May 15, 2003
From the desk of Jane Galt:New York City Metro Issues
Now that it's all metro, all the time, a correspondant writes to ask if it's true that the MTA lied about it's finances, or whether that's just rhetorical handwaving. The answer is, sorta.
The MTA wasn't totally clear about its finances. But in its defense, it wasn't legally obligated to be.
The Straphangers campaign is basing its lawsuit on the fact that Alan Hevesi has charged that the MTA has $500m more in surpluses than it revealed to the public. It got one of New York's famously liberal judges to go along with this, and rule that the MTA has to roll back the fare increases because the public hearing wasn't fair. Never mind that this may not be technologically feasible and will cost $2m, in addition to the $1.2m in revenue the MTA expects to lose per day.
But a quick glance at the numbers readily available from the indispensible Independant Budget Office reveals that the straphangers are telling less than the full story.
The MTA is projected to lose $250m this year, and $750m next year. That's more than twice the surplus that's supposed to save us, just for two years. And unlike a regular business, the MTA can't exactly cut costs elsewhere. It's largest expenses by far are its union labor force, infrastructure operation, and debt service, none of which are fungible without deep service cuts. And with employment down and the economy projected to remain in the doldrums for the foreseeable future, it's no good betting that rising ridership will save the system.
So while it's possible that we didn't need to raise fares right this instant, it's a pretty good bet that we'd have to do it pretty soon -- and before you've spent down the cash reserves isn't a bad time. And it's thoroughly foolhardy to roll the changes back, with all the attendant chaos, merely to reimplement them in another six months, even if such a thing could be accomplished.
Posted by Jane Galt at May 15, 2003 12:06 PM | TrackBack | Technorati inbound linksNone of this matters if your brain isn't balanced.
http://www.guardian.co.uk/life/news/page/0,12983,937443,00.html
And it is no surprise that the action had been stayed pending appeal.
The MTA set itself up for these problems with boneheaded moves like the overpriced reconstruction effort on No. 2 Broadway, the agency's new headquarters which was built in the early 1960s as the world headquarters for Chase Manhattan Bank. As rehab costs soar towards the half-billion mark, it made other allegations of MTA budget shenanigans easier for the public to believe, so Alan Hevesi's charge that the agency lied about its need to increase the fare hit home.
However, given the fixed costs the system has, including the union contracts that make up the bulk of those expenditures, if the MTA doesn't increase its revenues, it has to cut it's non-salary expenditures, which is what happened 35 years ago, after John Lindsay's disastarous transit labor agreement set New York on the road to its near-bankruptcy in 1975. Back then, in order to balance its budget, the TA (and then MTA after 1968) cut the system's preventive maintenance, which resulted in the graffiti-adorned cars that were replete with non-working doors, burnt-out motors, broken down air-conditioning and shorted out interior lights that New York became infamous for during the 1970s and early 1980s.
There's no doubt the MTA wastes money, but if you pushed the Straphangers organization -- which is part of the Ralph Nader-created New York Public Interest Research Group -- to say what they really want, it would be completely free subways, as if the transit fairy was going to magically come in and pay all the salaries, pensions and maintenance costs. They know they can't get that, either through the legislature or by judicial fiat, but they'll settle for keeping the $1.50 fare and then wonder a few years down the line why the trains are breaking down again and the number of riders are declining.
Allow me to reiterate what I said a few days ago: New Yorkers have nobody to blame but themselves! They have lived beyond their means for many years. The crap is hitting the fan--and the rest of us should not be conned into picking up the tab.
Just remember that New Yorkers elected all these goofy liberal politicians. We cannot allow these idiots to now go to Washington, DC, and get the federal government to bail out the MTA. They made their bed and now must sleep in it.
"Public Transportation" at $2 per ride is an oxymoron. The problem is that no private company has ever made money charging "reasonable" fares. There are some things that the "community" has to agree to subsidize out of a general fund. BUT when you stir labor unions into the mix you can forget all "community".
