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Congestion Fee

The return of the son of congestion pricing?

by Benjamin Kabak
written by Benjamin Kabak on January 26, 2011

As more and more members of the new Republican majority in the State Senator and a few Democrats too have taken aim at the state’s controversial commuter mobility tax, I’ve speculated about a tit-for-tat trade. In return for a reduced tax burden for suburban business, Albany could support and approve a congestion pricing fee for New York City with dedicated revenues for the MTA. For city transit advocates who have long pushed for a pricing plan, such a proposal would be ideal.

Today, we learn that forces are quietly gathering in Albany to push such a plan. With a new name attached to it — traffic pricing as opposed to congestion pricing — Sen. Daniel Squadron is, in the words of The Daily News, “rounding up colleagues” who will support his plan to charge $10 per car to enter parts of Manhattan. In exchange, the payroll mobility tax would be drastically altered.

Squadron, who is working with members of the Bloomberg Administration to develop a concrete proposal, sees congestion pricing as a way to restore stability to the MTA’s balance sheet. “The MTA needs a sustainable funding source,” Squadron said. “This has to be on the table.”

Adam Lisberg has more:

While there is no formal proposal, the money could restore some of last year’s MTA service cuts, halt the next fare increase and reduce the payroll tax outside the five boroughs…Now, backers call it “traffic pricing” – and want to build support among outer borough and suburban lawmakers before proposing a specific plan…

One idea would reduce the payroll tax on businesses outside Manhattan – which could win backing from suburban lawmakers. “Everybody out in the suburbs hates the payroll tax, so the idea of ‘feathering’ the tax could be helpful,” said one person involved. “This has to be a regional effort. It has to enjoy regional support,” the source added.

Driver fees could also reverse some of the MTA service cuts that eliminated two subway lines and 36 bus routes last year, and help plug the system’s $10 billion long-term maintenance gap. They could also delay the 7% fare hike scheduled for a year from now, backers hope.

Despite these hopes, Senate Majority Leader Dean Skelos seems less welcoming of the idea. In an interview today with Capital Tonight, he called congestion pricing “just another tax” and said he wouldn’t support the plan even if it resulted in a lower payroll tax for suburban businesses. It sounds as though the MTA might have to threaten steep fare hikes to see such a pricing plan realized.

Still, as someone who has supported congestion pricing since Day One and loves the idea of using this fee to reduce auto traffic while supporting transit, it’s tough to find anything wrong with this plan. I would caution its supporters not to overreach though. New York City residents have expressed their support for congestion pricing as long as revenues go toward the MTA, but how far can those revenues go?

Already, in the build-up to a concrete plan, early whispers have these revenues being used to (a) restore service lost to the June cuts; (b) lower or avoid the 2013 fare hike; and (c) help close the $10 billion gap in the capital plan. The money generated simply cannot go that far. Three years ago, officials estimated approximately $400 million in annual revenue from congestion pricing, and that’s enough to reverse the service cuts and likely avert some of the fare hike. It’s not enough to also begin bonding out the next capital plan. Someone will have to make some tough choices there.

From a policy perspective, I’d prefer to see congestion pricing revenue go toward expanding service. If that means capital investments and rolling back service cuts, then we’ll just suffer through another fare hike that’s probably inevitable anyway. By putting a price on driving, the city will send more people to the subways, and the system must have the reach and capacity to respond. The fare, while good for politicians looking to curry favors, matters less in the long-term than expansion and maintenance.

No matter the outcome, though, it’s nearing time to rally the troops for another fight. This time, the state, despite Skelos’ objection, should work to approve congestion pricing. For the sake of transit, for the sake of our productivity and for the sake of the environment, the city will be much better off for it.

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AsidesCapital Program 2010-2014

Station renewal program to target Outer Boroughs

by Benjamin Kabak
written by Benjamin Kabak on January 26, 2011

As the MTA has worked over the last few decades to get its stations into shape, many Manhattan stations have undergone lavish overhauls while relatively fewer Outer Borough stations have been spruced up. With projects along the Brighton, Culver and Rockaway Lines, that trend has begun to shift in recent years, and now, Transit is going to blitz 29 stations in Brooklyn, Queens and the Bronx as part of a $455 million renewal project.

