Home MTA EconomicsDoomsday Budget Senate approves questionable MTA package

Senate approves questionable MTA package

by Benjamin Kabak

When the Senate finally approved the MTA funding, our state’s less-than-august legislature did so with nary an air of finality. They do so more with the last sigh of someone fed up with the topic.

For months — since February — the state legislature has dealt with transit issues on a near-daily basis. They have known for over a year that the MTA’s financial Doomsday would arrive in 2009, and they did nothing. While Gov. David Paterson solicited a Richard Ravitch-inspired plan that would have cut congestion while funding a transit renaissance in New York, our backwards legislature couldn’t stomach the costs of that plan.

In the end, the Senate acted six weeks after the MTA’s self-imposed deadline passed. They acted at the 11th Hour and at the behest of a very unpopular governor. The resulting compromise — discussed in detail here — are far from satisfactory, and while the ink has hardly dried on the approved bill, it is receiving a less-than-enthusiastic reception. William Neuman and Nicholas Confessiore have more:

The State Legislature passed a series of new taxes and fees late Wednesday night meant to keep New York’s base subway fare from rising above $2.25 this year. But the hastily drafted bill, approved largely along party lines, raised many questions about how the plan would work and how effective it would be in stabilizing the struggling Metropolitan Transportation Authority.

In the short term, the plan would appear to raise significantly less money this year than in some earlier projections, although legislative staff members said it would be enough to get the authority through the year. There were also questions about how a 50-cent surcharge on yellow cab rides in New York City would be collected from thousands of taxi drivers and owners…

Questions also remained about the authority’s capital spending program, which is only partially financed in the rescue plan.

The bill’s problems though are immediately evident. First are the economics behind it. The MTA is facing a deficit this year of $1.8 billion. Since the taxation and fee structure won’t be enacted until part of the way through 2009 though, the money may not be there to cover the whole deficit.

According to reporters from Albany, the MTA will receive just $1.1 billion this year. Where the other $700 million will come from is up in the air. A recent move by the MTA Board to lengthen the agency’s fiscal year to 18 months may provide them with an opportunity in 2010 to balance the books this year. The answers though are hazy.

Of additional concern are problems of collection. As the Daily News editorial board explained yesterday, no one knows how to collect this taxi surcharge. The Taxi and Limousine Commission has never enacted a city-wide fee of this nature, and considering the relatively loose and independent reporting procedures for cab fares, there is no simple system in place here.

Beyond the short-term impact though are the long-term problems. As John Petro from the Drum Major Institute detailed in a short post entitled “MTA Rescue Spineless” and on SAS yesterday, Albany is again forcing the MTA to borrow to maintain a state of good repair and fund necessary upgrades and expansion plans.

“Without long-term investments in capital needs, the MTA will forever be facing budget shortfalls, deferred maintenance, crumbling stations, and stalled projects,” he writes. “We will be back at square one soon enough. This vicious cycle needs to end.”

Petro is spot-on. The approach to transit in New York City is completely broken. We may have averted Doomsday today, but these issues will not go away until the state’s approach to transportation undergoes a massive reform. As long-time SAS reader Boris said earlier this week, “Even among New Yorkers there are many people who don’t think the subway can, or should, be better than it is. It’s all they know.” That attitude is a recipe for sub-par transit in a city aiming to keep up with smarter and better-equipped global competitors.

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Ariel May 7, 2009 - 8:43 am

What the NYT article fails to mention is how this plan fails to put tolls on the bridges, a move which would have also cut down on traffic congestion. By increasing the fare but not increasing the cost of driving, this plan is a recipe for disaster on our roads.

Hopefully when the MTA comes begging for more money in near future, congestion pricing gets into the debate. We will need it more than ever.

Scott E May 7, 2009 - 8:52 am

It also never mentioned where the schools’ payroll-tax reimbursement money would come from (and why that revenue source wasn’t considered as a direct MTA subsidy). There are a lot of what‘s in this bill, but it’s pretty vague on the how‘s. I’m convinced that the cost of reimbursing schools and collecting cab fares will prove to be more trouble than its worth.

rhywun May 7, 2009 - 9:00 am

Now Rockland County wants out of the MTA. I’m sure we’ll be hearing more of that in the days to come.

Josh Karpoff May 7, 2009 - 9:14 am

There was a pretty decent opinion piece in the Daily News about how Albany should clean up its own act before it starts criticizing the MTA. http://www.nydailynews.com/opi.....index.html

On the point about Rockland County wanting out of the MTA, the politicians there are some of the most short sighted idiots imaginable. Currently, the number of Rockland commuters using the MTA’s Transit services is pretty low in comparison to driving, but that’s an unsustainable idea (and I don’t mean just environmentally). The Tappan Zee, I-287 and the GW Bridge can’t support any more car traffic. To think that Rockland doesn’t benefit from the MTA is an absurd construct, as is the one that Rockland County residents seem to have a god-given right to drive their single occupancy vehicles into the city.

