Gotham Gazette https://www.gothamgazette.com/component/tags/tag/1055 Thu, 12 Dec 2019 05:56:31 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) What's The [DATA] Point? 275, with MTA Board Member Veronica Vanterpool https://www.gothamgazette.com/state/8944-whats-the-data-point-275-mta-board-veronica-vanterpool https://www.gothamgazette.com/state/8944-whats-the-data-point-275-mta-board-veronica-vanterpool whats the data point


What's The [Data] Point? Episode 85 -- 275, with MTA Board Member Veronica Vanterpool [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

veronica vanterpool 150Veronica Vanterpool, an outgoing MTA Board member appointed by Mayor de Blasio, joined the podcast to discuss her work in transit advocacy and on the MTA Board, key MTA-related issues, and more.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [DATA] Point? 275, with MTA Board Member Veronica Vanterpool Thu, 21 Nov 2019 05:00:00 +0000
MTA May Have Halted Subway Ridership Decline, But Gains Very Fragile https://www.gothamgazette.com/130-opinion/8914-mta-halted-subway-ridership-decline-but-gains-fragile https://www.gothamgazette.com/130-opinion/8914-mta-halted-subway-ridership-decline-but-gains-fragile mta phase 14

(photo: Marc A. Hermann/MTA New York City Transit)


The New York City Transit and Bus Committee of the MTA Board reported at its October 2019 meeting that weekday ridership of the subway grew 1.4% in September of this year compared to last, and that there have been four straight months of subway ridership gains. The MTA put out a gushing October press release that subway weekday ridership this September was up 4.5% over September 2018, and bus weekday ridership was up 1.5% over September 2018.* Revenue was up over forecasts as well.

The MTA attributed the improvement to the Subway Action Plan and a restoration of on-time performance to 82.7% in September 2019, compared to 69% a year prior. The Subway Action Plan invested heavily in operations and maintenance improvements like eliminating track fires, deploying emergency personnel, fixing signals and track, more rapid repairs, as well as other measures like increasing speeds on subway lines where speed limits had been imposed starting in the 1990s.

This is obviously good news since subway ridership peaked in 2015, stayed flat in 2016, and declined in 2017 and 2018. State Comptroller Tom DiNapoli’s office has estimated that the ridership decline is costing the MTA $250 million a year. Any revenue gains are welcome, especially to the extent that they reflect improved public confidence in the mass transit system.

Despite the recent improvement, MTA documents still acknowledged that average weekday ridership for all of New York City Transit (subways and buses) was still down 0.6% from the prior year-over-year (September 2017-September 2018, verus. September 2018-September 2019), so a recovery is actually just beginning.

But the subway ridership gain is especially fragile because the MTA is projecting deficits of $1.9 billion by 2023 before fare and toll hikes and its budget reduction and “transformation” plans are implemented, after which there is still a projected deficit in 2023 of $433 million.

Unfortunately these plans to address deficits include staff reductions of 3,000-4,000 jobs, including reductions of 2,300 jobs in operations and maintenance personnel at New York City Transit from the 2019 staffing peak related to the Subway Action Plan.

Below is a table taken from the Comptroller’s report using the MTA’s projections.

mta staffing levels

It is uncertain how the MTA will preserve the on-time performance and ridership gains while cutting 2,300 operations and maintenance personnel. 

Projecting the revenue gains from the September ridership increases would yield another $100 million for the MTA in 2020, perhaps higher by 2023. This is just back-of-the-envelope math, but the potential of retaining, regaining, or gaining more riders is there and that’s why personnel cuts of such magnitude are problematic.

The MTA is also hiring 500 more police officers, at an estimated cost of $50 million a year, for various public safety and fare evasion deterrence purposes, without booking any more revenue from the fare evasion deterrence. The agency says fare evasion now costs it $260 million a year. The MTA has yet to provide any metrics or a clear plan for how the extra cops will be worth the cost, but I would still give the extra cops the benefit of the doubt at a minimum at deterring crime. The MTA owes the public a better explanation for what benefits the new officers will offer.

