A whole Lhota problems loom for the MTA

Joseph Lhota will assume his role atop the MTA with a long list of worries.

As the MTA has weathered one financial crisis after another and as the agency has gone through various CEOs, chairmen and executive directors over the past five years, the authority’s political situation hasn’t improved. Elected officials use the MTA as a personal piñata, highlighting the ills of the bloated bureaucracy while ignoring the systemic problems that stem from Albany’s unwillingness to answer tough questions about transportation policy. It’s little wonder the MTA’s most qualified leaders have left or been pushed out long before their terms are up.

This week marks yet another new era as Joseph Lhota takes over as interim head of the MTA. Nominated a few weeks ago by Andrew Cuomo, Lhota won’t lose the interim title until the State Senate gets around to approving him, but those hearings aren’t expected to reach the legislative calendar until January. When they do, you can bet that representatives will pepper Lhota with everything they’ve got with a special focus on the payroll tax, but in the meantime, the MTA’s problems wait for no one.

In advance of Lhota’s star turn atop the MTA, Crain’s New York, one of the most influential business magazines in New York that really seems to get it with respect to transit policy, has some advice for Lhota. The paper’s editorial board wants the new chair, without his transit background, to continue to move the MTA forward, and to do so, they urge him to follow the path forged over the past two years by Jay Walder. Essentially, they want Lhota to be Walder but with the backing of Cuomo and the focus on streamlining management which allowed Lhota to draw praise when he served New York City under Rudolph Giuiliani.

To welcome Lhota, Crain’s warns that he is “in for a wild ride.” The MTA suffers from “an image problem, a budget problem, a political problem and a labor problem: It has a reputation for overspending, its capital plan could soon run out of money, it is distrusted by legislators, and its unions are obstinate.” Sounds like a fun job, no? They continue:

Despite all that, the MTA is in better shape than most U.S. transit systems. Midday trains in Washington, D.C., for example, show up only every 20 minutes. But no American city relies more on mass transit than New York, so forget the comparisons. The point to remember is that the better the MTA functions, the more our regional economy flourishes. When the fragile, century-old system breaks down, the economic loss is incalculable.

That is often forgotten because critics focus on the MTA’s spending, which could reach $17 billion next year. Of course, we agree that fiscal efficiency is also important—both to limit fare increases and to make politicians amenable to increasing transit funding. The MTA has a larger budget than most states and is routinely mocked by the media, making it easy for elected officials to bluster about its wastefulness. But the outgoing chief, Jay Walder, squeezed $4 billion out of the five-year capital plan, slashed $525 million from annual operating expenses (only $93 million through service cuts) and trimmed 10% from the $550 million overtime budget—a creditworthy performance. Mr. Lhota must persuade lawmakers that the agency has become leaner, and get them to fund the next three years of the agency’s capital plan so the MTA doesn’t resort to running up debt.

Mr. Lhota is known for his political skills and connections, but it will be hard for him to get help from the Republican-controlled state Senate, which voted this year to eviscerate the payroll tax that sends the MTA $1.5 billion a year. Assembly Democrats killed that legislation but show no sign of providing the funding increase the MTA needs to maintain buses, trains and tracks. Mr. Lhota should remind the Legislature that every failure of old MTA equipment not only inconveniences thousands of riders but costs businesses and the government money.

Crain’s advises Lhota on a few of the challenges he faces over the next few months. The business magazine wants the new MTA head to focus on arcane work rules as he negotiates with the TWU, and they want him to use cost savings to fund capital projects and not, as the union will want, wage increases. They also want Lhota to ensure that Cuomo is more responsive to the needs of transit riders and signs the lockbox bill that has languished on his desk for months.

Transit, ultimately and much to my chagrin, isn’t an issue that riles up voters as much as it should. Generally, straphangers who ride the subways are more attuned to those politicians who bash the MTA for failing to provide “adequate service” while constantly raising fares and cutting costs, routes or cleaning positions. Yet, that failures stems from the actions of those who oversee the MTA and its funding apparati. If Lhota has a mandate to cut, cut, cut, the MTA won’t be any better off in two years than it is today, but if the new head is willing to take the political clout he has to improve the system, moving forward won’t be an unattainable goal.