The rehabilitation plan for the Smith-9th Sts. subway stop is just one of more “deferred” projects. (Photo by flickr user Victoria Belanger)
Ah, to yearn for the innocent days of November when it seemed like the MTA would actually be rehabbing the stations along the Culver Viaduct while they did the necessary engineering work on the Viaduct itself. Or perhaps we could revisit the days of early June when the MTA said the 4th Ave. station wouldn’t be getting an overhaul, but the Smith-9th Sts. station would enjoy a face lift.
Now, it’s all gone.
One day after we heard the rumors, the MTA issued a series of financial statements that include alarming real estate tax projections and what officials are terming deferrals for various capital projects — including the Culver Viaduct station rehabilitation plans — in an effort to cull together nearly $3 billion in short-term savings. The long-term prognosis for the MTA is hazier and bleaker.
William Neuman reports on this alarming and expected story:
In a series of public meetings of authority board committees, officials said the authority would be forced to cut projects valued at $2.7 billion from its 2005-9 capital spending program, largely because of soaring costs on construction projects already under way.
The projects being cut include 19 subway station renovations and important projects for the modernization of subway signals and repair facilities. The authority’s chief executive, Elliot G. Sander, said those projects were expected to be included in the authority’s next five-year spending plan, which begins in 2010. But he acknowledged that the authority did not yet know how it would find the financing for that plan.
Officials also said the revenues from taxes on real estate transactions, which have buoyed the day-to-day operations of the transit system in recent years, were falling off at an alarming rate, resulting in a shortfall this year of $122 million. Revenues from the real estate taxes are on track to end the year about $280 million below budget projections.
With fuel costs skyrocketing, the MTA finds itself already $60 million over budget for 2008 with no sign of economic relief in sight.
According to Neuman’s report, the MTA is going all-out with the trimming. Foremost among the projects cut is the station rehab plans for the Viaduct. The Smith-9th Sts. station will remain as it is now, with boarded up windows, peeling paint and a generally unappealing aesthetic vibe. Joining it in rehab limbo will be a series of Brooklyn stations along the D and N lines and some Bronx 6 stations. The Brighton Line rehab plans may be saved simply because they aren’t too far along in the planning process.
The MTA is also sacrificing behind-the-scenes upgrades needed to keep the trains running. It is scraping parts of an in-progress signal modernization plan; it is doing away with proposals to install vents in the tunnels to clear the air in case of a fire emergency; and it is starting to cut aspects of their big-ticket items (but more on that later today). The MTA is, in other words, beginning to sacrifice quality due to money, not because they want to but because they have no choice.
In defense of these actions, the MTA officials say they will reapply for funding for these plans when the 2010-2014 capital plan comes up for review next year. These projects, officials maintain, will see the light of day. Of course, the problem with that assertion is that the MTA is facing capital budget deficits upwards of $10 billion, and unless Richard Ravitch can save the day again, we are facing a subway system in dire financial peril.
The problem, of course, lies with the way our public transportation network is funded. In short, it isn’t. The MTA relies on real estate taxes at the whim of a market and puts too much pressure on capturing fare revenue for operating and expansion plans. There is no secure dedicated source of revenue.
Apparently, no one learned any lessons from the 1970s. With the subways in shambles, the city collapsed. As the city rebounding and the subways did too, New York enjoyed a nearly unprecedented boom. Now, as the nation’s economy slows, our public transit network is paying the price of negligent overseers. Until Albany realizes that a healthy MTA is the key to the economic well-being of New York City, the agency is in for a rough ride.
20 comments
With the subways in shambles, the city collapsed.
It was the other way around: with the city in shambles, the subway collapsed.
Is the Culver viaduct renovation still being planned, and the renovation of the stations along the line being cut? Does that mean that Smith and Ninth will still be closed for a year starting in 2009, but will open in the same condition it’s now in after the closure?
That’s my take on it. They have to rehabilitate the Viaduct itself because of structural issues. But the stations won’t get the planned treatment unless the money materializes for the 2010-2014 Capital plan. These cuts are, ideally, just temporary and preliminary.
Looking at the numbers, I’m not sure I understand how they add up. The MTA has to make $2.7 billion worth of cuts “largely because of soaring costs on construction projects already under way.” Does that mean existing projects cost more than expected (which pretty much always happens with public projects), or are construction costs really rising faster than expected? I don’t think there can be $2 billion of extra spending here, because while raw materials and fuel are getting more expensive, labor is not, at least not significantly. (I’m assuming the remaining $0.7 billion can be accounted for by the reduced real estate income, fuel, and various other unforeseen MTA expenses).
Construction costs have been rising incredibly quickly in the last few years. First it was the housing bubble that made land more expensive. Then it was steel, then fuel, then anything made out of oil. Labor costs have also been increasing, though not very quickly. Nominal income in the US is still growing at a few percent every year, though nowadays the growth is all lost to inflation. What is more, the BLS underreports inflation through creative tricks, so an MTA official might think inflation is at 3% a year when it’s actually 7% a year.
They should just raise the fares now. Seriously, I don’t care anymore. Raise the single ride to $2.50, raise the 7 and 14 day passes accordingly, and charge me $100 for my monthly pass. It’d still be cheaper then driving.
After that, they can go after the tax money. The longer they wait, the worse it’s going to get.
I agree with Todd. It’s still all cheaper than driving, benefits the environment and puts much needed $$ in the coffers. In addition, funding capital programs keeps more jobs on the table: design, construction, etc.