As Pete Donohue reported earlier this week, Transit’s new Passenger Station Renewal Program will target a series of stations throughout the system that are suffering from neglect and is designed to improve components of these stations that are the worse. “The prioritization of stations in the ‘Renewal Program’ is based on a systemwide survey conducted by engineers who looked deeper than the usual signs of decay,” Donohue wrote. “They graded structural stability and other behind-the-tile conditions.” News of this component-based repair approach has been brewing since September of 2009.

According to Transit, the following stations will be spruced up and repaired over the next four years: Hunters Point on the 7; Fresh Pond Road and Senca, Forest, Knickerbocker and Central Aves. on the M; 80th, 88th, 104th and 111th Sts. and Rockaway and Lefferts Blvds. along the A; Ditmas and 18th Aves., Bay Parkway and Avenues I, P, U and X on F; Sutter, Saratoga, Rockaway, Pennsylvania and Van Siclen Aves and Junius St. on 3; and Middletown Road and Buhre, Zerega and Castle Hill Aves. along the 6.

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MBTAWMATA

The mirage of subway naming rights deals

by Benjamin Kabak
written by Benjamin Kabak on January 26, 2011

In Philadelphia, SEPTA has sold the rights to just one subway station. (Photo by flickr user Saturdave)

Every few months, as budget news trickles in and transit executives start talking about alternative sources of money and revenue streams, naming rights are dragged up by activists and enthusiasts. The idea is that resourceful authorities looking to generate free money can sell naming rights to private companies who stand to benefit from brand recognition. Disney owns Times Square above ground so why not sell the name of the Times Square subway station to the company?

On paper, it’s a great idea, and yet, in reality, it is one that has gained very little traction. In Philadephia, AT&T purchased the naming rights to the former Pattison Ave. complex at the end of the Broad St. line. They’re paying $3 million over five years. In New York, Barclays will append its name to the Atlantic Ave./Pacific St. complex with the Nets’ new arena opens, and they’re paying $200,000 a year for 20 years for that privilege. Finally, Chicago’s CTA worked out a deal with Apple for a station renovation sponsorship that includes the right of first refusal for subsequent naming rights deals. Only in Dubai, which managed to sell naming rights on 21 of its 23 stations before the emirate’s economy went bust, has seen prolonged marketing success.

This uphill battle isn’t stopping others from trying. Up in Boston, the Massachusetts Bay Transportation Authority is desperately seeking sponsors. Donna Goodison wrote of the effort in The Boston Herald this weekend:

The MBTA is considering selling naming rights for everything from the lines and stations of its subway, bus and commuter systems to its Web site, smart phone apps and Charlie Cards.

“We want to do it tastefully and not over-commercialize the MBTA,” said general manager Richard Davey. “I would probably be reluctant to rename Park Street the Anheuser-Busch Park Street Station. But, at the same time … we’re very open to hearing proposals.”

The MBTA is trying to close a projected $126 million budget gap for the fiscal year that begins in July. T officials are seeking a consultant to determine the feasibility of putting sponsors’ names on its assets and the revenue it could generate for the nation’s oldest subway system. “We’ve been pushing the last few months on a whole host of initiatives to try to capture non-fare revenue, from cracking down on parking scofflaws to possible naming rights,” Davey said.

More visual sponsorships are a possibility. If the Red Sox [team stats] wanted to sponsor the Fenway Station stop near its ballpark, the lettering could be redone in the team’s signature font. High usage and accessibility make the T a “compelling medium,” according to its pitch to consultants, but a smaller naming-rights effort went bust in 2001.

As Goodison notes, then-Transportation Security Kevin Sullivan tried to generate $22 million in revenue by offering up four popular subway stops — Back Bay, Downtown Crossing, South Station and Sullivan Square — for sale. The MBTA, however, received no offers even after extended the contract deadline and lowering the bid requirements. It’s beginning to sound like a familiar refrain.

