Home MTA Economics A Comptroller’s report predicts the wrong kind of MTA doom

A Comptroller’s report predicts the wrong kind of MTA doom

by Benjamin Kabak

As New Yorkers awoke to their free daily newspapers on Tuesday morning, a poorly-done Photoshop along with an article predicting doom and gloom for the MTA screamed out from the cover of amNew York. According to a report by New York State Comptroller Thomas DiNapoli, the MTA’s budget hole will expand to $2.1 billion by 2014, and everybody should panic! Or at least that’s what amNY’s take on the story was.

Now, this evening, I checked out DiNapoli’s report, and he paints a bleak picture of the MTA’s financial future. The authority, he says, “faces a budget gap of more than $1 billion next year, which could more than double to $2.1 billion by 2014 unless the MTA begins to drive more efficiencies in the way it does business.” While fares are going up and services eliminated, the MTA must reduce costs and improve worker inefficiency to stave off financial disaster.

“We’re seeing the effect of the recession and years of undisciplined bloat and inefficiency,” DiNapoli said. “The MTA’s current administration is working to close its budget gap, but commuters and taxpayers are demanding results. The MTA needs to change the way it does business. Repeated fare hikes and service cuts can’t change a culture of complacency. My office has identified more than $296 million in waste and savings opportunities over the last year alone, and we recently began a forensic audit of the MTA’s $600 million overtime budget. These are tax dollars. Inefficiency and complacency just don’t cut it.”

There’s only one glaringly obvious problem with DiNapoli and the report: The MTA has already acknowledged these funding woes and is already working to close the budget gaps both in 2010 and in the future. While it remains to be see if a bureaucracy famous for its bureaucratic bloat can truly become a lean — or at least a leaner — organization, DiNapoli’s reports are simply rehashing the MTA’s own financial statements and urging the authority to enact measures it already said it would enact.

The most obvious example of DiNapoli’s doomsaying tendencies comes on pages 2 and 3 of his report. Here, he highlights the deficit but also notes that the MTA is committed to closing the deficit. So despite the fact that his press release leads with the $2.1 billion figure, the MTA doesn’t anticipate a deficit of that size in reality. DiNapoli writes:

The MTA has moved aggressively to reduce the size of the projected budget gaps and has outlined a comprehensive gap-closing program for the next four years (see Figure 1). It is currently implementing actions (discussed below) that are expected to generate $367 million in 2010 and about $525 million annually thereafter. These actions, even if fully successful, would still leave budget gaps of $200 million in 2010, $500 million in 2011, $803 million in 2012, $1 billion in 2013, and $1.6 billion in 2014.

The MTA intends to close the remaining budget gap for 2010 mostly with actions that will generate only one-time savings. For subsequent years, the MTA has proposed raising fares and tolls by 7.5 percent in 2011 and in 2013, and has outlined additional management initiatives. In total, the MTA expects to generate more than $700 million in recurring savings through management actions by 2014. If all of these actions are successfully implemented, the MTA forecasts small positive cash balances in 2010, 2011, and 2013, and manageable gaps in 2012 and 2014.

Considering the MTA’s initial success in reducing overtime costs, there’s little reason to doubt that these actions will be at least partially implemented. Is it skeptical of me to say then that DiNapoli’s $2.1-billion figure is simply a creation of a man running for reelection and trying to gain headlines?

Despite my dismissal of this report, there are real financial concerns behind the MTA’s budget. As John Mancini reported tonight at NY1, the MTA now anticipates that it will have to raise its pension contributions by an unplanned $150 million next year, and its real estate tax revenues are “no better than last year.” The authority had hoped to see a boost in tax revenue as the economy improved, but that — a true deficit-reducing event — will have to wait for 2011 or beyond.

There is no doubt that, as DiNapoli charged, the MTA is “inefficient and bloated.” The authority has suffered this problem since the day of its founding in 1968, and after the authority suffered through this problem for 42 years, Jay Walder seems willing to confront it. Yet, threats loom large. A constitutional challenge to the payroll tax or political change in Albany could jeopardize $1.5 billion in MTA revenues, and until the authority is on sounder financial footing — whatever that might be — the threat of financial doom looms large while fares remain artificially low. If the state comptroller paid more attention to that reality, perhaps the right people would listen.

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JK September 29, 2010 - 7:09 am

How do you know that “the MTA in Sept 2010 is “inefficient and bloated?” Compared to what? The city bureaucracy? the police? The state bureaucracy? Citibank? The Port Authority? Any hospital? Name another government agency serving NYC which has its finances and management as closely scrutinized as the MTA. I don’t know about comparative management or “bloat” metrics, but odds are good that the MTA is no worse, and, due to the endless scrutiny, probably better than many agencies. If the measurement of “bloat” is service provided/dollar spent, I’ll happily bet on the MTA in a “bloat-off” versus the NYPD or FDNY, or the state comptroller.

Al D September 29, 2010 - 8:55 am

Good points, all. That’s why I suggested in an earlier post that Mr. DiNapoli exercise the same rigor to ALL NYS agencies, authorities, etc. Otherwise, he just wants to be the MTA IG. Or…did he just copy and paste existing MTA data, repackage them and then sign his name??

BrooklynBus September 29, 2010 - 10:30 am

Anyone who takes a bus in this City knows how inefficiently it operates. Some is unavoidable, but much of it is, the part that is due to poor scheduling (running times that cannot possibly be met), and wasteful practices like running large numbers of buses four and five miles not in service when they can pick up passengers who are waiting 30 minutes for a bus. Just yesterday three buses in a row would not stop for passengers because they were all overcrowded. This was followed by a bus scheduled to operate “Not in Service.”

