Home MTA Politics Should the City have greater MTA control?

Should the City have greater MTA control?

by Benjamin Kabak

As the MTA has spent the last few years careening from one financial crisis to another, it has become abundantly clear that Albany isn’t going to help the New York Metropolitan Area’s transit network stay solvent. As our state representatives have refused to acknowledge the vital role public transportation plays in the region’s — and indeed the state’s — economy, our legislatures have offered half-hearted measures with faulty economic bases while ignoring comprehensive solutions with economic, environmental and social rationales. It has been an utter derogation of responsibility.

In one sense, then, state officials are simply fulfilling the prophecy of the MTA. Politicians originally created the state authority and the New York City Transit Authority, its city-based precursor, to avoid direct voter ire over transit authority problems and, in particular, fare hikes. Prior to the founding of the NYCTA, the mayor and the city’s Board of Estimate had to propose and vote on all matters relating to transit funding, and when it become fiscally necessary but politically infeasible to issue a fare hike, a political stalemate set in.

The authorities were supposed to insulte transit from politics and allow the policy and financial experts to run the show. Arguably, the opposite has happened. Although experts of varying degrees have found themselves in positions of power and influence at the MTA, the politicians can now use the authority as a whipping boy and scapegoat for their own lack of leadership on issues of transit funding. It is one giant mess.

Now and then, political commentators propose to restore more control over the New York City-centric transportation network to the powers-that-be in the Big Apple. Why should a state-established authority have so much power over the subways and buses when those are vital parts of an inherently local transit network? To that end, Chris Smith in this week’s New York magazine makes the case for more city control over the MTA:

As long as the state is divesting, the mayor should make a bold play for the transit system. Bloomberg proposed a city takeover in his first campaign, only to become the latest in a long line of mayors who complain about their powerlessness to improve subway and bus service. Here’s a real chance to do something more than politically convenient carping. Certainly the city could never handle the $8 billion transit budget on its own. Yet Bloomberg should find a creative way to leverage the state’s weakness into a bigger city presence in MTA decision-making.

In exchange for increasing the city’s contribution to MTA funding, Bloomberg could get more seats on its board, or a say in naming the MTA’s chief; then the city could help shape the long-term financial plan the MTA badly needs. That might not be the most monumental of mayoral legacies. But it comes down to what he’s always staked his career on: competence. And this city is going nowhere if we depend on Albany to keep the trains running on time.

On its surface, Smith’s proposal seems sound enough, but if we delve a little deeper, it runs into two substantial problems. The first involves the nature of the MTA and what it would mean for the various subagencies if the city were to exert more control. Because of the need to find a funding mechanism for both intracity transportation and commute rail in the late 1960s, the MTA includes the subway and bus system that operates solely within the five boroughs and also an extensive commuter rail network that brings riders to and from points north and east of the city to work. Allowing the city more control over the MTA as a whole would create regional conflict between New York City and those districts that rely on the Long Island Rail Road and Metro-North because the city would obviously look to shore up the subways and buses over commuter rail.

On the other hand, giving more of a preference to the five boroughs might not be that bad from a practical stand point. As it is now, more than 90 percent of all non-Bridge and Tunnel MTA rides originate and terminate within the five boroughs on a bus or subway, and Metro-North and LIRR ridership accounts for just three percent each of the remainder. The funding, as the MTA presents it, isn’t nearly as equally distributed with commuter rail earning more than their fare share of the dollars based on a per rider basis. Maybe the city should have more control to better reflect the division of ridership and the relative importance of each subagency.

The second problem is one of dollars. As New York State has no money, the city doesn’t either. It can’t just issue a blank check to the MTA and expect board seats and more power in return because the money to back that check isn’t there right now. The city could, as it tried to do two years ago, institute a congestion pricing scheme or bridge toll plan that would funnel dedicated revenue to the MTA, but without home rule authorization from Albany, that money — and that MTA funding plan — won’t materialize no matter who has the control over the transportation authority.

