Asides

While the big stories out of yesterday’s Richard Brodsky’s committee hearing with Jay Walder focused around the Assembly rep’s pledge to help fund student transit, another comment by Jay Walder gave me hope for the MTA’s long-term capital plan. As Christine Quinn and Gene Russianoff’s Straphangers Campaign are pushing using stimulus spending to cover the MTA’s operating deficit, the MTA CEO and Chairman rejected this plan yesterday. Comparing this plan with Abe Beame’s 1970s decision to use capital funds to avert a fare hike, Walder explained why we need to continue investing in the long-term growth and maintenance of the system during times of temporary operating budget crunches. “I think the result of that [1970s move] was to drive the transit system into the ground,” Walder said.

Meanwhile, Crossroads, a Lehigh Valley-based smart growth blog, featured a recent report that explained why capital investment in transit makes economic sense. The a new study from Smart Growth America (PDF here) notes that spending on public transit produces twice as many jobs per dollar spent than investing in highway construction does. To remove stimulus funds from the capital plan and shuffle it to the operating deficit would both unnecessarily drain the capital budget and impact job creation at a time of economic uncertainty.

In the end, if the MTA can’t avert cuts and has to either reduce service to unacceptable levels or fire more people than they would hire through capital spending, I would begrudgingly support shifting stimulus dollars to the operating deficit. Until all other funding avenues are exhausted, though, Walder is right to reject this plan.

As the MTA has come to grips with its $400 million operating gap, we’ve heard a lot about rising labor costs and pension problems, but few have quantified exactly how much of the fiscal pie pensions take up. In a piece this weekend in The Post, Susan Edelman explored the cost of these pension plans. The numbers are startling. She says that 24,000 former Transit employees enjoy pensions and full post-retirement health care benefits. “The transit agency spent $533.6 million on pension expenses last fiscal year,” she writes, “and is expected to pay $550.5 million this fiscal year.”

What can anyone do though? One solution would be to try to raise the retirement age from 55 to something more in line with corporate America, but the demands of physical labor take their tolls on workers’ bodies before desk jockeys start to feel the effects of age. Somehow, though, these pension costs are going to have be reeled in because as the MTA pays more to former workers, its current customers are losing out.

Last week, I explained why I was not in favor of Gene Russianoff’s plan to use stimulus funds to cover the MTA operating gap. It’s not sound policy to move money from capital projects to operating deficits, and to do so would risk future MTA financial problems without solving the current one on hand. Today, Cap’n Transit comes out in favor of using stimulus funds but with a twist. He wants the unused Department of Transportation stimulus funds — those not being used to widen the Major Deegan or those earmarked twice for Brooklyn Bridge repairs — to fund the MTA’s operating gap. It is, of course, far better to use someone else’s capital funds to cover the MTA’s operating gap than it is to use the MTA’s capital funds to do the same thing. Sign me up.