Even a revenue gain of $100-$200 million a year from improved ridership won’t be a miracle for the MTA when it faces deficits of $1.9 billion a year, with $433 million still left after implementing current plans by 2023.

When the Legislature provided funding for the Subway Action Plan and the new congestion pricing and various tax hikes for the 2020-2024 MTA Capital Plan, it left the MTA little extra room to address its deficits. The Action Plan funded staff-ups for service improvement, most of which need to be sustained (and the money spent). Congestion pricing and the other new revenue is prohibited from being used for operating deficits. Essentially Governor Cuomo and the Legislature left the MTA stranded and needing to find a way internally to cope with its deficits, which involve a mismatch between revenue, including its farebox and dedicated taxes, growing at 1% a year, and its costs, growing at 3% a year, mostly debt service costs and health insurance.

With the Legislature up for election next year, tax increases are unlikely. But there are still large sums of money unspent in the Dedicated Infrastructure Reserves set up from the Financial Settlements over the past years. Just giving the MTA $150 million from the reserves next year to preserve operations and maintenance services (and the ridership gains), to New York City Transit and commuter rail, would give the MTA more time to continue the gains of the past year and find efficiencies without harming service.

In 2021, the Legislature could look at some modest new sources of revenue, like the for-hire-vehicle surcharges, or substituting some sources of revenue for the MTA with others that more closely correlate with economic growth.

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Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

*The MTA notes its ridership numbers may be subject to future revision.

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MTA May Have Halted Subway Ridership Decline, But Gains Very Fragile Sun, 10 Nov 2019 05:00:00 +0000
Max & Murphy Podcast: The MTA's New $52 Billion Plan to Save the Subways & More https://www.gothamgazette.com/state/8813-max-murphy-podcast-the-mta-s-new-55-billion-plan-to-save-the-subways-more https://www.gothamgazette.com/state/8813-max-murphy-podcast-the-mta-s-new-55-billion-plan-to-save-the-subways-more 23 mta 600

(photo: Patrick J. Cashin/Metropolitan Transportation Authority)


September 25, 2019 - Max & Murphy Podcast: The MTA's New $52 Billion Plan to Save the Subways & More

nicole gelinas wbaiThe MTA Board just passed a new five-year, $51.5 billion capital plan largely aimed at upgrading the New York City subways. Nicole Gelinas of the Manhattan Institute joined the show to discuss the new capital plan and share her thoughts on its structure, its positives and negatives, and what comes next.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

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by Ben Max, Gotham Gazette
     

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Max & Murphy Podcast: The MTA's New $52 Billion Plan to Save the Subways & More Wed, 25 Sep 2019 04:00:00 +0000
The MTA Needs a Real Capital Plan, Not Unrealistic Promises https://www.gothamgazette.com/130-opinion/8799-the-mta-needs-a-real-capital-plan-not-unrealistic-promises https://www.gothamgazette.com/130-opinion/8799-the-mta-needs-a-real-capital-plan-not-unrealistic-promises gov mta transit

(photo: Don Pollard/Governor's Office)


On Monday, the Metropolitan Transportation Authority (MTA) released an 11-page slideshow “overview” partially summarizing the details of its nearly $55 billion 2020-2024 capital plan. The unveiling seemed like Christmas morning - according to MTA CEO/Chair Pat Foye, the plan will sell itself. Everyone will get the pony that they asked for. NYCT President Andy Byford was “ecstatically happy” and elected officials and advocates were told they’d get their top priorities, ranging from costly expansion projects to new subway and commuter rail cars, buses, signals, and elevators. 

Who wouldn’t want a huge infusion of funds into a century old, workworn transit system? We too want to believe! Unfortunately, the numbers just do not add up.

We question both the availability of the funding coming in and the ability of the MTA to spend this massive outlay. Historically, transit advocacy has centered on finding funds, but last year we started looking at actual expenses -- not “commitments” or authorizations to spend, as the MTA does. We found that the real constraint on MTA capital plans has become the ability to spend, not finding funding. (A related problem is keeping costs down so that what can be spent is done so efficiently.)

