Home MTA Economics Ravitch-led commission faced with daunting task

Ravitch-led commission faced with daunting task

by Benjamin Kabak

In early April, as the depths of the MTA’s financial problems came into view, Gov. David Patterson asked former MTA Chair Richard Ravitch to lead a blue-ribbon panel. Ravitch’s task is to find and present the various ways through which the MTA can find the money it needs for both the $3-billion gap in its current capital plan and the $17-billion abyss in its next five-year construction program.

It is a daunting task indeed, but if anyone is up for the challenge, it is Ravitch, who helped lead the MTA out its darkest days. In 1979, Ravitch took the reins of the beleaguered transit authority. When he stepped down four years later, he had implemented the first five-year plan and had the dangerous and decrepit subways on the rebound. Twenty five years after stepping down from his MTA post, Ravitch is set to lead what Patterson, in his April 8 speech announcing the commission, called “a blue ribbon panel of business leaders, civic leaders and economists.”

“Basically, I want the commission to examine three basic issues,” he said. “One is how to balance the subsidizing of the MTA Capital Plan, through the subscription of those who use the services and a broad balance of taxes for businesses and the rest of the public. Secondly, what we want to look at are the elements of Mayor Bloomberg’s plan that all of us like, and that perhaps we can still weave them into the process. And finally, we have to get the MTA out of its habit, which is 25 years old, of refinancing and basically covering debt with excessive borrowing.”

In acknowledging the weight of this task, Ravitch also noted the near-impossibility of adequately addressing this charge. “I am not sure it is anything but a Sisyphean task, but I will undertake it with energy and enthusiasm,” he said to The Sun on April 9.

An an overview piece released this week by the Gotham Gazette, Graham Beck, the managing editor of Transportation Alternative’s Streetbeat newsletter, tackles the challenges facing Ravitch and offers up the usual suspects as revenue sources:

To cover all these costs, the MTA has four potential funding sources: fares from subway, bus and commuter-rail riders; city, state and federal government contributions; an increase in existing taxes dedicated to transit, like the mortgage recording tax; and new revenue streams slated for transit, such as congestion pricing.

An increase in all four of these sources will almost certainly be needed if the MTA wishes to maintain the level of service, reliability, cleanliness and safety that 8.5 million daily riders have grown accustomed to and if the agency hopes to expand and improve the system.

Another fare hike within the next 20 months or so seems inevitable at this point. Without the congestion pricing revenues, the MTA has been pushed into a corner by the New York State legislature. But at the same time, congestion pricing may not be so dead. As Beck writes, Ravitch and his commission are sure to suggest traffic fees as a means to securing the financial future of the MTA.

Beck also speculates, as per prior Regional Plan Association studies, that the commission could turn to payroll and commuter taxes or an increase in the gas tax as well. The panel will also probably urge the state and federal governments to up their contributions to public transportation as well.

Right now, we know what the commission will produce, and it’s hard to argue with any of their outcomes. It also will be hard to imagine many — or any — of their proposals garnering much support among our elected officials. We can only hope that, when the time comes to fight for the money and the measures, those in favor of them wage a better PR campaign than the failed effort put forth by Mayor Bloomberg to back his congestion pricing scheme. The money is there; we just have to find a way to funnel it to the MTA.

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ScottE May 6, 2008 - 8:59 am

Those are the only four revenue sources? What about real-estate? There are concession stands out there that remain unused; advertising space which is underutilized, and acres of land above rail yards in Manhattan and Brooklyn which can be put to better use.

Rent out space for an ATM or a Coke machine at some commuter rail stops. Let McDonalds put a restaurant at Smith-9th Street provided they incorporate a new subway entrance (and make sure they maintain the escalators).
Do something productive with the old City Hall station. Lease the radio waves in the stations and tunnels to cell phone companies (in a deal that will work). Lease the sound waves at 42nd Street/Times Square to Sony Music, so they can promote their latest releases through speakers in the vast mezzanine (then people can go to the record store and buy it!). Sell the sound rights at the Rockefeller Center station to NBC.

The MTA has so much real estate in the region that I find it hard to believe that they can’t count on it as a revenue stream.

Streetsblog » Today’s Headlines May 7, 2008 - 9:01 am

[…] Plan to Cut Traffic, Fund Transit (News)Ravitch Commission Results Won’t Be Popular With Lawmakers (2nd Ave Sagas)Fewer New Yorkers Opting for Taxis (News)Paterson Gets a Grip on Port Authority Spoils […]

Marc Shepherd May 7, 2008 - 9:42 am

I’m all in favor of leveraging under-utilized real estate, but I don’t think it can produce the kind of dramatic financial lift that the MTA needs. It would probably be a distant fifth.

Some of ideas you mentioned also have long lead times (constructing a restaurant), and others would have only a de minimis effect (City Hall station).

Second Ave. Sagas | Blogging the NYC Subways » Blog Archive » After the hike, MTA ridership still on the climb May 15, 2008 - 8:40 am

[…] with many people working behind the scenes to plot the plan’s next move. In all likelihood, Richard Ravitch’s commission will recommend a form of congestion pricing to fund the MTA. And when that time comes, the […]


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