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Making the MTA Play Fair and Square

by Bruce Schaller, May 19, 2003
 

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The ruling by a State Supreme Court judge on May 14 that the Metropolitan Transportation must roll back its first fare increase in eight years represented a surprising turn of events. State Controller Alan Hevesi, whose report charged that the MTA misrepresented its finances, called the ruling "a great victory."

The public reaction, on the other hand, was to keep the champagne corked. The Daily News quoted Jessica Alexander, getting off the F train in Queens, saying "That's nice for now, but I'm sure the fare will go back up again before we know it." Another rider quoted in the Times commented, "I don't see how they can go back on what they've already decided. That's politics."

Not only politics but also the law. The MTA immediately appealed the ruling, halting, at least for now, the fare rollback. As the public has figured out, Judge Louis B. York's ruling is highly unlikely to result in a permanent rollback to the old $1.50 base fare. Even if the MTA were forced to go back to the old fare, the agency could hold new public hearings and re-institute the $2.00 fare. The ruling itself could be overturned on appeal in the next several weeks.

So what does this ruling mean? Is there any reason for transit riders to celebrate?

ACCURATE INFORMATION

In an article for Gotham Gazette, Gene Russianoff, the senior attorney for the Straphangers Campaign, which brought the lawsuit, says he hopes the decision forces sweeping changes in the way the MTA reports its finances.

Thus, the court case is less about a rollback in the fare than making the MTA play fair and square. It is about the integrity of the public hearing process. Judge York called the $2.8 billion budget deficit figure in the MTA's notice for the public hearings on the fare increase a fictitious gap that "had a chilling effect on the public, discouraging an open and complete discussion of the proposals and foreclosing the presentation of creative alternatives." The judge concluded that the MTA's hearings were based on the false and misleading premise that the MTA was in worse financial condition than it knew itself to be."

Without accurate information, the public could not meaningfully comment on a proposed fare increase. As the judge noted(in pdf format), although the MTA has the legal authority to raise the fare as it sees fit, this power is subject to certain safeguards that include a fair and open hearing.

In sum, the court ruling affirms that accurate information plays a vital role in maintaining public confidence in public authorities. This may seem obvious to many but it was not obvious to the MTA, which argued in court that it had no obligation to share financial information with the public.

But would an honest process make any difference? Are many riders correct in assuming that the fare would go up whether or not the public had accurate information about the MTA's finances? And even if the MTA is not financially strapped in 2003, won't it need a fare increase next year?

There is much reason to be skeptical about the public hearing process for the MTA or any other agency. The most insightful and influential public comment is often made not at hearings but in news articles, editorials and op-ed pieces. Hearings can become an exercise in the mutual infliction of pain: you'll raise our fare, but you'll have to suffer through listening to me before you do.

Just as there is good cholesterol and bad cholesterol, there are good and bad public hearing processes. Designing an effective public participation process, satisfactory to all interested parties, is no easy task.

One key is accurate information, distributed early in the process. The lack of accurate financial information was obviously the focus of the suit against the MTA.

CLEAR PROPOSALS

But good information is not the only requirement. Guidebooks published by the Environmental Protection Agency, the California Public Utilities Commission and a commentaryby the Association of the Bar of the City of New York, stress the need for informal meetings conducive to open discussion as well as formal public hearings. Also important is the transparency of the process, direct involvement by key decision-makers and responses to comments. Federal agencies must respond in writing to each comment submitted during a formal rulemaking process.

The MTA's recent proposalsto publish more extensive financial information and provide more time for public comment and input from elected officials are welcome steps toward a more transparent budget process.

Interestingly, the city has much more stringent procedures than those the MTA followed for this year's fare increase. The City Charter requires that before adopting a new regulation, such as an increase in the taxi fare, the department involved must state what exactly it proposes to adopt and what the purpose of the regulation is.

This year, the MTA never put a specific proposal before the public. Instead, it published a series of options with different fare structures that would raise different amounts of revenue. These options provided a good starting place. But the MTA did not publish a final proposal and so it was never clear which fare option the public should focus on.

The public and the agency need to have good information and clear proposals or options to begin a dialogue. And both parties need to be willing to listen as well as talk.

This is where the governor becomes critical. Although the exact relationship between the MTA and Governor George Pataki is often murky, it is generally assumed that the MTA only does what the governor wants it to do, at least on major issues. How can the MTA engage in a worthwhile public hearing process if it has one ear cocked in the governor's direction?

THE PUBLIC MATTERS

Public participation is important in shaping the actions of public authorities. It can generate a wider range of options and a deeper understanding of the issues for both government officials and public participants.

Hearings can foster meaningful dialogue between government agencies and interested parties. One needs only to think about how public comments on the early designs for the World Trade Center site caused the Lower Manhattan Development Corporation and the Port Authority to revamp their plans. Even the MTA sharply cut back its plans for to close token booths based on public comment.

In my own experience with hearings on taxicab regulations (including the fare), public hearings acted as a vetting or testing process. The agency must have reasonable answers to the issues raised by interested parties. Did we think of everything? Is there another idea that we should consider?

Having to lay out your plans before smart people who have different interests and perspectives makes you think through an issue more carefully. This was shown in the discussions over the plans for the World Trade Center site.

More broadly, the hearing process drives home the idea to public employees that they work for the public and that the information they deal with should be part of the public debate.

So the short answer to the skeptics' questions are, yes, Virginia, this fare increase is here to stay. At most, there will be a temporary reprieve -- and don't count on even that.

Even so, Judge York's ruling is an important step toward creating meaningful public debate and dialog on the fare and other issues facing the MTA. Whether sustained or overturned on appeal, the judge's decision further bolsters the movement to hold the MTA accountable and supports those within the MTA who want to open up the authority's books and open up the process.

Bruce Schaller is Principal of Schaller Consulting, which provides research and analysis to government, business and non-profit groups seeking to identify and meet customer needs in the transportation sector. He is also a Visiting Scholar at the Center for Transportation Policy and Management at New York University.


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