Home MTA Economics The slippery slope of an unfunded capital budget

The slippery slope of an unfunded capital budget

by Benjamin Kabak

In the 1980s, subway cars were filthy, and stations were decrepit and unsafe. (Photo via NYCSubway.org)

The MTA’s current fiscal situation pales in comparison with the budget wranglings that have enveloped Albany and Washington, D.C., over the past few weeks, but for New York City’s economy and productivity, a relatively stable MTA is vital. Over the past 25 years, the authority has worked to upgrade its massive infrastructure, and while the system isn’t yet at a State of Good Repair, it has made great strides since its nadir thanks to the five-year capital budgets.

Today, though, there is a problem: The capital fund is nearly empty. The MTA has a $10 billion gap in its current five year plan — and that’s a gap that I’ve heard may be a few billion dollars higher — and after this five year plan, it can no longer bond out construction projects. It has reached the limits of debt it can take on and pay off in the future, but it must continue to invest in its system. That is, after all, the problem with running a modern subway system through a 110-year-old physical plant.

Last Friday, in this space, I examined how the MTA could close the gap in its capital budget through fare increases, and my conclusion wasn’t an optimistic one. The MTA would have to raise fares significantly to generate enough revenue to close that $10 billion gap, and the riding public has little appetite for fare hikes these days. So what happens if the fares don’t go up and the capital budget remains unfunded? That’s a topic Noah Kazis tackled on Streetsblog yesterday.

Evoking the “disrepair” of the 1970s, Kazis warns of a long, steep fall for the MTA. If you look closely, it’s sort of starting to happen now as the MTA simply cannot keep up with the demands of its aging infrastructure. He writes:

At the other end of the spectrum from fare-backed borrowing, the MTA could decide that it cannot take on any additional debt. In that scenario, the MTA would simply have to cancel or postpone every unfunded maintenance and expansion project — most of the next three years of the capital program. You can see those projects at the MTA’s capital dashboard, here. The result will be breakdowns, delays, and a slide back toward the decrepit and dangerous subway system of the late 1970s.

“You can expect to see the condition of the system decline pretty rapidly if you’re not doing this work,” said Felice Farber, the director of external affairs for the General Contractors Association of New York. “It’s not too hard to get back to the poor quality service of the past,” she said.

“You’ll have older buses, so they’ll be breaking down more often,” explained Pete Foley of TWU Local 100. “Subways will have to go slower,” as they pass over worn out tracks, he continued. “Eventually you’re going to have cracks. You’ll have derailments if you have a crack in the rail.”

Delays will be more common during rush hour as well, due to the lack of regular preventive maintenance. “You’ll be fixing things when they break,” said Foley. “They’ll wait until it’s an emergency.”

That is a grim picture made worse by the reality of the way the MTA spends capital dollars. For every dollar in capital spending, 23 cents go to expansion plans, 27 cents go “basic repairs,” 35 cents go toward rolling stock replacement and the remaining 13 cents are used to upgrade communications and technology infrastructure. The MTA can ill afford to let any of these projects stop, let alone all of them.

“In reality,” Kazis writes, “the MTA can choose to mix and match between fare-backed debt and deferred maintenance, putting off the features that might be nice to have and charging riders for the ones they need to have. The MTA could also potentially swap in service cuts or layoffs for fare hikes.”

That’s a bad reality. We’ve seen the MTA cut the Second Ave. Subway from three tracks to two; we won’t enjoy a station at 10th Ave. and 41st St. along the 7 line extension. What else will go before some action is taken to rescue the system from the slippery slope of the 1970s? Let’s hope we can avoid making the same mistakes of the past; that’s one history I’d rather not see repeated.

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45 comments

R. Graham April 15, 2011 - 1:21 am

And that my friends is exactly when public transportation will finally become a campaign issue. I can’t wait!

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David April 15, 2011 - 1:37 am

No more free street parking. Charge $20 for a monthly sticker that can be sold at kiosks and convenience stores. Car owners can buy fewer lotto tickets or frappuccinos.
This will keep our critical city transportation system going.

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Marc Shepherd April 15, 2011 - 10:46 am

Politics is the art of the possible. Legislation that “punishes” drivers has consistenly been impossible to pass.

