An FAQ on the MTA’s budget crisis

By now, it’s no secret that the MTA Board had to approve the Doomsday budget yesterday. It’s little comfort to know they did so under duress. The law requires them to pass a balanced budget, and to achieve that untenable goal in 2009, the MTA will have to cut services and raise fares unless our state legislatures act.

Now, we have a buffer of a few months. As the various governing bodies in New York debate the merits of the Ravitch report, this budget won’t start to come due for a few months. In March, the Board will vote on the fare hikes. In June, the service cuts and fare increases will put implemented. That gives the city’s pro-transit forces a little under six months to get the ball rolling.

As Doreen Frasca, an MTA board member, said yesterday, “What I’m going to do, and I know a lot of other people on this board are going to do, is go up to Albany, look our lawmakers in the eye, and say to them, ‘Why can’t you put transit first on the agenda for a change?’” We should all join her.

For now, though, I want to tackle something else. As I read through the comments on the City Room post about the MTA Board meeting, I was struck by how ill-informed New Yorkers are. In an effort to avoid thinking about Civil Procedure in advance of my rapidly-approaching 1:30 p.m. final educate the masses, I thought I’d try to respond to some of the misconceptions people have surrounding the MTA. So after the jump, some questions and my answers.

As a caveat, these answers may sound to be apologetic on behalf of the MTA, but I’m a neutral third-party in favor of full funding for public transit in New York. I’m not affiliated with the MTA and am, at times, supportive and, at times, critical of the agency’s operations.

In the end, my answer is that the MTA isn’t to blame as much as New Yorkers would like to blame them. The people to target are our elected officials who refuse to vote for congestion pricing, who balk at tolling the East River bridge tolls, who won’t fund mass transit. These things aren’t free; someone will have to shoulder the costs. Will it be the riders or will it be everyone? That’s up to us.

Anyway, here we go.

Lee Sander, the MTA’s CEO and executive director, makes $300,000 a year. He gets paid too much. During a budget crisis, he should accept a salary cut.

This line of reasoning seems to be the number one complaint City Room readers had. Apparently, the CEO of a massive, multi-department, five-borough agency gets paid too much. First, the MTA has to pay their executives to draw in the top transit people around, and Sander certainly qualifies as a leading public transit expert. Second, $300,000 just isn’t that much for a CEO in his position. Were the MTA a completely private venture, he would be making millions. Sure, it’s little compensation, but some reality is in order here.

Anyway, let’s propose that Sander take a whopping 50 percent salary cut (and, somehow, doesn’t quit). The MTA would still be facing a deficit of $1.99985 billion instead of $1.2 billion. If a 0.0125 percent reduction in the debt somehow makes people feel better, it’s simply because they’re vindictive and don’t like the MTA.

Why is the MTA pouring billions of dollars down the drain on Second Ave.? They should use the money for the SAS to cover the deficit.

The MTA has two distinct budgets: One covers the operating expenses while the other covers capital construction. The two are completely separate and are funded through different mechanisms. The MTA cannot just transfer money from one to the other. Even if they could, the vast majority of funding for the Second Ave. Subway is federal money earmarked for the project. If they abandoned the project, they lose the money. In other words, it just can’t be moved from one side of that budget divide to the other.

How can people commuting each day afford to pay $5 to and from work?

This one is by far my favorite spurious line of argument. The vast majority — nearly 90 percent — of straphangers right now do not pay the $2 base fare. They pay reduced fares through the pay-per-ride discount or they pay under $2 by using unlimited ride cards. In my MetroCard challenge, I paid $1.11 per ride over the duration of the card; the average fare is somewhere around $1.40.

Anyone who employs this argument is battling straw men because the only people who should pay the full $2.50 under the new scheme are tourists and one-time riders. Anyone who commutes 10 times a week on the subway and isn’t using a pay-per-ride or Unlimited Ride card is simply throwing money away.

A $104 30-Day MetroCard is too expensive.

I agree. A $104 MetroCard is too expensive. I don’t know why the MTA doesn’t propose a London-like solution. In the Tubes, the non-discounted base fare starts at £4.00 while the Oyster Card fares are over 50 percent less. The MTA should really propose a $4 base fare and a modest increase in the cost of Unlimited Ride cards. But because so many people use the discounted fare cards, they need to recoup the money from somewhere.

Either way, under a $2.50 base fare, a $104 30-Day card will pay for itself on the 42nd swipe. I can’t imagine anyone who commutes to work not using the subway 42 times in a 30-day period. It’s still a good deal, albeit an expensive good deal.

Why isn’t the MTA cutting staff and reorganizing their bureaucracy?

To an extent, the MTA is going to try to reorganize, but they are battling a strong union. According to reports, the MTA will weed out redundant positions at MTA HQ, but even the most efficient MTA wouldn’t be able to cut away at a $1.2 billion deficit. In an ideal world, New York politicians would be able to rebuild the MTA to be a lean, mean transit machine, but as it formed as a patchwork of various agencies and has remained as such since 1968, it’s not as efficient as it should be. To accomplish this would require a man with a Robert Moses-like vision and determination for the MTA.

That’s that. We’ll pick this up later as more questions arise.