My arguments here are a rather simplified version of a paper I’m currently writing for a class, and the debate over control of the MTA seems to be evergreen in the annals of New York State and City politics. In all likelihood, the mayor should have more control over the authority, but wouldn’t that just open the door for Albany to further abrogate their MTA funding responsibilities? A possible solution may involve slicing and dicing the MTA to restore the New York City Transit Authority as a stand-alone entity, but even that isn’t a perfect solution as the state could easily take away any funding whatsoever for an agency that operates only within the borders of New York City. The Doomsday Clock, meanwhile, continues to tick.

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Alon Levy April 19, 2010 - 5:48 am

It may be feasible to turn New York City Transit into a city department, but it would have to be as apolitical as possible, in order to avoid the problems of mayoral corruption and incompetence. Competent city governments can manage subway systems; Tokyo does, and even turns a profit out of it, barely. Commuter rail could be managed by a separate company, owned partly by the city and partly by the state.

However, you really need to ask yourself if you trust the mayor as an institution in New York. I personally do not; strong mayor-council means the mayor is a dictator, and the dominance of money and a few special interests means the dictator can buy his election. Any department, however apolitical in principle, becomes either a crony post or a bully pulpit in practice. Bloomberg’s very brazen about this, but it’s always been like this, except maybe during the LaGuardia administration.

JP April 19, 2010 - 7:58 am

“The funding, as the MTA presents it, isn’t nearly as equally distributed with commuter rail earning more than their fare share of the dollars based on a per rider basis.”

But that doesn’t amount to real dollars. How much is the average LIRR or Metro-North fare?

Benjamin Kabak April 19, 2010 - 9:15 am

But that doesn’t amount to real dollars. How much is the average LIRR or Metro-North fare?

The average fare on LIRR or Metro-North doesn’t really matter because of miles traveled. Even though the average fare in dollars is higher on commuter rail than on NYC Transit’s buses and subways, the trips aren’t nearly comparable. For example, taking the extreme Penn Station-to-Montauk trip, the peak ticket costs $23, and the ride covers 120 miles.

Alon Levy April 19, 2010 - 7:45 pm

The LIRR and Metro-North are more subsidized than New York City Transit per dollar of revenue and per passenger. Per passenger-km, I’m not sure, but check the National Transit Database; my recollection is that they are still more subsidized, but peer commuter agencies such as NJT and SEPTA are not.

The important metrics for a money-losing transit agency are subsidy per passenger and recovery ratio. People who pay three times as much but receive five times the government subsidy are not being shafted; they’re being coddled.

Scott E April 19, 2010 - 8:32 am

I think the hardest part of answering this question is that we have our current administrations in mind as we try to answer it. Right now, we have a mayor who is financially brilliant, and a governor who’s in way over his head. I have no doubt that Mike Bloomberg could run the agency better than it’s run today, if he chose to do so. But when our elected officials change, we might feel differently.

But the first step, as mentioned in the original post, is dealing with the suburban entities. Suffolk County has, one one hand, spoken of turning its bus system over to the MTA (since they know how to run a bus system), and, on the other hand, considered seceding from the MTA, who underserves its own residents. Somehow we need to satisfy the suburbs.

Right now, the extent of city transit (NYCT)’s cooperation with the other agencies is limited: (1) they cross-honor fares in event of disruptions, (2) they share Metrocards, sort of (LI bus accepts them, and they can be put on the back of rail tickets). But PATH/Airtrain do this too. Connections between the two are not coordinated, neither in terms of fare-paying, scheduling, nor traffic flow. Behind-the-scenes, they use different trains, different engineering staff, different signaling systems, different unions. There’s not much reason to keep them together; I’d spin it off to be run by various suburban county representatives.

But, do we trust future city mayors to run NYCT by themselves? If it were made smaller and more manageable (i.e. spin off the bridges and tunnels to the NYCDOT), I’d give it a shot. Then the voters of New York City, and not the voters of Schenectady, can push for change.

