The MTA has a problem. And no, I’m not talking about the duel threats of steep fare hikes and rampant service cuts. Instead, I’m talking about the capital campaign. The cash-strapped MTA needs $30 billion for its next five-year capital plan. Where that money is going to come from is, right now, anyone’s guess.
We know about the MTA’s current operating budget issue. The MTA has to find a way to balance a budget currently $1.2 billion in debt, and when they unveil their plans later today, the riders are going to suffer. But long term, the MTA has to remain in good shape.
For the past twenty years, the powers-that-be have pushed an aggressive capital expansion and modernization plan. Every five years, the MTA submits a new plan for approval and funds a significant part of that through borrowed funds and government contributions. But in a bad economy, the money has practically dried up, and as William Neuman explores in The Times today, the very future of the MTA is at risk if capital sources dry up.
“The authority,” he writes, “is uncertain how it will pay for the next five-year capital spending plan that could cost as much as $30 billion.”
The fare increases and cutbacks are meant to keep the system running next year. The capital plan is meant to keep it running for years beyond that through the purchase of new equipment, maintenance of tracks and renovation of stations…
The current capital plan expires at the end of next year, and the authority must submit a new five-year plan to the state for approval even as it seeks additional money to plug its operating deficit. Officials have estimated that the capital plan could cost $25 billion to $30 billion, much of which would be financed through bonds that the authority would repay over many years.
Both budgets are important, but Mr. Brodsky and others worry that the long-term needs will be lost in the tumult of settling the more immediate need. “It would be a terrible mistake to take whatever resources may be available and use them all on the operating side,” Mr. Brodsky said.
In the article, Richard Brodsky, Democratic assemblyman from Westchester, sounds like the MTA’s biggest booster. “The need for investment in the system is gargantuan,” he says. “Twenty-five years from now what we do on the capital plan will resonate much more loudly than what the debate is going to be about fare increases.”
He’s not lying, and in fact, the MTA chair backs him up. “Not enough people recognize that the system is vulnerable, and if you don’t keep spending this money it will go back to the way it was in the ’70s before you can blink an eye,” Dale Hemmerdinger said to Neuman. “All the focus and all the talk so far has been on the operating budget, and the capital budget runs out next year and we need to know the money is going to continue to flow.”
But Brodsky has also been one of the biggest thorns in the MTA’s side. From his position as head of the MTA’s oversight committee, he opposed congestion pricing, a progressive scheme to deliver $400 million annually earmarked for the MTA’s operations budget. He urged the MTA to ask the assembly for more money only to see the governing body deny the authority needed funds.
It’s very true that the MTA needs to find a way to ensure its capital campaigns continue. We can’t afford to see the subways slip back into the state of disrepair so rampant in the 1970s. That is indeed more important that arguments over short-term service cuts and fare hikes. But we also need politicians willing to put their necks out there to fund transit. Something has to give; what will it be?
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Wow, this is really crazy. I do not believe Albany cares too much when it comes to the matters of the MTA and its NYC Transit system other than to collect the taxes from the revenue that the MTA NYCT supports. In other words, as long as they can get their taxes from the people and businesses that use NYCT to get to and from point A and B, then they are happy. Any investment or challenges that face the MTA and especially NYC transit is mostly ignored.
And I still do not know why the congestion pricing was “voted” down (vote or no vote, it was pushed aside) when it cold have been very helpful even in times like this where people are going to NEED better transportation to get to and from work.
Does anybody know why the congestion pricing failed when it was supposed to be just a 3 year trial?
Anyway, it will be interesting to see what happens. Maybe sometime next year I will be laid off.
It failed because Bloomberg is politically tone-deaf. He got elected using just his own money, so he never had to develop the skills of getting people to support him. He contributed to the state Republican Party, and then expected the Democratic Assembly to support him. He never courted anyone in the Assembly or the Senate to become a high-profile legislative supporter to counter Brodsky. He insisted his plan and only his plan could come to fruition, and in fact opposes tolling the free bridges. Overall, he was interested in his own ego more than in reducing traffic. Of course the Assembly wasn’t interested in his ego – what good would it do?