Meanwhile, as MBTA officials claim that the advertising market has since changed, the WMATA board in Washington is heading down the naming rights route as well. As AFP recently reported, DC’s Metro is facing a $72 million, and it too will look toward naming rights to offset its gap. “We’re looking for creative ways to try to close that deficit,” Steven Taubenkibel, a WMATA spokesman, said.

In response to the news out of DC, Infrastructurist asks whether or not we should sell the naming rights to urban infrastructure, but I’m beginning to wonder if that’s the right question. Rather, is it at all reasonable to expect revenue from naming rights deals? Our limited experiences tell us that companies aren’t interested in shelling out big bucks, and many aren’t interested in shelling out any bucks. Citi, going through some tough financial times, declined to pay the MTA to slap its ballpark’s sponsorship on the Mets/Willets Point station in early 2009.

It seems that, for one reason or another, private companies just aren’t interested. Maybe they don’t want to be associated with something we view as dirty and unsafe. Maybe they don’t want their corporate image tarnished by association with beleaguered transit authorities. Maybe they don’t find the branding efforts to be worth it. Whatever the reason, municipalities aren’t earning much from naming rights deals, and the attempts to brand seem to be going nowhere fast. Until the money starts flowing in, perhaps it’s time to put this idea to bed.

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MTA Bridges and Tunnels

Video of the Day: Cashless tolling on the HHP

by Benjamin Kabak
written by Benjamin Kabak on January 25, 2011

No longer will E-ZPass-equipped cars have to slow down as they pass through the tollbooths at the Spuyten Duyvil Bridge along the Henry Hudson Parkway. The MTA last week kicked off its cashless tolling pilot in north Manhattan, and to coincide with the new program, they released the video embedded above.

“There’s a better way to collect tolls in the 21st century, and it’s called all-electronic tolling,” MTA Chairman and CEO Jay H. Walder said during the gate-removal ceremonial. “By removing the gate arms, we begin the process of ushering in this new era in toll collection.”

For now, the pilot will begin with gateless tolling on the E-ZPass side. Three cash lanes will remain open during the gateless part of the trial, and three E-ZPass lanes will be open for cars. The concept behind gateless tolling is both simple and not a new one outside of the confines of New York City. High-speed equipment can read the E-ZPass devices, and those cars who pass through the E-ZPass-only lanes without an E-ZPass will receive a $50 ticket in the mail.

Early next year, the MTA will unveil cashless tolling as well. The camera technology will be in place, and those cars without an E-ZPass will receive an invoice instead of a summons in the mail. The authority says it chose the Henry Hudson Bridge as the pilot for the first-ever fully-automated toll crossing because of its market share. Currently, 85 percent of cars passing over the bridge during the week use E-ZPass, and the ban on commercial traffic on the Henry Hudson Parkway make the pilot easier to manage.

For the MTA, this pilot is a big deal because of the impact a gateless and cashless tolling can have on its operations. Without the need to slow down to pay a toll, traffic will flow smoother through the Bridges & Tunnels crossings thus improving car efficiency and reducing emissions. The MTA can reduce its own toll-collection costs as well.

On a grander scheme, though, gateless, cashless tolling matters because of the way it disarms an anti-congestion pricing argument. As I wrote in September, one of the main contentions from the anti-pricing lobby concerned surface traffic. By installing toll booths, the spurious argument went, the city would contribute to congestion on local streets leading into Manhattan.

Of course, congestion pricing proponents knew that high-speed tolling was a real option, and now everyone will get to see it in action. The anti-congestion pricing congestion argument will disappear right before our eyes.

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AsidesMTA Economics

How much is that snow storm in the window?

by Benjamin Kabak
written by Benjamin Kabak on January 25, 2011

The December’s blizzard that struck the city and left much of the subway system paralyzed cost the MTA a pretty penny in lost revenue and unplanned overtime expenses. According to MTA officials, the storm cost $30 million overall. As amNew York’s Theresa Juva details, the authority estimated $16 million in lost fare revenue and $14 million in overtime. As The Post noted, the authority lost “nearly the same total amount in rider revenue for all of last winter” — during storms worse than December’s — “spent much less in overtime.”