That is just poor operating practice. Running time that cannot be met may save a bus on paper, and reducing overtime, may also look good for the budget, but what matters is how these practices affect the services that is provided. That the MTA is not concerned about.

Bolwerk September 29, 2010 - 3:20 pm

Of course, the MTA gets dumped on unfairly. It does some things well. I’m not especially fond of the newer equipment, but it appears to work well, and in general trains confer a high degree of mobility in NYC that is not achieved even in many other postindustrial cities, let alone any in the USA. Also, most of its problems are not solvable in-house, and not many politicians are willing to acknowledge that.

Still, just compare it to comparable world transit agencies, with its 2-man train crews, debt service, and high managerial/administrative overhead. Eliminating waste and bloat might not be the solution to all the MTA’s woes, but it also isn’t something that’s excusable to ignore.

sharon September 30, 2010 - 10:15 pm

Without reducing waste and bloat their is no future. the hole the mta has dug for it’s self with the help of Albany is pretty deep. It is out and out criminal to award 11% raises for workers when the company they work for is in over it’s head in debt.

All is not lost and we can dig out of this without taxing east river bridges. The solution is simple and done in corporate america many times
1) When you have any surplus from unexpected real estate taxes etc it should be by law assigned to lower the debt
2) no raises for workers without meaningful work rule changes. Moving to OPTO is a good first step in exchange for a $3 an hour raise and no layoff clause. Even if the mta won this provision it could not run OPTO full length train system wide on most line for 2 in the most accelerated schedule. Short train overnight using OPTO could be rolled on most major lines within 6 months as many of the lines already have camera’s for the most basic OPTO service. Proper scheduling allow trains to be split in station and both train heading out. On the D,Q,N,F at coney island a train could pull in, half leaves as a Q and half leaves as a N. the track hookups are thier. As for putting the train back together, there are dozens of trains sitting in CI yard unused most days. I drive by every day during the morning and evening rush
3) All mta owned bus operations needed to be merged 100% and unions don’t decide which buses run on which line. Full interlining of buses no matter the depot. Express bus drivers on swings could then be assigned to other tasks as needed. SI express buses stay in the city and not drive 2 hours in a circle with no passengers as they do now.
4) Raise the express bus fare to $10 and provide subway shuttle bus service to places like shore road in bay ridge. Install more elevators at brighton line station .
5) 100% video tolling at mta crossings eliminating thousands of workers and reclaiming land to plant some pollution eating treas

The mta mobility tax is a job killer. Temporary tax for 5 years to pay down the debt and nothing else. Bring debt cost in line and the mta shortfall is a small cyclical issue. During good times the mta will run surpluses with all the taxes and tolls it gets. Use it to pay down debt for the bad time not BIG raises and an excuse at mta bridges to have 1000 times more workers than the brooklyn bridge has.

JebO September 30, 2010 - 4:55 pm

Bravo JK! The MTA takes far less subsidy per passenger than just about any other U.S. transit agency. By that measure it’s actually the least “inefficient and bloated” of any of them.

sharon September 30, 2010 - 10:23 pm

“Bravo JK! The MTA takes far less subsidy per passenger than just about any other U.S. transit agency. By that measure it’s actually the least “inefficient and bloated” of any of them.”

No it’s not. this just states that NYC is more dense than other cities. Due this density and high ridership the mta should be able to operate with a far smaller subsidy and lower bridge and fares. It is just the criminal mis management that leads to wasted money. Automated bus supervision and proper assignment of buses to depots alone would save tens of millions alone . I hate to break it to many of you, The B3 in brooklyn runs bunched even when there is no traffic. The Bm4 travels 30 min by street to the first stop on it’s line when it could travel 5-10 min from the closest depot that runs the same type of bus. Taken into account the number of runs and pull in and pullouts I calculated $600,000 per year in savings on this one bus line alone for moving it to a ULmer park depot from spring creak depot. It is amazing the amount of savings out there for the taking. really mind blowing

Larry Littlefield September 29, 2010 - 9:48 am

Are the employees of the State Comptroller who announced that the MTA had “hidden billions” years ago, and didn’t need any fare increases “yet” much to the delight of the Straphangers, still around? What a wonderful political solution he could announce! It was justify the actions he did and did not take as a state legislator.

(As the time, it was clear to me was a not much hidden sell out of the future, that the “surpluses” were really “going down the tube financially more slowly than expected).


sharon September 30, 2010 - 10:31 pm

Let’s see how Dinapoli’s tune changes after he is reelected.

The AG’s office workers are actually underpaid in many skilled titled especially if you compare it to what the mta is paying train cleaners. And they are competing for talent with the private sector. The mta is competing with themselves. they would be full staffed at the cleaner position for $18 an hour and even $15 an hour.

The AG’s office looses there best young talent to other agencies and the private sector all the time. I worked over there at one point. Yes it is not run perfect, but not as bad as the mta. Same problems poor oversight allows a small bunch of bad workers stay on the job for years. I was on an operation to round up perps when one agent pulled out his gun and fired in the air. Rule one never fire your gun especially if the other person does not have one. The agent got a slap on the wrist.

ourmanflint September 29, 2010 - 9:14 pm

What makes me laugh is: when the MTA layed off those token clerks O.T. for the remaining ones jumped 300% and the MTA says it is concerned about reigning in O.T. costs. You must admit they have a heck of a sense of humor.

Bolwerk September 29, 2010 - 11:23 pm

I have yet to see a cite for that.

Anyway, they’ve actually taken booths out of at least one station I’ve been in (Myrtle-Wyckoff).

sharon September 30, 2010 - 10:33 pm

Don’t mislead people. the 300% jump was because the union paid off a judge that made them go through another round of public hearings. No other reason. the remaining agents had to pick up the slack


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