Along with everyone else, the MTA is trying to stave off financial doom. Unlike with Lehman Brothers and the other failed financial institutions, though, the MTA’s fiscal troubles stretch back decades, and the transit agency has been trying to come up with a fix long before Wall St. headed south last month.
For the last few months, Richard Ravitch and his commission have been trying to assess the MTA’s financial situation. The panel’s recommendations are due in approximately six weeks, but it may be too late to solve some of the MTA’s more crushing problems before the agency must adopt a strict budget with cuts to services — but not, as far as I can tell, cuts to train and bus service quite yet.
William Neuman, writing in today’s Times, has more on this alarming story:
When Gov. David A. Paterson created a commission last spring to recommend a solution to the Metropolitan Transportation Authority’s financial troubles, the panel’s head, Richard Ravitch, a respected former chairman of the authority, quickly took on white knight status, with officials and politicians hoping he would ride in before the year was out to save the authority from disaster….
But the stock market’s troubles and the global banking crisis have accelerated the authority’s financial slide to the point that officials are now working to carve deeper cuts in their budget plans for 2009. And it appears likely that there will be insufficient time for the State Legislature to act on the Ravitch commission’s proposals, meaning the authority will be forced to adopt an austerity budget with both service cuts and fare increases by late December, an official said.
Further, because of sharply falling revenues, an even larger increase in fares and tolls might have to be considered than in the authority’s earlier budget plan, which called for an 8 percent rise in revenues from those sources, the official added. All that sets the stage for a winter of wrangling among the governor, the Legislature, the mayor and authority officials, who will be under intense pressure to rescue the region’s mass transportation system.
“We clearly are going to be laying out some very painful stuff,” MTA CEO and Executive Director Elliot Sander said to Neuman. “We are going to have to balance the issue of fare increases and service cuts and also see how we can cut our budget further. Those are the three pieces to the puzzle and we’re just in the process of dealing with those trade-offs.”
From what I’ve heard, the MTA is loathe to cut actual service, and when The Times and officials start talking about “service cuts,” everyone gets worried. In reality, the first services to go will be bureaucratic in nature followed by maintenance and cleaning staff. Only after the agencies are pared to their bare essentials will the MTA brass consider reducing the frequency of trains.
But the MTA and New York City can ill afford these cuts. In a bad economy, the government should be investing in its infrastructure. Spending on the subways could spur on job growth and economic development in areas awaiting investment. Ensuring safe, reliable and steady access to the city’s core business areas via public transportation is just as important for the region’s economic health as anything else.
In the end, we’ll have a clearer picture of the MTA’s short-term financial outlook when Ravitch drops his report during the first week of December, but early signs are not favorable. It could be a cold winter for the MTA.
14 comments
Instead of doing the usual things like not clean the stations, why not try triage and shut down the most underused line? How much money would that save and how much would it disrupt service?
Then maybe the riders on the other lines won’t have to share the trains with rats.
They are not likely to shut any line in its entirety. There is no NYC subway line that is so far underutilized that it no longer makes sense to operate it. If subway service is cut, the most likely scenario is that you’d see fewer late-night and weekend trains on some routes.
Looks like the SAS and ESA are done for
Phase I of the SAS is almost fully paid for by federal funding. The other phases will likely be pushed off because they are currently unfunded.
I believe, but am not positive, that the ESA is also fully fed funded. So it and phase 1 of the SAS will be built.
Just wait until the commission recommends congestion pricing, tolls on the east river bridges, and higher tolls on the MTA bridges. Watch the suburban politicians freak out.
I’ve said it before and I’ll say it again. The MTA can save millions of dollars a year by consolidating all of the duplicate’s that they have between the different branches. LIRR, Metronorth, NYCT, Bridges & Tunnels can trim to one human resources department, accounts receivable, accounts payable, ect.
There is no reason they all have to separetly order supplies and uniforms from different vendors rather than together and get a better bulk rate.
Better yet I think the MTA should be broken apart and all of these companies should operate individually. Transit which includes the subway and buses brings in by far the most money but is forced to supplement the other areas leaving it underfunded.
That’s really nonsense. Bridges & Tunnels subsidize subways and buses, not the other way around. That’s why the MTA was created in the first place—to use toll surpluses to fund mass transit.
Besides, you can’t have it both ways. First you say that they should create economies of scale, and then you say it’s better yet to split the whole thing apart. Your first idea is the better one, but a much larger problem is that the MTA has relied too much on debt. A lot more of the MTA budget goes to debt service than the things you mentioned, like office supplies and uniforms.
My main point was that the subways ans buses make the majority of the money for the system with over 7 million riders a day. But a huge amount of that money gets sent to LIRR and Metronorth.
The reason the MTA has relied to much on debt as you stated is the fact that it is an in between agency. It’s NOT a city agency and it doesn’t get treated like a state agency even though it technically is.
Eric, the subways make some money, but the buses don’t. In fact, NYCT has the same farebox recovery ratio as the Metro-North (40%) and only a somewhat higher one than the LIRR’s (30%). However, within NYCT, the subway has a recovery ratio of 67%, which implies an NYCT bus recovery ratio of 22%.
I understand your point but what also has to be included is the fact the employees on the LIRR and Metronorth make wages that are in line with the industry standards while the empoyees in NYCT are paid much less. 6 dollars an hour less for train operators/ engineers for an example.
What this means is that if NYCT didn’t underpay its employees, its recovery ratio would be even lower.
I see your point of view eric. Either the system centralizes all the way or decentralizes all the way and not remain half-assed like the last 40 years.
I would start privatization with surface transit and end the MTA’s monopoly on it. After meeting stringent government guidelines and oversight, the MTA should license private buses and vans to service the city’s bus routes. With out the exclusivity that the old private companies had, the competition would foster innovation. Perhaps they’ll start offering their own express routes that could take pressure off of the subways and even commuter rails.
SAS Phase I and ESA both have a mixture of Federal funding and other sources, but those sources are dedicated, and not likely to be curtailed. Even in better times, there were many people who doubted whether the SAS would ever get beyond Phase I, but we have quite a few years to solve that problem, since Phase I is still nowhere near done. In contrast, the MTA’s operating budget is an acute emergency now.
I agree that the Ravitch commission is likely to suggest congestion pricing and tolling the East River bridges. It’s not just suburban politicians, but also outer borough politicians, who will complain.
There’s an interesting article on the manner in which the Bush Administration has systematically removed resources for transit at the transport politic.