As the papers note, in February of 2010, during two different storm, the MTA lost $17 million in fares and spent $8.3 million in overtime. The late February storm saw over 20 inches of snow fall on the city while December witnessed 19 inches blanket New York. These revelations have, of course, led to some more hand-wringing over the MTA’s snow response. Two board members told The Post that costs were so high due to the MTA’s delayed response over Christmas weekend.

James Vacca, chair of the City Council’s Transportation Committee had more choice words for the authority as well. “If they had acted sooner with more intensity of response, their overtime would have been less and more people would have been able to get on and use mass transit,” he said yesterday.

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MTA Economics

Why the MTA’s debt problem matters

by Benjamin Kabak
written by Benjamin Kabak on January 25, 2011

The latest glimpse at the MTA's debt service obligations. (Via)

The problem with building infrastructure is the need to maintain it in the future. As the MTA is learning right now, the bill always comes due, and someone has to pay. As the authority’s debt service obligations creep ever upward and will remain well above $2 billion a year through 2030 and $1 billion a year through 2040, the riders may inevitably have to bear the costs if the system cannot.

The theory behind debt is a deceptively simple one. When an entity — government or otherwise — needs to build something, it must raise capital to do so. Many corporations or organizations raise that capital by issuing debt based on time value theories of money. A debt-holder will turn over $1 now so that the builder has capital in exchange for a promise of more money in the future. That more money can be bonded from revenue-generating activities such as fare collection.

When building a subway line, debt is the perfect funding vehicle because future ridership projections can be used to estimate a bond issuance, and the revenue from that ridership can be used to pay down the debt. After a certain period of time, the debt will be paid, and the new infrastructure will be a profit generator. Unfortunately, this model of financing breaks down once an entity has to issue debt for maintenance of a vital piece of infrastructure rather an expansion, and the MTA is learning what happens when too much debt is used to sustain instead of expand a a pre-existing subway system.

Right now, the New York City Subways range in age from over 100 to nearing 80, and the MTA is tasked with making sure the system still operates 24 hours a day and improves. Unfortunately, maintaining the current status quo and even incremental improvements are not investments that should be funded with much debt. They don’t lead to an increase in ridership great enough to justify the debt and mean that we’ll be paying for today’s improvements in 10 or 15 or 20 years when more improvements are necessary. That, in a nutshell, is a simplified view of one of the drivers of the MTA’s current financial crisis.

Right now, nearly 20 percent of the authority’s annual expenses consist of debt service payments, and according to the MTA’s CFO, that situation is only going to worsen without city or state help. In speaking with the MTA Board’s Finance Committee yesterday, Bob Foran warned of the spectre of a looming debt service increase. Reuters reported the following:

The New York Metropolitan Transportation Authority might have to raise subway and bus fares by approximately four-and-a-half times the last fare increase to cope with a jump in debt service that kicks in as soon as 2016, Bob Foran, the MTA’s chief financial officer, said on Monday.

The MTA, the nation’s biggest mass transit agency, has a balloon-type borrowing program in which the amount repaid rises sharply in later years. Monday was the first time officials spelled out the impact the rising debt service could have on fares if no additional state or federal aid is received.

An MTA spokesman said fare hikes of the magnitude cited by Foran are not being considered.

We know that the MTA is going to raise fares again in approximately 23 months and will likely continue to request biennial increases to meet the growing expense pie. This debt service warning is a real one that, while seemingly obtuse, riders should take seriously.

As these financial questions arise every so often, I’m often asked if the MTA can declare bankruptcy, and the short answer is that it cannot. Its obligations are state obligations, and the state would have to grant the MTA permission to enter bankruptcy. The authority still has a strong credit rating, and it still is going to issue debt. Meanwhile, commentators including Nicole Gelinas and Joe Weisenthal say that the MTA should be more concerned with the state going bankrupt than vice versa. Neither solution would lead us down a good path.

