It will be interesting to see if the Metropolitan Transportation Authority chairman following Jay Walder will be any more successful in dealing with the challenges ahead. The original proposed $29 billion five-year capital plan was cut to $24 billion, but still faces a $9 billion shortfall.
The next MTA chairman will have to deal with even more limited options than faced by Mr. Walder. There is only so much revenue from MTA Bridge and Tunnel toll fees available for transit. The infusion of $1.5 billion in American Recovery and Reinvestment Act stimulus funding two years ago was a one time only windfall.
A 9 percent unemployment rate continues to result in declining ridership and fare box revenues on most routes. The economic recession continues to impact both employee payroll and real estate mortgage transfer tax revenues.
Past plans for creating new revenues by tolling free Manhattan East River bridges and implementing congestion pricing continue to face opposition by a majority of members in both the New York City Council and state Legislature.
Neither the New York City Council, city comptroller, mayor, state Legislature, state comptroller or governor advocates or identifies any sources for increasing funding by the billions of dollars needed. This cash is necessary to support keeping the current fare structure, maintaining basic state of good repair and system expansions along with funding high tech improvements.
For decades, under numerous past MTA five-year capital plans, both the city and state collectively cut billions of their own respective financial contributions.
They repeatedly had the MTA refinance or borrow funds to acquire scarce capital funding formerly made up by hard cash from both City Hall and Albany. Fast forward to today. The city, state and federal governments all face current and future year multi-billion-dollar budget shortfalls accompanied by declining tax revenues.
To assist the MTA in balancing this year’s shortfall of hundreds of millions and billions more in the future, just which capital improvement projects would any elected official propose the MTA cancel to avoid the next round of fare increases? Which route(s) would they support service reductions to save operating dollars? What public official would volunteer to reduce service, cancel or delay any capital projects benefiting constituents in their district?
Delaying future fare hikes may not be a financially viable option.
Reductions in the frequency of cleaning subway and LIRR stations, buses, subway and LIRR cars, elimination of routes or adding to the waiting times for the next bus, subway or LIRR train as a means to save funds to fill budget shortfalls could be counter productive. Increasing crowding, reducing the number of available seats or trips on routes could make public transit less attractive.
The reaction could result in a significant number of riders returning to automobile use. Fewer riders mean less fare box revenue, thus impacting budgets.
Proposals for cost savings by consolidating various agency procurements or staff performing similar functions is a tired old cliche discussed for decades with limited results to date. The potential financial savings of several hundred million doesn’t come anywhere near bridging overall budget deficits in the billions. There are little remaining non-union senior management in the pool to target versus others.
Significant costs are locked in place such as salary, fringe, medical and pension costs for union employees. Negotiating with unions to allow management more flexibility in work rules and assignments might support greater productivity. Offering to share some of the savings accrued from this with workers to foster improved partnering between management and employees might also help.
Yearly interest payments on the MTA’s $30 billion long-term debt is taking a bigger bite out of future budgets, leaving less money for capital projects and making balancing budgets more challenging.
Future fare increases are inevitable due to inflation as well as increasing costs of labor, power, fuel, other supplies and materials necessary to run any transit system.
MTA services are still one of the best bargains in town. Since the 1950s, the average cost of riding either the bus, subway or commuter rail has gone up at a lower rate than either the consumer price index or inflation.
Prior to the Metro Card, which affords a free transfer between bus and subway, riders had to pay two full fares. Purchasing either a weekly or monthly pass further reduces the cost per ride. Thousands of employers offer transit checks, which pays even more of your costs. Perhaps paying a smaller hike now is better then a much larger one later.
In the end, quality and frequency of service is dependent upon a secure revenue stream. We all will have to contribute – be it at the fare box or tax revenues generated for different levels of government redistributed back to the MTA.
Larry Penner
Great Neck