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David April 15, 2011 - 12:40 pm

Yes, a street-parking tax wouldn’t be popular with car owners, but most New Yorkers don’t own cars and need the subway and buses to get around. Even car owners might realize how much our local economy is completely dependent on a functioning transit system.
This jobless economy doesn’t look like it’s going to improve anytime soon so there will be years of budget cuts and transit will start to resemble the 70s as Benjamin’s article describes. Things will just get worse until people will be willing to accept fixing it by paying more. But Americans are slow to realize and slower to accept financial realities.
We are gutting education, infrastructure, and medical care so that the richest Americans can keep more of their money and Americans seem to be okay with that.
These are truly depressing times.

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pete April 16, 2011 - 5:04 pm

Instead of “charging” for a residential parking permit, make it free with a NYC utility bill/proof of residency. Say its to protect public streets from “subway parkers” from evil Long Island and Westchester. Every NYC car owner (aka voter) will subscribe to that idea. Then 5 or 10 years later when the perennial budget problem comes up, add fees to the parking permit, or yearly “revalidation” fees to make sure your still an NYC resident. Remember that, A. the stickers must be transferable/portable when your relatives from the burbs come to visit (cant be bound to a plate), B. some people will rent their parking permit to a subway parker from Nassau.

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Alon Levy April 15, 2011 - 1:49 am

Speaking of capital plans, I read in Railway Gazette a few days ago that Helsinki is signing contracts for a fully underground, fully automated extension of its subway 14 km into the suburbs. The total cost: about $1 billion. Said subway is also operationally profitable.

I get the feeling that Scandinavians don’t just do extensions more cheaply than New York – they also can keep their systems in good working order better.

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Bolwerk April 15, 2011 - 11:32 am

Something is clearly beyond fukc’d with New York construction costs. $7B in Denmark gets you an 11-mile underwater tunnel with at least two HSR tracks and probably four lanes of highway. Compare to the $9B-$13B 2-track, 2-mile ARC would have cost – or even the $3B-$5B optimistic tunnel only fantasy.

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Christopher April 15, 2011 - 1:22 pm

I wonder how much cost savings comes from having a social safety net where health insurance and retirement pensions are born by the Federal state and not piecemealed out to private businesses and unions?

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Bolwerk April 15, 2011 - 2:19 pm

A significant amount for various reasons. Risk is spread out better – it’s not only the people most likely to need insurance who will buy it, so that keeps per-person costs down. For private businesses, healthcare is a pretty expensive human resources nightmare. Sadly the link expired, but some years ago there was an article on the CBC mentioning that Ontario was a better place for a Japanese automaker to put a factory than the American south. Wages were similar, the workers were more likely to be literate, and a few bucks per head was saved on healthcare costs.

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Alon Levy April 15, 2011 - 4:10 pm

Probably none, since businesses have to pay lush pensions (P.S. Finnish pensions are borne by private businesses, not the state), and taxes are substantially higher. Health care in Scandinavia is more efficient than in the US to the point that government spending on it is lower, but overall government spending is higher because of social security and welfare programs.

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Donald April 15, 2011 - 3:39 pm

Construction costs ALWAYS go over budget substantially. Let’s see how close to that $1 billion mark Helsinki is when the project is completed.

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Alon Levy April 15, 2011 - 4:03 pm

It’s not true that construction costs always go over budget. Well-run projects stay within budget. The Gotthard Base Tunnel – 35 miles of double-track freight-and-HSR tunnel through the Alps for $10 billion – has held to a budget approved in 1994. The projects in France and Italy generally stay within budget, as do those in Spain, with the major exception of Barcelona’s L9.

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Moris J. April 15, 2011 - 8:23 am

Maybe it’s the New York construction ‘mafia’ that drives prices up.

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Marc Shepherd April 15, 2011 - 8:42 am

We’ve seen the MTA cut the Second Ave. Subway from three tracks to two….

That’s a bit misleading. The SAS was always (at least for the last 30+ years) a two-track subway. What they eliminated was the third track at one station, which would have provided a bit of flexibility, but wouldn’t have been used most of the time. There aren’t many places in the subway system with a third track at an isolated station on a two-track line.

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R. Graham April 15, 2011 - 9:29 am

“What they eliminated was the third track at one station, which would have provided a bit of flexibility, but wouldn’t have been used most of the time.”

