Category: MTA Economics

The City Hall stop, open to Transit Museum members this past weekend, evokes the grandeur of another age. (Courtesy of Triborough on Flickr)

Toward the end of last week, I wrote about the financial troubles of the MTA’s current capital fund. Over the weekend, a more influential voice chimed in as The Times ran an editorial in The City Section urging Albany to folk over the funds for the necessary subway repairs.

Here’s what The Times had to say. It’s nothing groundbreaking, but it’s good to see New York’s paper of record taking up this underreported cause even if just in The City section.

Underfunded for years by the administration of Gov. George Pataki, the M.T.A. became dependent on borrowing to make up the difference, and it has had to divert hundreds of millions of dollars annually just to service the debt interest. Ever-increasing operating budget shortfalls are projected, approaching $2 billion in 2010. Mr. Spitzer’s first budget seems to do little to change the trend.

All this occurs as the city relies more and more on public transit. Some 7.5 million people ride daily, more than ever before. And as the population continues to grow — to a projected 9 million in the next 20 years — the battle against wear and tear can be expected to further overwhelm resources. The city’s subways are in much better shape than they were in the 1980s, when filth, delays and crime were commuters’ constant companions. To remain that way, and to meet future needs, the system needs intensive care, and a realistic contribution from Albany.

Personally, I couldn’t agree more. New York itself is sitting pretty politically these days. Our Senator with Brooklyn roots just delivered the Senate into Republican hands. A Manhattan representative holds the purse strings in the House. And our governor is a city boy as well. I have to hope that the MTA and the five boroughs can enjoy some of the political pork as spoils soon.

The editorial in The Times also delves into my territory: the Second Avenue Subway. The Times board believes these big projects such as the Second Avenue Subway should be put on hold indefinitely while the necessary upgrades and modernization projects are completed. To this, I say, no. The Second Avenue Subway has been put on indefinite hold for the past 70 years, and it’s time for this project to go forward.

As the trains on the East Side grow more and more crowded, what better way exists to alleviate the pressures on that aging system than by building a new line parallel to that one? While I am no MTA economist, I have to believe that a new line in an overtaxed area may actually lower the modernization costs for the old line because the system wouldn’t be facing the same crush of people as the 4, 5 and 6 do now.

Of course, I know the city needs to maintain the current system so that everyone can keep riding. But they need to find a way to build new lines at the same time. We should be working to find money for both and not just one of the projects. It’s too bad The Times didn’t acknowledge that on Sunday as well.

The BMT’s Chambers Street is one of many stations badly in need of renovation. (Photo courtesy of NYCsubway.org)

With money tight and an aging system in disrepair, it has been a rough week for the Metropolitan Transit Authority.

The bad news started Wednesday with a report in The Times. Never known for its efficiency in repairs, the MTA is already $1.4 billion over budget on a five-year, $21 billion improvement plan, and they are not even halfway through the renovations yet. Here’s what the venerable paper had to say:

Among the projects in that program are renovations to subway and commuter train stations, maintenance of antiquated signal systems, and the purchase of hundreds of buses and subway cars, and many of the projects may be affected, officials indicated.

Much of the problem has been caused by a rapid increase in the cost of construction in New York City, as a result of rising prices for materials and the large number of new projects, which gives contractors the leverage to charge more. In many cases, fewer companies are bidding on projects and offers are coming in much higher than expected.

Another problem is the weak dollar, which appears likely to raise the cost of a contract for subway cars with French and Japanese companies.

While these problems extend beyond the buses and subways, we’ll ignore those pesky commuter rails for now. They’ll take the blame in a little while.

So what’s happening here? Well, most notable are the bids the MTA is receiving. If the MTA estimates a project to cost $200 million but the only bid is for $300 million, the Authority can either reject this bid and re-open the bidding or pay more than they expected. In many cases, the latter has happened.

In the article, Lee Sander, the MTA’s new CEO, has promised to “look at the issue” of rising construction costs, but I doubt he could do anything. But the juicy bit from Wednesday comes from Gene Russianoff, a lawyer with the influential Straphangers Campaign.

Mr. Russianoff said he was concerned that officials might push ahead with such high-profile undertakings while sacrificing some of the smaller projects needed to keep the transit system in good shape, like buying new subway and rail cars and making station repairs.

With the article laying the blame at the high costs of the Second Ave. Subway, the 7 Extension and the (as yet undiscussed here) plan to link the LIRR with Grand Central, Russianoff’s statement is full of contradictions. As the Straphangers have pushed for the additions as well as the necessary maintenance of the existing lines, the position seems irreconcilable.

But not so fast. Maybe Russianoff has a point as the Straphangers attempt to prioritize spending. They aren’t the only ones clamoring for proper funding. The City Comptroller William Thompson has joined the fray nothing that the MTA needs the funds for routine upgrades or riders could face massive service disruptions in the coming years.

He raised the specter of similar disruptions when he released an investigation of the ways MTA investment continues to ignore the antiquated subway system.

“NYC Transit is simply not getting its fair share of the Metropolitan Transportation Authority’s core capital funding,” he said, noting the city’s system carries nearly 94 percent of all MTA riders but receives just 75.5 percent of funds in the agency’s 2005-09 capital plan. And that “historical” shortchanging has worsened, he complained. Back in the 1992-’96 capital plan, NYC Transit got 77.5 percent.

Remember how I said we would come back to those pesky commuters? Well, um, yeah. It’s your fault our subway system is in disrepair just like it’s your fault that our subways fell into such disrepair as the suburbs became such an important part of the New York Metropolitan Area and the city became the neglected eye sore.

Thompson was a bit upset tonight. He noted that necessary upgrades have been delayed for 15 years and many won’t be completed until 2028. He focused on problems of security and, more simply, on-time train functions. One of the biggest areas of concern is the subway’s antiquated signal system. A fire in 2005 shed some light onto this problem, but as Thompson pointed out, the majority of signals are over 70 years old. The system is antique, and the technology is long outdated. And let’s not even start on the public address system.

So it’s been a rough week for the MTA. But the truth is that it’s been a rough existence for the MTA. These funding problems are nothing new, and next week, I’ll explore an issue that I believe to be at the root for these problems: The history of the 5¢ fare. For too long though New Yorkers have dealt with poor finances in the subway. We need the upgrades Thompson pushes and we need that Second Avenue Subway and 7 Extension. This ride will get interesting this year no matter what.