A more efficient transit system saves huges amounts of money in the long term. Ooops. Sorry. I forgot. Nobody thinks long term any more. Never mind.
I would hope that when/if economy totally crashes, the Feds put in a depression-era type WPA, and everybody goes to work rebuilding the transit system.
Set up a Senate investigation into the MTA and it’s practices immediately.
To what end? It’s abundantly clear that economics are behind this problem along with decades of State Senate neglect. An investigation conducted by the people who are, in part, responsible for this mess is sure to uncover nothing new or useful.
To use the findings as evidence that the MTA should be dissolved.
And replaced with what though? I’m sympathetic to the idea although I don’t think the New York State Senate is any position to investigate any other quasi-governmental body. But if you dissolve the MTA, what are you replacing it with that’s going to do a better job?
I’m hoping it’d be a Congressional Senate investigation since it involves a three state public authority (I’ve written to Schumer and Clinton about it.)
I’d split the subway system along the lines of the IRT, BMT, IND, and SIRT. Lease their operations and maintenance to private firms. They can set their own fares, but would have to compete for customers, tenants, employees, and ad space.
Make the bus routes non-exclusive and allow non-subsidized, private vans, buses, etc to operate along them, after of course, passing an annual inspection of City, State, and Federal standards for safety and integrity. They too can set their own fares, have Metrocard readers installed, but must compete for customers, employees, and ad space.
How are you going to separate the IND and BMT, when the two systems share tracks and lines? And what is the purpose of separating the IRT farezone from the IND/BMT one?
In accordance to the pre-Unification configuration of the 3 systems, the new BMT would sublease the usage of it’s predecessor’s tracks to the new IND, and vice versa, until a time when either company can reroute their lines to new or existing tracks.
The separate fares (is one of many ways that) will reinforce competition as the 3 companies use discounts and premiums to meet demand and/or increase ridership.
Why three companies instead of two? Give the customer more real choices I always say, besides if the employees of one company were to go on strike (as non-municipal employees have a right to) then the other two (along with it’s other competitors: the LIRR, Metro-North, and PATH) could pick up the slack.
No, the separate fares will make the system less cohesive, without enhancing competition. The pre-unification system used uniform fares. In Singapore, where there are two different operators, not only is the fare structure uniform, but also one can freely transfer between the two systems.
In addition, what you propose for the unions will not happen, and if it does, it’ll be a disaster. Workers often have industry-wide unions, certainly in the case of public transport. If unions were merely company-wide, then the companies could play their workforces against one another, forcing them to engage in a race to the bottom. The most effective form of collective action, the strike, will become toothless if it can only affect one third of the system at a given time.
And this assumes the corporate governance will improve with privatization or competition. There’s nothing that suggests it does. In Tokyo, both the private rapid transit systems and the public one run profits. In Hong Kong, where the single corporation running the system was privatized in 2000, the system’s been running operating profits since before privatization. Moscow Metro, which is quick, efficient, and popular, has always been public. In New York itself, competition has generally hurt the system by encouraging duplication of routes; this was most evident with the IND, but even before the IND the routes were set by the city, rather than by the private operators.
Alon: Don’t forget London either. Transport for London had to take over Metronet’s Tube contracts. That’s probably the most blatant recent example of the failures of private operations of public transit networks.
I respectfully disagree.
Foremost, I believe separate fares, with neither price ceilings nor floors, are the heart of competition. The uniform nickel fare was used to the detriment of the IRT and BRT/BMT.
The TWU will still be around after privatization, but like it’s airline division, a strike in one company doesn’t imply that there will suddenly be an industry-wide or system-wide general strike.
That 1/3 of the system that’s hamstrung by a strike will still have to answer to it’s employees, as well as it’s aggravated customers (who are now using their competitors en masse), the city, state and federal governments, but now it’s worried shareholders, lenders, and subcontractors.
From my understanding, the current state of the Tokyo and Hong Kong systems argue in favor of partial if not complete corporate governance.
I agree wholeheartedly that the profitability of the Hong Kong Metro prior to privatization and the immaculate state of the Moscow Metro are testaments to well run public sector agencies. They should be rightfully applauded. But going all the way back to my very first argument, I don’t see any hope of the MTA, as is, to come close to these levels of quality. I feel the MTA simply does not have the incentive to do more than keep the system on life support.
Dissolve the MTA; and even if our subways become semi-privatized like Tokyo, I’ll still argue for deregulation and competition, but that’s me.
As an aside:
The new tracks and tunnels of the Dual Contracts system were laid out by the city’s Rapid Transit Commission and the Board of Transit Control (not the IRT and BRT). Where the IRT and BRT ran duplicate routes is due to the street grids of Manhattan and Brooklyn. Indeed, I feel the duplicate routes helped add capacity to Lower Manhattan, Midtown, and Downtown Brooklyn.
Don’t get me started on the IND 🙂
Alon, I feel that this debate will run longer than a Subchat.org thread. Shall we agree to disagree?
[…] going to revisit those Second Ave. Subway roots. As the MTA struggles to meet budget projections by deferring planned capital improvements and cutting various services, the Second Ave. Subway is facing the same fiscal problems. Already […]
[…] weekend, Times reporter Javier C. Hernandez ventured out into some of the 19 stations that will see their renovation plans deferred. As expected, commuters who frequent those stations aren’t too pleased to hear that the MTA […]
[…] in June, when the MTA announced $2.7 billion in capital construction costs, subway advocates around the city groaned. Among those cuts were plans to rehabilitate 19 stations […]