Now this is also a little misleading. That one track would have provided major flexibility and not just a bit. In a time where service has been cut back in many areas that third track would have served as a part time terminus for the Q. As well as a convenient track for scheduling adjustments to service to keep the Q and T from bottlenecking. It would have been used every time by the Q.

Also misleading is the idea that the SAS has been nothing but a two-track subway for 30+ years. The plan from the 70s called for four tracks at 5 out of 15 Manhattan stations 3 tracks in 2 of the stations. Whitehall Street & Pine Street would have two tracks on each level of a two level station complex. Grand Street would’ve had a cross platform transfer to the B & D trains. 14th & 125th Streets would’ve had a middle track with 125th’s tracks one and two spurs towards the Bronx. 48th, 57th and 72nd Streets would’ve had 4 tracks. Just south of 72nd would’ve been multiple switches. One between the two middle tracks as well as switches leading from both the side tracks and middle tracks towards the 63rd Street turn and a final leading from the middle tracks to the side tracks. More than likely for using 72nd Street as a possible terminal for Broadway or 6th Avenue service. 57th Street had similar switches just to the north of the station. The first set leading from the side track to the beginning of a middle track and the other leading from Queens Blvd with switches to the side and middle tracks with the two middle tracks extending straight towards 48th Street station and the last interlocking between the two middle tracks just north of that station. Potentially for Queens Blvd service to terminate in East Midtown.

The old 70s plan had a multitude of possibilities.

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Marc Shepherd April 15, 2011 - 10:45 am

They actually never said what the service pattern would be had the 3rd track been built at 72nd Street. Similar merge points in the system don’t have a third track, which is a pretty good indication that it was unnecessary.

I said 30+ years, as that gets you to roughly 1980, and by then I don’t think there were plans to build four tracks at 5 out of 15 stations.

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R. Graham April 15, 2011 - 12:04 pm

You’re right, similar merger points in the system don’t have a third track but most of those merger points don’t have the complicated terminus issues the SAS will have with the except of the 2 & 5 in Flatbush.

Scheduliing is vital and the Q will not be perfert on Broadway always and there will be times that a Q can be held up at 63rd to allow for the final transfer to the F before it heads up Second Avenue. If 96th or the future 125th was going to be a three track terminal then we could say who cares, but it won’t be. It will be two tracks which will be ideal for the T to pull in on one track and a departing T to leave on the other. A third track at 72nd would have allowed the flexibility of saying the line is too congested at the moment. Let’s stop the Q here and have everyone transfer for T service.

If the 2 & 5 had such a luxury, half of service on both lines in Brooklyn would improve. I have a T/O friend who described to me the madness at Flatbush last week because of a stalled train a couple of stations away. Nothing could get into or out of Flatbush because there are only two tracks and there was too much congestion heading towards the station. Once service was moving no assigned cars were heading up the proper lines which seems to be the norm down there.

Now when both the Q and T are ruling 2nd Avenue you won’t have the option of terminating the Q short for late night service which saves money. You either send it up Second or don’t send it at all from 57th. Spending a little more money now goes a long way at saving in future ongoing costs later.

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Bolwerk April 15, 2011 - 11:13 am

I still find that so tragic too. It’s not improbable that one day (it will be desirable that?) the SAS will have closer to 4/5/6 Train levels of demand and L Train levels of capacity. I haven’t seen anyone in the press criticize the lack of foresight in the SAS’s construction (only its outrageous costs).

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Marc Shepherd April 15, 2011 - 12:04 pm

At full build-out, the SAS will have quite a bit more capacity than the L, due to longer trains, wider spacing between stations, shorter dwell times, and modern signalling.

As presently designed, the SAS has stations more widely spaced than on the 4/5/6. For a 4-track line to make any sense, there would need to be many more stations, so that some could be local and others express. It would be about twice as expensive to build.

Given the difficulty of getting even the current design funded, such an extravagant project would be fantasy-land. At this point, there is no prospect of even getting the full-length 2-track design built within our lifetimes.

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R. Graham April 15, 2011 - 12:09 pm

Absolutely correct. CBTC signaling technology should handle Second Avenue quite nicely once the full line is built in 2082. But indeed there is no need for express service at all.