Benjamin Kabak May 7, 2009 - 11:50 am

I wonder how much money the MTA would save by ending service before Rockland County. It probably costs far more per passenger to run trains that far out than it does to operate the subway. So let’s end service out there and then we’ll see how Rockland County the entity feels about it.

I’m all for enacting these drastic measures if it means people actually wake up to the reality of how important transit is.

E. Aron May 8, 2009 - 11:50 am

As a resident of Rockland County from 1993-2008, I never found that the MTA serviced the county, aside from the TZ Bridge, which is the biggest catastrophe of a road that I’ve ever traveled, it often takes 30 minutes to travel the 3 miles to get to Westchester due to permanent construction, and the GW.

Of course Rockland wants out of MTA funding BECAUSE IT IS NOT SERVICED BY IT. Trains that go to Pearl River are run by NJ Transit. Get your facts straight. Our “god given right” to travel by car into the city IS THEIR ONLY CHOICE.

Scott E May 7, 2009 - 9:56 am

Thanks Josh for that link. While all papers have lambasted Albany in various editorials, this one is the best I’ve seen so far. Unfortunately it’s a little too late (and its unlikely the pols would have given it much attention even if it came earlier) and now we’re stuck with this mess.

I wonder how long this concoction of payroll-taxes, payroll-tax refunds, taxi-surcharges, car-rental taxes, cell-phone taxes, drivers license fees, registration fees, and free bridges will go on before it gets re-drafted into something more equitable and administratively feasible. (I also wonder what the public perception of Malcolm Smith is, especially in his own district, and how this fiasco has changed it)

The Daily Dig » INFRASTRUCTURIST May 7, 2009 - 12:06 pm

[…] York passes a hastily written, not-very-satisfying-to-anyone MTA bailout bill. It doesn’t raise enough money and nobody knows how to collect the money it does raise. […]

pete May 7, 2009 - 12:34 pm

So what happened to the service cuts? Are they still on or not? And how long will it take for the MTA to reverse/change its fare hikes, or will the fare goto $2.50, then to $2.25 a few months later?

Benjamin Kabak May 7, 2009 - 12:36 pm

The service cuts are clearly off. The new fare structure will be released either tomorrow and Monday and will go into place in mid-June.

Scott E May 7, 2009 - 1:01 pm

am NewYork reported that the 15% MetroCard bonus will likely go back up to 20%. That means the effective price of a ride goes from $1.70 (85% of $2) to $1.80 (80% of $2.25). This one seems to have been overlooked by most of the mainstream media, if it’s indeed accurate. Just passing along the info…

MTA to vote on new fares on Monday :: Second Ave. Sagas | A New York City Subway Blog May 7, 2009 - 2:41 pm

[…] for Monday, May 11 at 10 a.m. to vote on a new fare structure. At the meeting, planned in response state-approved rescue package, the Board will vote to discard the planned service hikes and will establish the new […]

Frank May 8, 2009 - 11:57 pm

The damn problem is that the MTA is running up costs that it really doesn’t need to. Sure, plenty of stations could use rehabilitation, but do they really NEED them? Then they’re spending all this money on Air-Conditioning for all the platforms, Special signs to tell you when the train will arrive- It’s really just plain excessive, and at the worst possible time. Some things need to be done. Maintenance on all bridge to keep them running, done. Repairs on Subway cars to keep them moving, done. The 2nd Avenue Subway- it’s been delayed for years, and we need it (It’s too crowded on Lexington), done. But do we need state-of-the art stations on every one of the stops on the Second Ave Line? Do we have do buy new cars for the SIR? Should we build a bridge from Long Island to Westchester? It’s all waste. The stations don’t have to be ugly, but they could be less flashy. The Subway cars don’t have to have their axles flying off, but they can be maintained. And we’ve all put up with the heat on the subway. Get over it. The MTA simply isn’t making an effort to cut costs instead of service, and they aren’t giving up some things so the fares won’t have to be increased. Soon, because of wasteful spending, the whole 2nd Ave. Subway will be shelved again for another 90 years. It’s nonsense. There are ways to cut costs that simply aren’t being done.

NY1 Poll: Few New Yorkers trust the MTA :: Second Ave. Sagas | A New York City Subway Blog May 22, 2009 - 12:22 pm

[…] the Senate finally voted to approve an MTA rescue package, it was clear that the beleaguered transit agency had lost at least one battle. While millions of […]

The Infrastructurist | The Daily Dig June 19, 2009 - 1:26 am

[…] York passes a hastily written, not-very-satisfying-to-anyone MTA bailout bill. It doesn’t raise enough money and nobody knows how to collect the money it does raise. […]


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