Marc Shepherd April 19, 2010 - 8:37 am

The proposal only works if NYC has home-rule authorization to run the transit system as it sees fit. That means having the authority not only to spend money, but also to raise revenues with congestion pricing and/or bridge tolls.

Mind you, I don’t see the legislature actually ceding authority like that, which means the proposal will likely go nowhere.

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Boris April 19, 2010 - 9:58 am

Why not privatization on the highway model? I first heard this argument in the comments in this blog, and I’ve become a believer since. It puts highways and transit on the same footing and avoids the need for transit authorities.

We have been able to avoid the politically infeasible action of raising the “fare” (gas tax) for 17 years because operations and some capital (vehicles) has been outsourced to the private sector – individuals and profitable private bus companies.

The MTA can keep ownership and maintenance of the rails and signals in its current service area and be absorbed into DOT or a separate state agency. Operations/rolling stock can be outsourced to private companies (with some restrictive contracts, such as bundling profitable routes with nonprofitable to maintain service). These companies would pay the MTA user fees, probably equal to their profits. Bus companies would continue to pay user fees as today (gas taxes and tolls).

Marc Shepherd April 19, 2010 - 11:36 am

The premise that highways are currently privatized is utterly false, so the core of your argument drops out.

Since a private company would need to make a profit, the overwhelming likelihood is that fares would go up or service would go down. The idea that they’d “pay the MTA user fees, probably equal to their profits” is complete nonsense. If you were a private operator, why would you sign up for that?

People complain about MTA management salaries. Well, in private industry salaries are typically higher than they are in government. Jay Walder, for instance, makes much less as MTA Chairman than he would in a private sector job with comparable responsibility.

“The MTA can keep ownership and maintenance of the rails and signals.” So, the MTA would retain a management structure to undertake those functions, and the private operator would have its own management. That sounds very inefficient, and the two would need to be in sync at all times.

You refer to “bundling profitable routes with unprofitable ones.” Which MTA routes do you think are profitable? I’ll give you a hint: it’s hardly any of them.

Alon Levy April 19, 2010 - 8:11 pm

There are a couple of problems with this model:

1. The usual candidates for private transit operations are multinationals, which do terrible jobs. For example, Veolia let its train operators text on the job, leading to the Chatsworth accident in Los Angeles. The successful private transit companies are local transit agencies with roots in the city, not multinationals.

2. When a route has several competing private operators on it, the schedule and fare integration is usually terrible. To maintain consistent schedules and allow seamless transfers, the government would have to regulate the routes and schedules heavily.

3. The big elephants in the room do not go away with privatization. The managers and consultants would still get paid lavishly and know nothing of industry best practices. The unions would almost certainly be able to force the government to include union-friendly, overstaffing-friendly clauses in the contracts. The FRA regulations are a federal problem. None of those problems was present in the government-run agencies that were successfully privatized.

The problems that privatization can fix are different. They include government mandates to overbuild, often at the expense of building lower-maintenance equipment; outbound lines that cover a large area where transit will never work, instead of a focus on core services; and artificially depressed fares. The MTA doesn’t have any of those problems. Its problems are regulatory or managerial.

Rhywun April 19, 2010 - 8:53 pm

The MTA would never be wasting money on, for example, the 7 line extension were it privatized. Capital spending would be based more on profitability (which translates as revenue, i.e. need) than politics. As for fares, they *are* currently artificially depressed – otherwise the MTA would be making a profit instead of being $800M in the hole. The low fares are based on the assumption that transit is a form of “social safety net”, which leaves it subject to the whims of politics and the endless funding shortages that we see today.

Not that privatization doesn’t offer its own opportunities for corruption, especially for what amounts to a monopoly such as an urban railway system. I don’t have the “answer”, but we’re here throwing out ideas that will never come to pass anyway, so what the heck.

Alon Levy April 20, 2010 - 12:41 am

It’s not that the fares are depressed – it’s that costs are out of control. In that sense you could say fares are depressed, but in comparison to most peer cities’ transit fares, they’re quite high.

