As the MTA struggles with the political fallout of the rampant service cuts the authority may need to implement to cover its budget, officials everywhere are looking for answers. We know that some advocates are pushing a move to cover the operating gap with capital funds — a misguided idea at best — but other officials are searching for ways to provide for a steadier stream of transit funding and not just a one-time fix. The answers are out there, but are any of these proposals a real solution?
Right now, the MTA can look to three sources of potential revenue: the city, the state and the federal government. So far, Mayor Bloomberg has been quieter than most in this brouhaha. He campaigned on transit but has done nothing to support, let alone reform, the MTA since winning reelection next month. He hasn’t pledged to cover student transit costs; he hasn’t tried to renew his calls for congestion pricing or East River Bridge tolls; he hasn’t looked at ways to further fund the MTA. For now, at least, City Hall is a non-starter.
Although the mayor’s silence is disappointing, the words spewing forth from the City Council are downright alarming. As Chris O’Leary detailed at On Transport, the City Council doesn’t have a clue about how the MTA works. After cutting funding for years, City Council members criticized the MTA for a legally required vote this week and claimed that a meeting in the works for months “ambushed” the city. Most of the Council members seem to support the quick fix of moving capital funds.
Up in Albany, things are simply a mess. Sen. Pedro Espada wants the MTA to sell its real estate holdings. In a letter to Jay Walder, he wrote, “The MTA must prioritize fiscally prudent lease and sale of assets before deciding to leave children, seniors and hard-working citizens stranded without a safe, reliable and affordable means to get to and from work, school, grocery shopping and doctor’s appointments.” Selling assets in a down real estate market is a great way to minimize potential gains. I say pass.
Meanwhile, Sen. Brian X Foley is so confident of the MTA’s fiscal state that he is already proposing to roll back the payroll tax. Because the tax provided the MTA less than expected, Foley wants to lower than tax by 68 percent in Suffolk County and 34 percent in Nassau County. Do I really need to tell you how dumb of an idea this is right now? Foley would leave the MTA with even less money than it current takes in.
Sheldon Silver is still a hope, but he hasn’t endorsed tolls or congestion pricing yet. His district stands to lose the most from these service cuts, and I’ll look at him more in depth later today.
For his part, Gov. Paterson, while not proposing any new ideas, seems to recognize the MTA’s limited options. Speaking yesterday with WOR’s John Gambling, Paterson questioned how much the MTA could really save by eliminating jobs and overtime. He echoed Jay Walder’s call to “take the place apart” and noted, in so many words, that reinstating the commuter tax could solve many of the agency’s financial woes. For now, that idea remains the Holy Grail of funding and a political non-starter. I wonder though if Walder and Paterson could succeed in overhauling the bureaucracy of the MTA. It would be a tall undertaking but a vital key to reforming transit in New York.
In the end, for a temporary fix at least, the MTA might be able to turn to the feds. Speaking on New York 1 earlier this week, Secretary of Transportation Ray LaHood expressed the Obama Administration’s support for transit’s future in New York. “It is a priority for President Obama and those of us at the DOT to make sure that cities have good mass transportation,” he said. “We’re willing to work with the state of New York, with the governor with the mayor and others in the legislatures to make sure that New York has a first rate transit system and a transportation system.”
LaHood’s comments suggest to me that the President and LaHood would prefer to see their money go toward expanding mass transit’s reach in New York and not just keeping a struggling authority afloat for a few more months. But if push comes to shove, the feds, with their deeper pockets, just might be, for now, the MTA’s best hope.
13 comments
I believe it’s RAY LaHood.
That’s an excellent overview, to which I would add a few points.
While the Mayor wins no points for leadership, I don’t think he has the political influence to actually change anything. Two of his signature initiatives (the Olympics and Congestion Pricing) stalled in the legislature.
I believe Sheldon Silver did endorse tolling the East River bridges, the last time it came up. If the Senate had passed the measure, he said the Assembly would as well. The Senate is really the problem, and there Silver has no influence.
“Right now, the MTA can look to three sources of potential revenue: the city, the state and the federal government”
How about its own riders?
This is all much ado about nothing. A temporary conversion of a small fraction of construction funding would do the trick. Just like you or I would tap into our 401ks in a hearbeat before we would watch our kids go hungry.
And it wouldn’t need to be anything beyond a one-time shot, either. Half the MTA workforce are boomers, with thousands actually in their 60’s. The retirement rate has doubled in the last 12 months, and is set to double again this year. It’ll only be a matter of months until Jay Walder can have attrition levels most cost cutters can only dream about, and then some.