Fantasy wise though a third track at a 42nd Street station from Queens Blvd would have been nice. You could run a V like service to terminate right there on the spot similar to what ESA is going to provide at Grand Central it would be like giving ESA at a discount to Queens residents.

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Bolwerk April 15, 2011 - 2:34 pm

Well, no kidding. It should be a cut and cover project, not a boring expedition. If the SAS never leaves Manhattan, as is likely really, a two track arrangement is fine. Hell, even if it does leave Manhattan, it should be okay unless it’s to become a real trunk line.

But, I don’t buy that you need more stations for an express. The current arrangement hits the sweet spot for a balance between local service (with stations 10 or so blacks apart meaning walks of 5 blocks or so tops) and a speedy trip across Manhattan. An express should have a different focus on interborough throughput. A perfectly sensible express arrangement could be some selection of stations at 125th, 86th, 59th, 42nd (the most critical), 14th, and the financial district – provided, of course, it’s intelligently fed by lines from the outer boroughs.

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Marc Shepherd April 15, 2011 - 2:57 pm

No one today is going to approve a cut-and-cover project of that distance.

Bolwerk April 15, 2011 - 3:14 pm

You may be right, but that makes absolutely no sense.

Alon Levy April 15, 2011 - 4:16 pm

The L’s capacity is limited by turnaround times at Eighth Avenue. Since SAS will have a modern northern terminal at every phase and split southern terminals, its capacity will be limited by stopping and dwell times, corresponding to the usual 24-30 tph seen in the rest of the city and the world. In a hypothetical future in which there’s a population explosion in East Harlem and the South Bronx creating more peak-hour ridership, there’s also time for signaling and automation technologies to have evolved to allow 40-45 tph at reasonable-even-in-New-York cost.

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Jean-Francois P. April 15, 2011 - 12:36 pm

Why not to stop this all day subway service ? A subway service starting at 5:30 AM and ending at 1:00 AM will be a good idea to find some money and it’s a better and faster way to do the maintenance works

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Benjamin Kabak April 15, 2011 - 12:39 pm

Because New York’s subway system wasn’t originally designed to shut down over night, the cost of doing so now would far outweigh the benefits. It’s not a money-making proposition.

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Marc Shepherd April 15, 2011 - 2:56 pm

Besides that, New York is truly a city that never sleeps. There are people at overnight jobs that need transportation at those hours. Many restaurants and clubs are still open at 1:00am.

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Alon Levy April 15, 2011 - 4:21 pm

As opposed to sleepy Tokyo, where all establishments and bars shut down at midnight?

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Bolwerk April 15, 2011 - 5:30 pm

There’s a possibility Tokyo has significantly less late-night employment outside the entertainment sector. Not that I care enough to Google that almost useless piece of information. :-p

Alon Levy April 15, 2011 - 6:14 pm

Um, no. The nightlife in Shinjuku, Shibuya, etc., is bustling. There’s a normal situation of people who missed the last train and will hang out at the bar and get on the first train of the morning, around 5 am.

R. Graham April 15, 2011 - 7:13 pm

This reminds of of the Grand Central 1:30 dash! Miss the last train. Well there’s one option left to you. Go back outside. A feeding frenzy of yellow has just lined at the curb at your convenience!

Bolwerk April 15, 2011 - 7:52 pm

I was counting that as in the entertainment sector. Are other off-hour jobs in areas like retail and offices as big in Tokyo as they are in New York? I would guess there is some late night trading, of course, in EU and NY financial markets.

New York traditionally had a large number of second and third shift manufacturing workers, which might be why the Subway was ever planned to be 24/7 to begin with. That’s probably fairly limited these days, but overall the late night commuter population is probably non-trivial even if you discount night life employment and revelers.

Alon Levy April 16, 2011 - 3:10 am

New York has 24/7 service because and only because the main lines are four-tracked, making it possible to maintain late-night service with the operating and maintenance practices of the 1920s.

Bolwerk April 16, 2011 - 2:01 pm

I realize that. But it was deliberately built that way because 24/7 service was desirable well before the 1920s. I realize that desirability has diminished, but it’s not gone entirely – and in most cities, it was never there to begin with.

pete April 16, 2011 - 5:18 pm

The answer is to replace it with the night bus that duplicates a subway line. Happens every couple weekends on ah (not aye) line anyways because of construction.