Yes, the 7 extension would probably not happen in a fully private system, or if it did, the company would probably make sure the development worked out. But many privately subway systems still have some government planning and funding for extensions – for example, Singapore. The routes-to-nowhere issue isn’t as big of a deal within a city as on the national level.

Rhywun April 20, 2010 - 11:54 pm

OK, I agree that costs are higher than they need to be, largely because of union demands and government tomfoolery, but as long as we’re living with that reality we need to make people pay the true cost if only to get their attention and see where their money is going. (The same applies to drivers, BTW.)

As for the 7, I would have no problem with its role as facilitator of a megaproject so long as the private entity running it paid the full market price for the plot of land at the end of the line — rather than be blessed with the sweetheart deals and tax giveaways that are the inevitable result of city politicking.

Bolwerk April 19, 2010 - 10:39 am

How the hell is the “highway model” privatized? If anything, it’s less private than the MTA is now. Sure, the highway system maybe gets about ~70% of its funding from gas taxes (not much different than Amtrak or MTA rail services), but a massive feeder network of private roads is paid for by a convoluted system of federal, state, and local subsidies.

As for privatizing operations, there’s certainly worldwide precedent. Germans are quite good at it. But it’s not a magic bullet, and English-speaking countries haven’t proven very adept at it. A private company can be just as wasteful as a public agency, and perhaps even less efficient even when well-operated because a public agency, after all, can make use of public financing (which means lower interest rates). And waste is the real problem; the MTA needs to become a less labor-intensive club, and it’s not going to do that while part of its unspoken mission is to be a patronage mill for relatively unskilled workers.

Boris April 19, 2010 - 12:18 pm

Maybe I should’ve said “public-private partnership” because the roads are public and the vehicles and operating labor are private. That’s what it is when you drive your own car on a public road. You are a private “business” since you have to absorb the costs of driving yourself somewhere.

The private operating companies can in practice be nonprofits as they wouldn’t be making money for shareholders, although they can have various profitable side businesses (for example, coffee shops in train stations). Nonprofits are popular and successful in a wide variety of fields without having a profit motive as their central reason for being, and they are often more efficient than government agencies because they don’t have implicit government bailout guarantees.

I’m not saying I have all the answers regarding pricing. The core idea is that one pays the government a fee to receive a service. Using a model similar to the highway funding model will make it easier to convince people to pay for transit, because highway funding is something that was once explained in capitalist terms (“user fee”, etc) and is something people understand.

Marc Shepherd April 19, 2010 - 12:34 pm

You’ve just hit on the fatal flaw. Traditional nonprofits don’t have a government guarantee, because they are allowed to fail. We can’t let the subway fail, and so if the private operator goes belly up—which is precisely what happened a long time ago, when the subways were privately operated—the government would have to take them over.

Boris April 19, 2010 - 12:54 pm

What about hospitals? They are nonprofits (all hospitals in NY are nonprofit by law), and yet they are rarely allowed to fail. And here we are dealing with relatively steady income streams from fares, advertising, etc, not feisty insurance companies.

Marc Shepherd April 19, 2010 - 1:24 pm

When you consider how the cost of health care has risen in relation to inflation, the hospital model doesn’t exactly inspire confidence that your proposal would work.

The entire problem with the subway is that its income stream is not steady, and it is not enough to cover the costs of running it. That, by the way, was precisely the problem that bankrupted the private operators originlly.

Rhywun April 19, 2010 - 8:59 pm

The private subway operators in NYC failed because of government restrictions on fare increases – they imposed an artificial limit of 5 cents way longer than could be sustained. Much like the private streetcar operators failed also due to government regulation – I forget the exact details but it had something to do with repair costs of streets they ran on.

I agree that we can’t let the subway fail – which means the government should refrain from imposing unrealistic regulations on the business.

