Early yesterday evening, news broke of a state error concerning revenue generated from the payroll tax that was supposed to bailout the MTA. Although up until last week, the state had been maintaining its initial figures, collection totals were $200 million off pace, and with a state appropriations cutback of $143 million going into effect, the MTA will end the year with $343 million less than expected.
Even though the state accountants are to blame for this large gap, for many New Yorkers, it will just be another arrow in the quiver of barbs to launch at the MTA. The agency, they say, cannot be trusted with any money because it all just disappears. Here, that’s not true, and as an agency spokesman said to me, Monday’s revelations represented “significant unraveling of the rescue package passed by the Legislature in the spring.” Twenty percent of the money promised by the state to the MTA just simply is not there.
The MTA and the state will now have to battle it out for funds, and the MTA will probably end up losing. Although they say they will do everything within their powers to avoid an unplanned 2010 fare hike, they might have to cut services across the board and will have to engage in serious internal belt-tightenin”
On the flip side, the MTA will be asked to do more. The agency will be asked to shuttle more people around New York City while relying on infrastructure that is badly in need of some major capital investments. The agency will be asked to provide more service to underserved areas, and more reliable and frequent service to those transit-rich neighborhoods. More, more, more is squaring off against less, less, less.
It is undeniable that the MTA is the engine that drives much of New York’s economy. The city is entirely dependent upon the subways for its transportation needs. Over seven million New Yorkers ride the subways each week day while Metro-North and the Long Island Rail Road each carry approximately 300,000. The MTA’s bridges and tunnels see just 800,000 toll trips per day. It is clear that the city’s road network and geographical reach make the subway the prime people mover in this urban area.
Outside of the city, the MTA’s economic reach extends throughout the state. As the Permanent Citizens Advisory Committee to the MTA noted during its statement last week on the MTA’s capital plan, “more than 60 municipalities through out the state of New York benefit from the MTA’s Capital Program through subcontractors for subway, bus and rail cars.” The 2005-2009 capital plan, they say, leveraged around $42.1 billion in economic activity from an original investment of $24 billion. The state, though, will not pledge to cover a $10 billion capital gap just as they can’t put together a proper bailout package to fund the MTA’s operations budget gap.
Still, forces conspire against a financially strapped MTA. As the agency’s fiscal picture heads further south, a group angling for TWU leadership posts is threatening “direct action” if the authority does not honor the arbitration award. The union leaders are simply upholding their duties to protect and defend their workers, but it is but another demand on money the MTA does not have. Somehow, the MTA is expected to find $300 million more every year for employee salary and benefits raises.
In the end, where will a looming financial Armageddon take us? The MTA is too important to fail, and it’s too important to roll back services. Maybe we’ll have skyrocketing fares, but more likely, we’ll have sensible funding mechanisms such as congestion pricing and East River Bridge tolls. For now, though, the MTA continually has to make do with less and less from the state while providing more and more for its workers and the millions of customers each day who rely on it for basic transportation needs. Something has to give.