A long time ago somebody in Washington told New York to "Drop Dead" when their budget went out of control. New York now may be like France with their runaway union costs overwealming the entire city structure.
I still say $4 per day for "Public Transit" sucks.
The lack of private ownership/operation of mass transit can pretty much be laid at the feet of "Citizen Kane" -- William Randolph Hearst -- who was pushing for city ownership of the subways before the first IRT train ever rolled into the station in the early 1900s (Hearst eventaully became an FDR-hating Republican, but back in 1900, the New York Times was a conservative Reupblican newspaper, so things do chage a bit in a century).
Hearst was the one who pretty much pushed the leftist line back then, and eventually got William Hylan elected mayor at the end of World War I. He barred the companies runinng the subways at the time from raising ther fares above a nickel to meet costs, and eventually got the city to build the IND system to compete directly with the privately-owned lines.
The combination eventually put those lines in such bad financial straits they were taken over by the city in 1940. It's also worth noting that since the city took over operations, virtually no new routes have been built over the past 63 years.
Hearst was the Howell Raines/Pinch Sulzberger of his time, with pretty much the same long term results for New York. Wells savaged him in "Kane" for what he had become by 1941, but he deserved it for the damage he did to New York municipal politics between 1890 and 1925.
New cost of a monthly NYC Transit pass that allows for unlimited rides is $70. (Old cost was $63)
Estimated monthly cost of owning a car in NYC:
Payment ~$200-300
Insurance ~$100
Gas ~$30-50
Parking ~$300-700
Still seems like a bargain to me.
And don't forget the massive subsidies that the subways receive from the tolls on the bridges. That always irritated me when I lived in Merrick and commuted to Mt. Vernon. For a distance of 35 miles, there was NO reasonable public transportation alternative, because going LIRR to subway to MetroNorth would take 2.5 hours one-way! So I was far from comforted to know that a large portion of my bridge tolls was being used to subsidize the subway riders.
If you want a better comparison of what the NYC subway should cost, look at the DC system, where the fares are based on distance traveled.
A couple thoughts ... I don't think subway fares can be correlated with the state of the economy. If anything, a recession will cause people to forego vehicles in the city, forcing them to subways and increasing ridership.
I don't know if tolls actually subsidize subways, but if they do it is because subway ridership is desirable to the city in comparison with more cars on the road. Lower tolls, you'd get more people opting to drive, increasing traffic congestion/pollution. More subway riders mean more marginal revenue for the MTA, with very little marginal cost.
"It's also worth noting that since the city took over operations, virtually no new routes have been built over the past 63 years."
That has more to do with the cost of land and labor increasing. We can't dig up streets for years at a time in this day and age, and don't have hordes of immigrant workers making pre-minimum wage law wages.
Aha, but the city, and then the state, passed bond issues to build the Second Ave. subway twice, the first time in 1950 and the second 20 years later. In the first case, because polticians had kept the private companies from raising the fare for so long, the money from the bond issue ended up paying for replacement of existing rolling stock in the mid-1950s (some trains dated from the system's creation in 1904) and extension of local platforms, which were only five cars long. The second time, in 1970, work actually was started on the new line, but when the city hit its bankruptcy crisis the bond revenues were detoured into the general funds and the construction stopped.
The MTA just had a public hearing earlier this week on attempt No. 3 to build the Second Ave. line, which is designed to relieve the horrid overcrowding on the only other east side subway, on Lexington Ave. It's supposed to be a "deep tunnel" design like the DC subway, which means only the areas around the stations will be torn up (though having lived on Connecticut Ave. during Red Line work, that tearing up is substantial). But once again, if the politicians suddenly find a more compelling use for the money -- at least in their own minds -- the project will again die. A shared project with private investment would have mandated the money raised actually be used for what it's intended for, but that option was killed off by the city's political leaders over 75 years ago.
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