Alon Levy April 20, 2010 - 12:35 am

The exact details, from what I’ve read, are that the Denver streetcar system was forced to pay 25% of the repair costs for streets on which it ran one-way and 50% for streets on which it ran two-way. This rule may have made sense when it was instituted, in the 1910s, but as car traffic increased, it forced the streetcars to subsidize cars.

I don’t remember what the source in question says about other streetcar systems.

Bolwerk April 19, 2010 - 12:41 pm

That’s almost like saying subways and buses are in fact public-private partnerships because users get on them at their own volition and pick their own seats (or where to stand, as is often the case).

Yes, there is an element of self-financing for use of the highway system in the forms of tolls and gas taxes. Yes, there is an element of private entities bearing the operating costs of owning a vehicle. There is also an element of operating cost not borne by drivers, like maintenance, enforcement, parking, and emergency vehicles.

The fact is, privatization v. public ownership has nothing to do with the problems with the MTA and any arrangement that doesn’t address the problems with the MTA (e.g., labor overhead and work rules) is simply a distraction, probably of the ideological sort.

Boris April 19, 2010 - 12:59 pm

Yes, union pay and work rules would have to change. But one way these changes can be sold to the public is through the streamlining process of separating capital and operating. It can be one of those rare cases where a politician’s abrogating of responsibility can be good for the public. But it would take someone on par with Robert Moses to push through any kind of far-reaching reform.

Bolwerk April 19, 2010 - 1:18 pm

Capital and operating budgets are separated. Privatization wouldn’t change that.

It’s not even pay that’s the problem. On top of inefficient work rules, it’s the number of workers needed to do a job that in any other country could be done with fewer. There’s no need, in the 21st century, for two employees on a train. This is more a federal problem, but there’s also no need for conductors to collect tickets.

A case can be made that Robert Moses is largely responsible for the mess we’re in today. He was the one who brought public authorities into vogue in NYS. Even after his reputation failed, the idea of the public authority as apolitical lived on.

SEAN April 19, 2010 - 12:28 pm

Should the City have greater MTA control? Are you kidding? Absolutely!

However the suburban counties should be part of the process.

I’m tired of my fait ending up in the hands of upstate polititions who don’t give a crap about transit. Although you can say the same about local polititions as well, but most of the political power comes from outside the metro area.

Hell I have more faith in Anna & Lisa on the TV show V, then most of these politicos.

Bolwerk April 19, 2010 - 12:45 pm

Most of it is obstructionism, often by higher-level politicians representing the city.

I really don’t see why suburban politicians should be part of the process when it comes to NYCTA activities. I think there should be a common fare medium, and perhaps the MTA could be responsible for that along with the commuter RRs that affect both the city and the state. The city really should manage its transit system, since it’s the city’s priority — and why should it be anyone else’s?

Al D April 19, 2010 - 2:17 pm

It always amazed how the MTA is structured and controlled. So NYCT carries something like 90% of the passengers, but MTA is a state public benefit authority? And this bogusness of Rockland County not getting their fair share of service in return for the payroll tax? Wise up, with no transit, there is no city, and therefore there is no Rockland. It may as well be in the middle of Iowa. Anyway, yes I agree that the city needs to have much more control. Even the city’s elected officials in Albany don’t care. If they can ceded control of Governor’s Island, why not the MTA?

martindelaware April 19, 2010 - 3:55 pm

“…more than 90 percent of all non-Bridge and Tunnel MTA rides originate and terminate within the five boroughs….”

If the percentage is that high, why not make LIRR and MNR free outside of city limits and just charge a flat rate to enter or leave at Penn Station, Flatbush, Jamaica, Grand Central, etc.? At the risk of subsidizing long commutes and penalizing short ones, it would slash fare collection costs. After all, the Bridge and Tunnel tolls don’t account for a vehicle’s origin or destination; you’re just paying to cross into city limits.

Marc Shepherd April 19, 2010 - 5:26 pm

Talk about a flawed analogy!! When you use bridges & tunnels, the MTA has no interaction with you on the other parts of your journey. When you take an LIRR or MNR train, you are riding on MTA tracks the whole way, on a train staffed with MTA employees, consuming fuel the MTA has to pay for, etc.