Does anybody know why the congestion pricing failed when it was supposed to be just a 3 year trial?
Programs like this tend to be permanent, so the fact that it was technically only a “trial” didn’t sway any votes.
Part of the problem, as Alon Levy notes, was that Bloomberg did a poor job of lobbying in Albany. But the deeper issue is why the legislature needed any lobbying at all—why it wasn’t just obvious to them that this ought to be done, especially as the Federal government was going to fund the implementation costs.
The real issue is that the costs of congestion pricing were going to fall disproportionately on the outer boroughs and upstate, because those are the people who drive into Manhattan. Legislators representing those areas felt that too many of the benefits were tilted to Manhattan, while their own constituents would get stuck paying for it.
Your a conductor? you won’t get laid off.
The congestion pricing debacle could have easily been avoided by exempting commercial vehicles. Instead they chose to push it on many thousands of outer-borough residents who rely on their cars for their livelihood, and thus the plan became politically untouchable. It’s almost as if the proponents didn’t *want* it to pass.
It’s true that there are thousands of outer-borough residents who need cars, but it’s just as true that there are millions who don’t, and who are going to have to subsidize and clean up the polluting habits of the minority of drivers. What is so sacred about trucks that they need to be tax-subsidized?
I would rather see a commercial vehicle “subsidy” than thousands of small businesses dying because either (a) the cost of entering Manhattan is so high or (b) lost business because they refuse to enter Manhattan.
On the other hand, they could always just increase the price of anything delivered to Manhattan by $8. Problem solved 🙂
They’d raise the price, and make up for it by being able to make deliveries faster and using less gas. There are deliveries from Jersey to Manhattan, despite the tolls. The Outer Boroughs will survive tolls, too.
As I read the article, this is the first shot towards cutting back – in whole of part – the SAS. Anyone else agree?
It depends what you mean by that. I still think the first phase (already under construction) will get built, but the date will probably slip. Even in the best of times, the MTA seldom got any big project done on time. But the later phases were always long-shots, and the odds just got longer.
We understand the difference between operating costs and capital costs, but one ultimately feeds into the other, doesn’t it?
Let’s say that Phase 1 is completed, precisely according to design and schedule. Suddenly, the operating costs just swelled. There are three more token booths to staff, additional “Q” trains to maintain headways, upwards of 30 Metrocard machines to maintain, three new platforms and gigantic mezzanines to clean,and hefty electric bills to keep the stations cool in the summer, lots of new escalators and elevators to keep running, and tons of bright yellow “This elevator/escalator is out of service until…” signs to be printed when they break. If the public restrooms in each station aren’t closed by day one, they most certainly will be by day two.
On the other hand, replacing old R-32 trains with shiny new R-160s will save on operating costs. The newer trains are more reliable, have “graffiti-resistant” interiors, re-generate electricity when breaking, and can be shifted to other lines without spinning hundreds of rollsigns.
In the short term, yes, you can separate capital from operating expenses. But in the long run, one has a profound effect on the other.
Good point about the signs–I never thought of that. Nevertheless, I continue to hate the ugly signage on the newest trains. One of my pet peeves is seeing that RED-colored 4 or 5 coming down the tunnel, and then having to squint at the barely-legible orange lettering on the side. End rant.
Dust off the Kheel plan. Make subway/bus riders an offer they can’t refuse: ride for free, day and night. Everywhere in NYC, all the time. Free. I understand the political obstacles, but if now isn’t the time to start some rumbling for this, when would be?
That was complete fantasy even in good times.
Fantasy meaning the numbers never added up or fantasy in the sense that it could never be instituted? The latter seems to me an incongruous position considering it’s not three weeks since the country elected one of the last guys president most people ever would have expected.
The numbers didn’t add up.