Ultimately, the lesson is one that few politicians take to heart. Without state contributions, the MTA can maintain its system only through more debt, and the MTA must continue to maintain its system. Since politicians won’t be in office when the MTA must scrounge up $2.5 billion for debt service payments in 2025, Albany is more than willing to shirk current funding obligations and foist them off on future generations. Eventually, we the riders will have to pay one way or another.

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AsidesService Cuts

Death by a thousand cuts

by Benjamin Kabak
written by Benjamin Kabak on January 24, 2011

During the MTA Board’s committee meetings this morning, New York City Transit unveiled plans to adjust its bus scheduling, and the result are a bunch of minor cuts to bus schedules throughout the city. No routes will be scrapped, and the J train will in fact enjoy two additional morning trains. But neighborhoods will see bus wait times inch upward as certain routes are cut.

The changes, which you can find right here as a PDF, come across as minor. Some buses will see headways increased from 10 to 12 minutes. Others will see wait times go from five minutes to five minutes and thirty seconds. A few routes in some of the outer boroughs and Staten Island will see off-peak headways increase from 15 minutes to 20. Because of the addition of a few routes and the increase in J service, these changes will actually cost the MTA $300,000 a year, but they are cuts nonetheless.

According to the committee documents, the MTA is putting forth this proposal to “ensure that bus and subway schedules accurately match current rider demand and operating conditions…These changes also address the need for running time adjustments to more accurately reflect observed operating conditions.” It all sounds good, but there’s a fundamental problem of supply and demand. When it comes to public transit options, supply often drives demand. If I know a bus runs frequently and regularly, I’m more likely to take it than I otherwise would be. If Transit cuts back bus service so that trips are less frequent, it will make the bus a less attractive transportation alternative and will further drive down demand until they can cut the supply to zero. In a world where public transportation is a public good, these scalebacks are just a part of death by a thousand cuts.

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AsidesMTA Politics

Cuomo set to retain Walder as MTA’s top dog

by Benjamin Kabak
written by Benjamin Kabak on January 24, 2011

Update (4:35 p.m.): Here’s a rare bit of good news out of Albany concerning the MTA’s future: Gov. Andrew Cuomo has decided to keep Jay Wader as head of the MTA and Christopher Ward as Executive Director of the Port Authority, Erik Engquist of Crain’s New York reported this morning. According to the story, Walder has already been informed of the decision, and Cuomo, who “credits Mr. Walder with finding efficiencies worth hundreds of millions of dollars” at the MTA, appears pleased with Walder’s tenure at the MTA. Engquist’s sources say that Walder’s Golden Parachute provisions had nothing to do with Cuomo’s decision.

As Crain’s notes, “the decisions to keep the Port and MTA chiefs are not likely to draw many objections, except from the Transport Workers Union, which has attempted to demonize Mr. Walder in an effort to gain leverage in contract negotiations.” I’d say that’s an accurate assessment. The TWU fears an MTA head with the full support of a governor who has discussed going after union contracts while transit advocates have praised Walder for his willingness to cut the MTA’s fat while moving the subway system and its technology into the 21st Century. All in all, it’s a good move to keep Walder on, and the MTA will be able to enjoy stability at the top for the next half a decade.

Gene Russianoff, head of the Straphangers Campaign, voiced his support for the move this afternoon. “Governor Andrew Cuomo did the right thing keeping Jay Walder – a transit professional – MTA Chairman and CEO,” he said in a statement. “Hopefully, this positive signal will be followed by positive actions, including Governor Cuomo’s not raiding dedicated transit funds, as well as coming up with the billions needed to repair our aging transit system.”

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Subway Security

Blaming smart phones for an uptick in crime

by Benjamin Kabak
written by Benjamin Kabak on January 24, 2011

As the MTA gears up for another round of board meetings this week after a six-week winter hiatus, the crime numbers are going to take center stage. Already, amNew York’s Theresa Juva has noted an uptick in subway crime, and as this is the first such increase since 2004 and only the second since 1997, subway watchers will try to figure out why.

