTA Politics
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New renderings of the BQX show the light rail running on a cloud day, a perfect metaphor for the project’s stormy future. (Source: NYCEDC)

To coincide with the unveiling of yet another heavily-subsidized East River Ferry route last week, I wrote piece for Curbed New York laying out the case against ferries as a solution to the city’s mobility crisis. Those familiar with my skepticism toward subsidizing ferries will be familiar with the argument: These boats are a low-capacity mode of transit with a ridership that skews wealthy, and spending $6.60 per ride on top of $500 million in capital subsidies is a giveaway at a time when the city needs to wrest control of its transportation future for the benefit of those in transit deserts and not just those who live in waterfront condos.

Boats can serve as a small complementary piece to a larger holistic puzzle, but the de Blasio Administration doesn’t have a big-picture vision when it comes to transit. This lesson was on full display again later in the week when the mayor revived his dormant streetcar plan, the Brooklyn-Queens Connector, with a press conference touting the release of conceptual design report for the BQX. The report, available here as a PDF, was originally billed as a feasibility study, but it falls short in assessing the merits of the project and instead presents updated designs. And updated designs are in there a-plenty.

The new route is shorter, with a southern terminus in Gowanus rather than Sunset Park after neighborhood activists fought against new transit by leaning on a spurious anti-gentrification argument, and the project is now more expensive, with a price tag of $2.7 billion. Along with this new price comes the recognition of the reality that value-capture alone will not fund the project, and the city, living through the same federal administration the rest of us are, now believes the feds will be willing and generous funding partners to the tune of $1 billion. On the plus side, the entirety of the BQX will now enjoy its own dedicated right-of-way (and include the elimination of around 2000 parking spots from Red Hook to Astoria).

The new route of the BQX starts in Gowanus rather than Sunset Park. (Source: NYCEDC)

Oh, and construction isn’t set to begin until early 2024 with the line entering revenue service in June of 2029, eight years after the last year of the de Blasio administration. You will be excused for being extremely skeptical of this timeline and the entire project, which many have taken to calling transit vaporware.

The details of the report are worth perusing. Ridership estimates remain at around 50,000 per day with the bulk traveling between Greenpoint and Downtown Brooklyn, and while the routing largely mirrors the G train for significant stretches, a run through the Brooklyn Navy Yard could deliver New Yorkers to a growing job center that isn’t particularly well-served by anything other than infrequent local buses. The design too has gotten an update with catenary wires, rather than off-wire power, due to concerns that “were not sufficiently advanced to reliably power the expected BQX ridership demands and frequency of service” and salt corrosion during winter could erode reliability.

The timeline for BQX construction leaves much to be desired. (Source: NYCEDC)

But what was once billed a self-funding 16-mile route is now an 11-mile route with a massive budget hole. Value capture will fund only around $1.7 billion, and the city will require federal funding at a time when the feds are actively hindering investment in urban public transit. Like every New York capital transit project these days, costs have already gone up by 30 percent before an EIS is published, let alone a shovel hits the ground, and the timeline, with EIS, ULURP and preliminary design efforts stacked instead of parallel, seems designed to grind the pace of work to a halt.

Ultimately, it’s tough to say if the BQX is a good project or just a good-enough project. As many others have said over the years, the Brooklyn-Queens waterfront isn’t exactly a transit desert, and other high-ridership SBS routes or cross-borough connectors would be a better fit for high capacity, frequent light rail. The city could realize many of the benefits of the BQX route by running more frequent bus service and prioritizing bus service over this corridor. It also wouldn’t take 11 years and $2.7 billion, a good portion of which won’t materialize from the feds despite Bill de Blasio’s insistence, to accomplish these goals.

But I haven’t been quite the skeptic as others have, and two statements issued last week offer a peek at a potential light rail future for NYC that doesn’t involve cooperating with a recalcitrant Albany. “With the city embroiled in a transit crisis, the BQX will serve as an innovative model for how to build new mass transit sustainably and equitable, while creating new, good paying jobs along the way and making access to those jobs easier,” Jessica Schumer, executive director of Friends of the BQX, said.

A group of transit bigwigs — Richard Ravitch, Tom Prendergast, Jay Walder and Lee Sander — echoed these sentiments. “There are few, if any, projects that match the potential of the BQX to expand opportunity in an equitable way for a wide range of New Yorkers,” the four former MTA heads said in a joint statement. “And we know that light rail, with dedicated right of way and high ridership capacity, is by far the best mode of transit to accomplish that. Our international competitor cities are smartly and successfully investing in that mode of transit, and its encouraging to see New York City taking steps to keep pace on the global stage. Just as important, the BQX will finally put the City of New York in control of its mass-transit destiny by creating a model for impacting millions more in other areas of the ciyt through additional light rail lines.”

