Home MTA EconomicsDoomsday Budget A possible MTA bailout with strings attached

A possible MTA bailout with strings attached

by Benjamin Kabak

mtaleadership As the MTA has lobbied in Albany for a state-sponsored rescue package, I have been waiting for the state legislature to bring the hammer down on the transit authority’s leadership. On Friday, they did just that as sources in Albany suggested that an MTA rescue plan may come with conditions requiring changes at the top of the MTA leadership structure.

Pete Donohue and Glenn Blain broke this development in the Daily News, and according to the two reporters’ sources, the MTA bailout could hit the floor of our bicameral state legislature as early as today. The Albany-based Blain and News transit guru Donohue report:

State legislation designed to rescue straphangers from massive service cuts and fare hikes could emerge in Albany as soon as Monday, sources said Friday. If approved by the state Assembly and Senate, the plan not only could put the Metropolitan Transportation Authority on firmer financial ground – but also under new leadership.

The rescue plan, which proponents hope is finalized over the weekend, merges the MTA’s unsalaried, part-time chairman’s position with the full-time chief executive officer’s post.

And it’s unclear who would get that powerful top job. MTA Chairman Dale Hemmerdinger already has a lucrative full-time position running his family’s real estate conglomerate. Transit advocates and some elected officials have praised current CEO Elliot Sander’s running of the bus, subway and commuter train network. But Gov. Paterson may bring in a fresh face to declare a new era for an authority still struggling – fairly or not – with a negative image solidified over decades.

On Saturday, Mayor Bloomberg voiced his support for the Albany plan and Elliot Sander. “Lee Sander has done a great job. He’s worked very hard, but first let’s see what the law is. If it’s changed I would certainly be happy to give my opinion to the governor,” Bloomberg said. “In terms of who should run it, if he were to pick Lee or not, I just don’t know.”

It makes political sense for the state legislatures to require something from the MTA in return for a tax-and-toll plan. A restructure and a removal of some of the MTA’s chief executives would also send a signal to New Yorkers that their representatives understand the frustration — properly directed or not — that subway riders feel with MTA leadership.

That said, Elliot Sander isn’t the problem with the MTA, and in fact, Elliot Sander is probably the best advocate the MTA could hope to have leading it through troubled times. Sander may not be the sexy political choice to head up the transit agency, but he’s a transportation wonk through and through. He knows what city transit agencies need to succeed, and he has the academic and practical experience necessary to lead the MTA through and beyond its current crisis. With a blank slate, in fact, he would bring true vision to the MTA.

In the end, it’s tough to see where this will go, but in a few weeks, one way or another, things will be different at the MTA. We’ll see record service cuts and fare hikes or some new faces at the top.

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4 comments

Scott E March 9, 2009 - 7:37 am

This sounds crazy to me… it’s like firing the coach instead of putting accountability on the players. (Players being the local politicians, unions, inept low-bid contractors, and pretty much anyone who stands in the way of the MTA’s success). It’s more of a PR move than anything by Paterson: “Look, we’re doing something, we’re making changes!”

Yes, there are roles and individuals in the organization, as well as elements of the organizational structure itself, which could use some change, but replacing Sander isn’t likely fix them. A better “bailout” response would be similar to what the feds are giving the banks and auto-companies: show us your plan to return to financial sustainability, then show us your progress periodically.

Instead, this article makes it seem like they’re throwing in the towel for the season, and banking the future on a new coach and a high draft pick.

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peter knox March 9, 2009 - 9:01 am

Just remember, in April it will be two years since construction began on the SAS, and not one inch of the subway has been built yet. They are still moving utilities and preparing to build the subway. Because the MTA was allowed to perpetrate the fraud of dividing their budget in two, creating separate capital and maintenance budgets, we have to go through this farce of raising taxes and fares. When are going to hear the truth about how much even phase one of the SAS is going to coast and how long it will to complete? Even before they started destroying the quality of life for thousands of people along 2nd Ave., back in 2007 the MTA pushed back the completion date from 2013 to 2015 and the cost shot up about 500 million dollars. Now we are in 2009, and the MTA has not begun to build one inch of either the two mile tunnel or of the four massive stations they have planned. Soon we will hear that the cost has risen to well over 5B and that the project will not be complete until at least 2017. Then in two more years it will be another 500 million and two more years. Wake up, people! Where is the sanity?

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Marc Shepherd March 9, 2009 - 11:55 am

You need to read the stories of what it was like when the original subways were built by the cut-and-cover method. They way they’re going about it now is the less-intrusive way of doing it. Cut-and-cover was far, far worse in terms of neighborhood impact, though of course it was cheaper.

I do not see what you find “fraudulent” about separating the capital and maintenance budgets. If anything, it is more transparent. The fraud, if there was any, was committed by Governor Pataki, who insisted on putting the capital budget on a credit card. He knew, or should have known, that he was merely kicking the can down the road, and others would need to face the consequences of his irresponsibility.

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NY Post: Sander could be replaced soon :: Second Ave. Sagas | A New York City Subway Blog March 18, 2009 - 1:36 pm

[…] week, word emerged that a Senate bailout may come with the requirement of change atop the MTA leadership structure. I called it a petty and short-sighted move by the Senate. They shouldn’t penalize Sander for […]

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