The pure numbers themselves aren’t too shocking, and subway crime is still near all-time lows. Yet, the slight increase is there. The New York Police Department reported 36 more felony assaults in 2010 over 2009 and 91 more grand larcenies last year over the year before. Percentage-wise, felony assaults were up 23.2 percent, and grand larcenies were up 7.7 percent to 1269.

One of the key drivers behind the increase in grand larcenies, as the police noted in December, is the proliferation of smart phones. The New York Penal Code defines a grand larceny as the theft of “an access device which the person intends to use unlawfully to obtain telephone service.” In non-legalese, then, that means any time a perp robs another of any cell phone — a Droid, a Blackberry, an iPhone, you name it — it’s a grand larceny. As Raymond Diaz, head of the NYPD Transit Bureau chief, said last month, “The snatching of electronic devices seems to be our biggest concern with crime.”

In amNew York, Juva wonders if “the bad old days underground have returned.” While a seemingly natural question, it’s tough to look at these numbers and conclude so. Even as late as 1997, when the subways were far, far safer than they were in 1987, grand larcenies totaled 3463 or nearly three times as many as police recorded in 2010. That year, cops reported 17.04 major felonies per day, but even with the increase last year, the NYPD counted just 5.96 major felonies daily — out of five million weekday riders.

Cops and rider advocates pointed fingers in different directions. A police spokesman told amNew York that “teen-on-teen” crime is to blame for the increase in grand larcenies. After kids get out of school, they seem to like to take each other’s phones. “Deployments are designed to address after-school ridership when most teen on teen crime occurs,” the department said.

Others looked, naturally enough, at the decline of the station agent. “There are less eyes and ears in the system and many more things to take as more gadgets are displayed all over the place,” Transit Riders Council chair Andrew Albert said to Juva.

On the one hand, I can see why Albert wants to blame the decrease in station staffing levels. If someone’s iPod is snatched and no station agent is present, the victim must track down someone to help. By the time he or she reaches street level and can call the cops, the perpetrator is long gone. On the other hand, it sounds that most of these grand larcenies are of the snatch-and-go variety. Someone looking for an easy score grabs a phone out of their victim’s hands and then bolts out of the subway car as the doors close. The victim has no recourse whether a station agent is there or not.

As I wrote in October, I believe the increase in thefts to be a result of our obliviousness. As the subways are drastically safer today than they were 13 or 23 or 33 years ago, New Yorkers are more comfortable riding with luxury. We flash everything from Kindles to iPads to laptops and just assume that subway crime won’t happen to us. Toward the end of the year, grand larceny reports spiked, and that’s when people needed money the most. Cell phones are an easy target, and as long as riders stay aware of their surroundings, those numbers should decline naturally this year.

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Subway Maps

Videos of the Day: The sounds of the subway map

by Benjamin Kabak
written by Benjamin Kabak on January 22, 2011

Conductor (Interactive instrument in progress) from Alexander Chen on Vimeo.

Check out this video from Alexander Chen. He currently works at the Google Creative Lab and has producing interactive works since 2003. The piece above takes the Vingelli subway map and some HTML 5 and Javascript coding to create a musical work out of the subway map. Says Chen on his blog:

Tentatively titled Conductor, it recreates the New York subway system as a musical instrument. It’s currently built in HTML5 + Javascript. SVG was very useful, as I could create the design in Illustrator, then import the coordinates into Javascript.

These videos are still in-progress tests. I plan to import an actual subway schedule from the MTA’s subway API and have subway trains triggering the performance. After that, I hope to start on an iPad version that would function more as a user-driven instrument.

I decided to use Vignelli’s beautiful 1972 subway map as a starting point for the design. Which will be interesting because a few lines like the 8 and 9 no longer exist.

In another piece embedded below, Chen used moving trains along the lines of the map to create a different piece. These are still works in progress, and Chen says he’ll post updates at his site. Check it out. I love creative uses of the subway map imagery, and these are quite unique.

Conductor (In progress demo) from Alexander Chen on Vimeo.

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