After spending the early part of this week highlighting politicians who do not seem to care enough about transit to educate themselves, we find ourselves faced with a high-ranking New York official who nearly gets it. Christine Quinn, speaker of the City Council, has engaged in a very public campaign to support the student MetroCard program and to speak out against the MTA’s proposed service cuts. She’s nearly on the right track with some of her words, but I am wary of fully supporting her plan.
At a rally on Tuesday to protest cuts to the student MetroCard program, Quinn spoke about throwing Council support behind the student rides. More importantly, she stressed how the City Council would consider more funding for student transportation during the spring budgeting sessions and how she would prioritize this item. “I recognize there is a city responsibility in this funding, and we are willing to have that conversation and see what can be done,” Quinn said.
For this, I applaud Speaker Quinn. She is doing what a politician should be doing. She is promising to explore how the city can fulfill its funding obligations to the both the MTA and the New York’s students, many of whom rely upon free transit to get to and from school. She recognizes that these cuts aren’t something the MTA would choose to do but that years of financial neglect from the city and state have backed the MTA into a corner.
But beyond this proposal, Quinn’s actions get a little murky. In addition to her vow to find more money for student rides, she calls upon the MTA to take four actions immediately to stave off the cuts. Those are, according to her action center, as follows:
- Reallocating 10 percent of direct stimulus aid to MTA operating expenses ($91.5 million);
- Using budgeted PAYGO capital funds for operating ($50 million); and
- Reallocating 10 percent of additional stimulus transit aid to State to operating ($30 million).
- Do not implement any actions without a full set of public hearings.
First, let’s dispose of the last item. Numerous politicians have tried to criticize the MTA for passing a budget a week after it was unveiled and with no input for the public. This ignores the reality that the MTA Board was, by law, required to pass a balanced budget before the end of the 2009 calendar year and had just three weeks from the time the budget crisis was announced to do so. The agency has pledged to hold hearings this year and will reevaluate the proposed cuts before they need to be implemented in June.
The other three are, in effect, the Gene Russianoff Plan, and I’ve already voiced my reticence over using capital funds for operating deficits. In a nutshell, my fears concern the precedent such a financial move would set and the MTA’s dire need to continue investing in system maintenance and expansion even in the face of a short-term operating deficit.
If the agency is to reshuffle its budgets to cover its operating gap with capital funds, such a move will become the lazy legislature’s fallback every time a hole opens up in the MTA budget. Albany will begin reducing capital expenditures in order to meet operating budget projections, and the agency’s capital budget will empty faster than a raided piggy bank. If this is the last-gasp proposal to stave service cuts, I would support it, but until every other available long-term funding option has been exhausted, we cannot fund the MTA through a short-term reshuffling of its two separate balance sheet.
Right now, Quinn is an ally of transit, and she should remain so. I won’t sign her petition yet, but I won’t begrudge those who do. Until we know that other options — bridge tolls and congestion pricing — simply will not work, we cannot rob from the future for a short-term fix today. It won’t solve the systemic problems with the way the MTA is funded and will only exacerbate these shortcomings in the future.
5 comments
I would have signed her petition if she’d let me put on a signing statement. She will not, so I won’t. I’ve already written her this week about appointing a transit friendly transportation commissioner. I think I’ll let this sit out there for a little bit before correcting her on this.
First lets deal with your issue regarding “precedent” (precedent being something that happens before something else). There is plenty of precedent for using Federal money for operating funding. Only since the Gingrich Contract on America have transit operations been excluded from Federal funding. Before that Federal operating aid was the order of the day. And only the MTA, among all American transit properties, has continued to oppose to Federal Operating Assistance. Like the MTA most of the other systems (Chicago, St. Louis, Kansas City )dedicated funds are cyclical and no one has dis-invented the business cycle (many of those systems are entirely dependent upon sales taxes, imagine where there budgets have been going the last couple years) and fare increases, service cuts and layoffs are the order of the day. So it is not so much an issue of precedent as shedding the legacy of Gingrich and the Contract on America.
And, we are in unusual times of financial crisis. Here one should distinguish between maintenance and state of good repair and system expansions (“shovel ready” or not). And normal maintenance, which would be counted as an operating cost in almost any other enterprise public or private, has always been exempted from the strictures of the federal funding prohibition. Much normal maintenance is paid out of federal aid and has been since the glory days of Speaker Gingrich.
Also, no one is advocating ending the expansion of the system but nonetheless many people recognize the fallacy of expanding a system (Second Ave. Subway, East Side Access – LIRR, 7 Train extension and Fulton Street) at the same time service is being radically cut because of immediate budget concerns.
SAS and ESA have long been programs the MTA has needed and for decades advocated for with the support full of political forces in both parties. Fulton Street and the 7 Train have been sort of late comers, one the progeny of Shelly Silver and the other of Mike Bloomberg. These same leaders have not found the will to provide the same level of historic support for the capital plan even while adding these very expensive projects. The 7 extension particularly is radically changing land use patterns and real estate values in a particular neighborhood and benefiting a particular group. Ironically, (or maybe logically) the 7 Train and Fulton Street will be the first projects completed leaving the SAS and ESA behind. Clearly less complex on many levels the 7 Train will be on line long before any realistic completion date for SAS and ESA. Fulton Street is burning money and apparently will burn more.
So, if Mayor Bloomberg has found the money for the 7 train extension, let him find the money for the student passes and the operating deficit and let the Feds participate in funding the daily operations.
The logic that if the Feds pay operating the State, City and riders will have no compulsion to provide operating support should be turned on its head. The other side of the coin is forceful. If the riders must pay for Capital projects by paying off the bond debt out of operating and paying directly in pay as you go funds why would the State and City feel compelled to support the capital plan.
The logical path here is to accept the Federal Operating support offered and stretch out, not terminate, the huge capital projects and fully fund state of good repair projects. That wouldn’t actually solve the enormous debt issues but it would keep the system running to get through this crisis.
It should also be noted that the funding provided last Spring by the legislature only paid for two years of the five year capital plan in any event. So, the capital funding problems were not caused by shifting Federal capital money to operating accounts.
Niccolo, great post.
Bringing up the 7 train extension is a red herring. It is being funded by a $2 billion bond issue that is backed by tax revenues generated from real estate development in that area. Those funds could not be made available to other capital projects or operations. Nor did those funds cause a diversion from other projects.
The point about Fulton St., however, can not be overstated. Huge waste of money.
As far as suffering from cyclical tax revenues goes, the most volatile is rarely mentioned. The real estate transaction tax provides a flood of tax revenue in good times, and drops significantly. The deviation of this tax from GDP growth/contraction can be as much as an order of a magnitude!
Isolating operational and capital budgets is, in my view, excellent policy. They should remain separate. Especially in New York, where politicians haven’t been able to resist the urge to demagogue transit funding issues since the nickel fare.
As far as the issue of the Federal Government funding operations goes, I hope that if that is ever again implemented that it includes work efficiency standards, from management to hourly workers. Its not fare to ask for greater subsidies for an organization that is rife with feather bedding.
[…] $45 million grant, but the MTA needs more. The authority needs both New York City — as Christine Quinn noted earlier this week — and New York State to up its student subsidies significantly in order to […]