Bolwerk April 16, 2011 - 7:38 pm

@pete: I seriously doubt bustitution makes sense at night, unless it’s desperately necessary. When it does happen, the result is miserably crowded buses and much slower service. It’s not a good idea even on the M Train, much less the busier L Train or a Manhattan trunk line.

Alon Levy April 16, 2011 - 8:30 pm

Busy lines usually close well past midnight. The Yamanote Line is open about 21 hours a day.

Woody April 19, 2011 - 12:15 pm

The overnight service is well past my bedtime nowadays, but as I remember it, the late trains carried mostly working class types. (Nevermind the more desperate workless homeless types).

They looked like the kind of crews that go into retail and office buildings after regular working hours to empty the trash baskets, vacuum the carpets, mop and polish the tile and terrazzo floors, clean the toilets. Stay up late enough and you’ll see the people who have to be at work very early. They brew the coffee served at the coffee shops, staff the guard desks in the lobbies, work the early shift in hospitals, hose off the sidewalks, take the place of people whose shifts end at 4 or 6 a.m.

My strong hunch is that the average income of late night passengers is half or less than the daily average. These are people who really need the subways.

I’m also not pleased to think of dumping the office tower housekeepers out on 8th Ave @ 34th or 42nd or even 50th St at 4 a.m. or so to wait for a bus instead of the A train to get home to Washington Heights.

I’m really not convinced that any alleged savings would be worth it.

Bolwerk April 19, 2011 - 2:08 pm

The alleged savings probably wouldn’t even materialize. Buses are not inherently cheaper than even low-trafficked rail, despite the long-running planning fantasy. I think the point that everyone is dancing around here is, if shutting down at night is a good idea, it’s a good idea because some maintenance work can get done, not because buses magically become cheaper to run at night.

Bolwerk April 15, 2011 - 2:38 pm

The four-and-a-half hours between 1:00am and 5:30am is probably about the time it takes to marshal that many trains into yards and express track parking spots and back out again. They could probably do partial shutdowns for maintenance and whatnot, but I doubt a systemwide shutdown makes much sense.

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William M April 15, 2011 - 6:14 pm

Well it is possible like what you said to run a dry bones system in which you have less trains running, and at places where the ridership is low enough you can shut the line at night. Though this isn’t going to help. As the article mentioned the NYC Subway is 110 years old. Even an old person at that age would require a lot of work. Besides we don’t have a lot of the money to do faster repairs, and that is the reason we keep delaying work. Hopefully the subway would never go back to the times of the 1970’s, and 1980’s with the Manhattan Bridge, and the Williamsburg Bridge literally falling apart, with crumbing elevated structures, graffiti, and chipping paint, vandalized stations, trains, and more vandalized walls.

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R. Graham April 15, 2011 - 7:16 pm

That reminds of the Lenox Rehabilitation they did back in the late 90s. That was as close to a shutdown as it gets. Every weekend train service would single track between 96th and 135th with 20 minute headways in either direction. And that went on for MONTHS!!!

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Bolwerk April 15, 2011 - 10:35 pm

Yeah, it’s possible that would be desirable. Or not. Shutting down could just be a number of hours where non-idle trains simply aren’t pulling in revenue, even as the system has to stay on to marshal the trains in and out and let workers do maintenance. If the late night revenue really does cover its own variable expenses (the costs of employing train operators, conductors, electricity, additional wear and tear on the equipment), there’s little reason to shut the system down.

I don’t know, just saying it might be a reason.

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pete April 16, 2011 - 5:24 pm

No way night service can pay for itself. It probably has to do with labor costs. The overnight shifts are guaranteed by union contract forever (they would become no show shifts like other MTA union jobs, like the locomotive fire watchman that keeps the coals lit overnight in the diesel locomotives), and the union contract would require new shifts created to store and retrieve the trains that are stored during the overnight shutdown, on top of existing yard train driver shifts.

Bolwerk April 16, 2011 - 7:56 pm

It doesn’t need to pay for itself to make sense. It only needs to cover the variable costs of the night service (the ones that happen because of the night service). Since the system is going to be partially operational no matter what anyway, it might make sense to offer revenue service anyway – at least four a 4h30m shutdown.

In other words, shutting down revenue service could be a bigger loser than keeping some of it.

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