The truly daunting problem on the horizon is the experience drain that will come once the avalanch toward NYCERS gets into full swing. The tasks performed by hourly rate TWU’s in those tunnels and maintenance shops may look simple. But those tasks have to be coordinated and choreographed with a degree of preciscion approaching what you find on the flight deck of an aircraft carrier.
Frankly, I think you’re a bit foolish if you think that diverting the construction budget would be “temporary.” They did that in the 1970s too, and it took years to dig out of the problem. In Washington, Congress has been “temporarily” raising the debt ceiling for about five decades.
I agree that if the only way to feed my kids were to raid my 401k, I would do it in a heartbeat. But in this case, raiding the capital budget is clearly not the only way to fund transit. It is the typical politician’s gimmick of ignoring a problem, and hoping it will magically go away. It seldom does; usually, the problem just gets bigger.
If the Feds want to see their aid money to the MTA go to system expansion, then a solution is just some “salami exchanges” (Marx Brothers reference) away.
Get the Feds to cover the 2010-2015 Capital Plan “Pay As You Go” money AND the shortfall, then the MTA can redirect the money that would have been “Pay As You Go” to the short term short fall.
This is the best for both parties. The Feds get to say that all of their aid is going toward system expansion, while the MTA gets to stay afloat by redirecting some money to the current shortfall.
Frankly, what’s a bit foolish is to earmark a king’s ransom for construction of East Side Access to serve at most a hundred thousand commuters, who then can stop spending a thousand a year on metrocard transit from Penn Station to the East side. Another hundred million gone from the operating budget. Hooray.
The MTA is a public entity. It’s job isn’t to make a buck like a for-profit company, but to provide a badly needed public service.
The ESA project isn’t JUST about the 100,000 commuters a day who have to back track East across Manhattan to get to their jobs in the morning, it’s also about EXPANDING service into Penn Station from LI without disrupting the fragile scheduling balance that is Penn Station right now. If the MTA had instead expanded Penn Station directly, which they’ll need to do eventually, it would have disrupted a station that is already over capacity.
Once ESA and ARC are up and running, the MTA can work on a way to possibly expand Penn Station’s track layout.
All of this is toward the idea of getting as many commuters from Long Island out of their cars and into trains as possible. If the transit commute is perceived as too much of a hassle, then people stick to the “freedom” of their cars.
The lost revenue of the Times Sq. Shuttle and #7 train will be a drop in the bucket compared to the increased revenues from the LIRR fares from more LIRR riders.
You are confusing two separate issues. If East Side Access is a waste of money, then we shouldn’t build it. If there are other, better ways of expanding the system, we should pursue them.
But that is not what you advocated. Instead, what you suggested was a “temporary” diversion of the capital budget, after which we would presumably resume funding the projects that are still on the table, including ESA.
If you want to argue that the funded projects are the wrong ones, go ahead. If you want to argue that system expansion isn’t needed at all, go ahead. But don’t argue for a “temporary” diversion of funds, when you know (or ought to know) perfectly well that such diversions are practically always permanent.
To be clear, my arguement is twofold. First, that the capital budget as a whole could sustain a one time hit of a few hundred million without suffering irreparable damage. And second, that certain of the capital projects are so over the top frivolous that they represent an opportunity to tap money with less consequence. A worthwhile project like SAS, on the other hand, should if anything get a larger share of the pie if that would have any efficacy to speed up completion. Unfortunately, its always been exactly the SAS which the MTA has always managed to send to the end of the line whenever priorities were being handed out, e.g. whenever tunnel boring machines were being imported.
Sorry, I just realized I wasn’t clear about which shortfalls to cover with what.
The Feds should cover all of the capital construction costs, including the shortfall in the 2010-2014 Capital Construction budget AND the money that the MTA would have used as capital construction “Pay as you go” funds.
The MTA should then cover it’s short term shortfall for the 2010 budget year with the Pay As You Go funds, but only after the federal funds are approved.
Even in the best of times, the Feds generally do not supply capital funding without side-by-side local investment. Remember, New York is not the only state that would love to have Federal money. If you add up what the states ask for, it’s far more than Washington will ever have to give out. Among other things, the Feds figure that the worthy projects are those the states consider important enough to spend their own money on.
On top of that, these are not the best of times. The Federal government is under huge deficit pressure. It’s a fantasy to believe that Washington will pick up the whole 2010–14 capital budget. Why should taxpayers in Iowa and Oklahoma pay to expand the subway, when state Senators from New York weren’t willing to impose any burdens on their own citizens?
I just don’t understand how our elected officials DO NOT know how a public authority under their purview works!!!