As a philosophy regarding light rail planning, no one here is wrong: A true, well-designed light rail network with a strong funding commitment, a realistic price tag and a reasonable construction timeline could give New York City a flexible alternative to the MTA for setting its own transit agenda while increasing access between disparate neighborhoods and across transit deserts. But it shouldn’t take longer for NYC to build an 11-mile line than for Paris to build most of the Grand Paris Express, and the analysis required to create a network simply hasn’t been conducted yet by the city. The BQX is one model, and it’s not a particularly robust one considering the hitches obvious in the new plan. But the seeds of a potential transit future controlled by the city are there if someone wishes to grab them. That’s reason enough to pay attention even if a healthy dose of skepticism is warranted.

For more instant analysis on the new BQX plan, check out this thread of mine on Twitter from Thursday. I cover similar ground but in 240-character bites.

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NYC Transit may put a pause on rolling out Select Bus Service routes for the next few years. (Photo by flickr user Stephen Rees)

With so many moving financial parts these day, it can be tough to keep track of where the MTA stands fiscally. Gov. Andrew Cuomo’s state of emergency declaration regarding the subways and his subsequent Subway Action Plan, largely ineffectual so far, has allowed the MTA to bypass traditional procurement channels while adding nearly $1 billion to its expense ledger. Meanwhile, relying on the promise of a strong economy and steady fare revenue, the MTA’s out-year financial projections remain as tenuous as ever, and it seems that some cuts may be on the table.

The story took a few weeks to develop after the MTA released its July Financial Plan last month largely because the cuts are buried throughout, but it broke last week in an article in The Wall Street Journal noting that cost reductions required, in part, to find money for the Subway Action Plan may lead to bus and subway service cuts. Most notably, the MTA may be pausing rollout of Select Bus Service routes for at least four years. Here’s how Paul Berger reported it:

The Metropolitan Transportation Authority plans to stop expanding a bus rapid-transit service, reduce bus fare-evasion patrols and cut dozens of positions for subway car cleaning as it seeks $562 million in cost reductions during the next few years.

According to emails reviewed by The Wall Street Journal, some MTA board members are concerned that the authority is taking such cost-savings measures even as it hires more than 1,000 workers under a plan launched last year to improve subway service, known as the Subway Action Plan.

MTA board member Carl Weisbrod, an appointee of Mayor Bill de Blasio, wrote in an Aug. 5 email to fellow board members and senior MTA officials: “It’s hard to escape the conclusion that we’ve giveth with one hand through the Subway Action Plan, and we’ve taketh away, to some extent, through these service cuts.”

In response, MTA Chairman Joe Lhota called the shifting funds a “redeployment of resources,” but a cut is a cut by any name. By holding back on Select Bus Service routes, other than those currently being planned and those needed on 14th Street for bus capacity during the L train shutdown, the MTA saves $28 million, a drop in the $500 million bucket the agency is trying to cobble together. It seems like a Pyrrhic victory as Select Bus Service routes are among the best in the city with touches of a modern bus system, including pre-boarding fare payment and dedicated lanes. So why cut them?

The answer is not quite as black-and-white as it seems, and the MTA may not be cutting off its nose to spite its face. In my view, it takes far too long for the MTA and New York City to roll out Select Bus Service routes. There are far too many hyper-local considerations given far too much weight while the needs of the riders are often backburned by trumped-up concerns over parking spots. We’ve seen this play out again and again and again. So a four-year pause may impact only a handful of routes.

But that’s a bad reason to accept the pause. The better reason is embedded in the MTA’s 500+ breakdown of the financial plan [pdf]. Led by Andy Byford, New York City Transit is currently amidst an analysis and reassessment of the entire citywide bus network. This includes every route, every stop and every 20th century element of the bus network including the boarding process. By 2021, Transit expects to amidst a major rollout of a new fare payment system, and the agency will have completed its review of the bus network. It doesn’t make sense to spend political capital and dollars on rolling out Select Bus Service routes now that may not fit in with the redesigned bus network, and that’s a good enough, but not great, reason to pause so long as the MTA commits to resuming introducing proper SBS (or even real BRT) routes to NYC once the bus turnaround plan is unveiled.

The wild card here though is city politics. Since buses uses city streets, NYC DOT is essentially in charge of permitted Select Bus Service routes, and SBS has become one of the few tools the city has to control its own transportation infrastructure. (Whether the mayor has used this tool efficiently or effectively or frequently enough is open for debate, though I’m sure you know my thoughts.) By pausing SBS rollout and by not informing the city or even working with them to cushion this announcement, the MTA has put itself at odds with the city agency that can by a major ally in pushing forward on the eventual bus turnaround plan. This strikes me as bad city-state politics and a move that could be quite costly down the road.

So ultimately, I think this was a case of bad presentation and mixed messages in a 500-page financial document. The MTA shouldn’t penny-pinch the only good approach to new bus routes over a matter of $28 million spread out over four years, but the agency shouldn’t be introducing new bus routes until it has a handle on how to improve bus service overall on a citywide basis. It’s OK, but not great, to halt Select Bus Service rollout so long as it comes back with a vengeance when the Bus Tunraround plan is unveiled. And if there’s no Bus Turnaround plan, well, that’s a different issue entirely.

Categories : Buses, MTA Economics
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