Alon Levy April 19, 2010 - 7:39 pm

First, the LIRR and Metro-North are a larger part of MTA revenue – about 30%, if I remember correctly. (Google “National Transit Database” and look for data for the top 50 transit agencies in the US for the actual number.) They’re an even bigger part of government subsidy to the MTA, as they run lower farebox recovery ratios than New York City Transit.

Second, most of the commuter rail fare collection cost would be cut if the MTA switched to a Swiss- or German- or Australian-style proof of payment system: it’s your responsibility to have a valid ticket, and the fare is enforced with random inspections. Going to zero fare would cut very little cost relative to POP, while foregoing major revenue.

Don’t try to analogize commuter rail to highways. There are multiple real-world examples of countries with high-ridership, high-farebox recovery commuter rail.

(Note: the largest, most profitable systems are in Japan, and use faregates instead of POP. This is because the cost of POP is proportional to traffic whereas the cost of station agents is proportional to the number of stations. So at high traffic density, higher than on New York-area commuter rail, POP is more expensive than faregates.)

Rhywun April 19, 2010 - 9:20 pm

I think regional agencies make sense in cities that are (a) smaller and (b) have more city/suburb dependency than NYC. For example, I can’t imagine a separate city agency in my hometown of Rochester largely because the city is so small and depressed that all the shopping and most of the employment is now in the suburbs. NYC, in contrast, still thrives within the city limits and in fact the subway and bus systems are already configured to remain entirely within the city – there is no reason these systems shouldn’t be city-controlled.

BrooklynBus April 21, 2010 - 9:58 pm

In Planning school nearly 40 years ago I was taught that it is more desirable for a public agency to operate a transit system over the private sector because the private sector only cares about the bottom line whereas a public authority or agency sees the social responsibility to provide a service even if it is not profitable.

Guess what, the bottom line is all the MTA cares about. This latest round of service cuts leaving a few neighborhoods entirely isolated without any mass transit service at all shows they do not have a social responsibility. They have extended or modernized routes only under political pressure, and instead of figuring out ways to have the system serve its clientele better by updating outdated bus routes, during times of surplus, to encourage ridership, they were preparing service cuts to be implemented when the surplus turned to a deficit that couldn’t be managed. Their cuts are often short-sighted such as greatly increasing non-revenue bus mileage and reducing field supervision, causing great inconvenience to passengers.

But the NYCTA was no more responsive when it operated independently and privately operated routes couldn’t yield a profit either with the current overhead, and bonds to be paid off. A restructing or break up of the MTA is in order if that will improve efficiency and make it more responsive. For one thing, bus service needs to be concentrated in a single agency. Having a separate MTA Bus Company for former privately operated routes and the current City subsidy arrangement makes no sense. That resulted in NYCT making $7 million in cuts in Queens, but MTA Bus which operates 40% of the routes in that borough to make only $120,000 in cuts because their routes receive City subsidies and NYCT routes do not. It also prevents integration of both systems.

It is really a shame because although MTA management only is concerned about the money, the bus drivers, dispatchers and other operating employees really do care about serving the passengers and improving the system. While money is important and more of it needs to be distributed to the subway and the buses instead of the rails, that alone will not solve the problems of the MTA. More controls need to be placed on the MTA so that it cannot continue to do whatever it damn well pleases, like increasing off-peak crowding standards, without legislative approval. The Authority could also benefit from more common sense and listening to its employees, giving them more opportunity for promotions into non-operating positions.

I’m not sure if City control would help any, but clearly something has to be done soon, because the MTA is showing no signs of changing on its own accord and any more service cuts will only further destroy the system and drive away riders which will not be that easy to win back. This latest round was not done properly. The methodology was faulty and the ones that were chosen were not the ones that caused the minimum inconvenience. They will lead to further cuts in the future because the MTA’s goal is to operate less bus service which they believe will result in a smaller deficit.


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