The Metropolitan Transportation Authority is facing a crisis of credibility.
In just a few days, subway and bus riders will be hit with the largest fare
hike in history. Earlier this year, when talk of a fare hike was growing, I
urged the MTA to delay consideration of an increase and open its books
so all New Yorkers could know if such an increase was necessary.
Had the MTA heeded my call, their integrity would not be in question.
After three months of analyzing the New York City Transit Authoritys
finances, I have concluded that the MTA has broken its public trust and misled
New Yorkers with unclear and inaccurate reporting of its financial position.
The issue is clear: Straphangers should not be asked to accept a fare hike
without accurate evidence detailing its necessity. That is currently not the
case. We have found that the books used by the MTAs Board to determine
the need for an increase were incomplete, misleading and obfuscating. There
is simply no way these books could have provided the board with the basis for
sound policy making.
My audit made five key findings:
Specifically, it found an undisclosed $300 million account that was
characterized as an investment pool. What this money was for,
how it was spent and when it was spent remains a mystery, because the MTA
refused to disclose this information.
Furthermore, the Transit Authoritys numbers just did not add
up. For example, in 2001 and 2002 financial reports, the Transit Authority
overstated its operating expenses by more than $850 million. This kind of
accounting error gave the impression that the authoritys operating deficit
was actually larger than it was and exaggerated the need for a fare
The Transit Authoritys 2003 operating budget proposal was woefully
incomplete. It lacked basic, critical information, such as the costs associated
with the recent collective bargaining agreement and the additional revenues
that transit officials believed a fare hike would produce. Conveniently, the
board voted to approve a revised budget that included this information three
weeks after approving the fare increase. The agency even tripped over its
own numbers. The proposal contained conflicting deficits on one page
it put the deficit at $1.632 billion and, on another, $2.009 billion. The
public, elected officials, and the MTA Board put their faith in a document
that told two different stories.
The Transit Authority overestimated the drop in ridership due to the
fare increase, contrary to its own historical data. This served to deflate
future revenues and further justified their call for a 33 percent fare hike.
My audit confirmed that New York City subway riders get shortchanged
by paying a larger share of their systems budget compared to their suburban
counterparts, who ride the MTAs commuter lines.
The MTA Board should re-examine the need for an increase, this time using clear
and accurate financial information. At least then, all New Yorkers could be
confident that a hike of this magnitude, while painful, may also be necessary.
Yet there is a larger issue at stake. We need to change the culture that leads
transit officials to believe that the system belongs to them and that
they are accountable to no one.
The citys transportation system belongs to the people. The people have
a right to understand its finances and make judgements about its policies. It
is the responsibility of the MTA to ensure that it answers not only to its board
but also to the public and their elected officials.
William C. Thompson, Jr. is the Comptroller of the City of New York
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