This plan is really Governor Cuomo’s. He controls the MTA, as described in great detail in our OpenMTA report. There are a few reasons we think his $55 billion “five-year” plan is not tethered to reality. While the Governor’s plan shows that he wants the MTA to spend  70% more on its 2020-2024, the MTA’s capacity to spend that much will not grow nearly as quickly.

In 2018, the MTA spent a record $6.6 billion on capital projects. However, only $4 billion of that was for current projects -- the other $2.6 billion was to complete projects from previous plans.

For about two decades the MTA has gotten further and further behind spending its capital funding. As a result, there is a growing hangover of past-year projects that must be completed every year. We estimate there will be at least $20 billion worth of 2015-2019 projects for the MTA to finish during the 2020-2024 plan.

Let’s assume the MTA can keep capital spending at the record pace of $6.6 billion a year. If it finishes the 2015-2019 plan in five more years, spending an average of $4 billion of the $20 billion per year, it leaves only $2.6 billion a year for 2020-2024 projects. And wait, the MTA still hasn’t finished the 2005-2009 or 2010-2014 plans. Clearly, something is off here. 

We believe that projects that will not be built for at least a decade are more aspirational than real. By promising everything to everyone, the Governor is actually making it impossible to know which projects are real and which are not.

Given what was released this week is still technically a draft (and we’ve still only seen an outline, not a full plan) that must be approved by the MTA Board and Capital Program Review Board (CPRB), there is still time for the MTA to release a real implementation plan showing how it intends to finish this new plan along with all its current projects.

How Much Can the MTA Really Spend On a Five-Year Plan During the Plan?
Bluntly, we think it will be difficult for the MTA to spend even half of the $55 billion proposed for the 2020-2024 plan during that five-year period. MTA capital plans often taking more than 10 years to be completed. While this is not a new challenge, a capital program of nearly $55 billion is unprecedented and presents a good opportunity to figure out how to fix this ongoing structural MTA problem.

The MTA’s ability to spend capital dollars during plan years has decreased, not increased. In 2018, the MTA spent $6.6 billion on capital projects, but only $4 billion was for 2015-2019 projects. The MTA’s best-ever year for spending on projects from the current capital plan was in 2009, when it spent nearly $4.5 billion (see chart below). 

reinvent albany ex

With the 2015-2019 plan’s late start in 2016, there is a lot of work still left to do on that plan. The 2015-2019 plan has $33 billion worth of projects, but the MTA has only received $12 billion in funds as of June 31 of this year, and as of the end of 2018, only $20 billion worth of projects were committed. (A commitment is not the same as actually spending the money, it is the intent to use employees to complete a project or execution of a contract). 

Can the MTA effectively manage more than $6.6 billion a year total in capital spending?

Given the MTA’s limited spending capacity, questions about the credibility of delivering a nearly $55 billion capital plan are warranted. With the recently-approved MTA reorganization, consolidating capital construction staff to headquarters will mean that the MTA will have to do even more with even less. Whether centralization will indeed lead to meaningful efficiencies will take time to determine.

Even if we give the MTA the benefit of the doubt and it does as well as it has in the past, getting $4.5 billion out the door every year, it will take 12 years to finish the 2020-2024 plan. This is all while it has a lot more to do on the current, 2015-2019 plan.

Given the limited ability to manage projects, what will the MTA prioritize?

The slideshow proposes what would be the largest investment in signals for MTA New York City Transit ever, at $7.1 billion. This comes with other large investments for elevators and subway cars, all while large expansion projects are continuing, such as East Side Access and LIRR Third Track.

With limited spending and staff capacity, the MTA will have to choose which projects come first and which come last. Janno Lieber, the MTA’s head of capital construction, has said that signals will come in the five-year window, but as of now, the MTA has not released an implementation plan or detailed project list with schedules of when it will commit to projects, as it has shown in prior plans.

Revenue Dependent on New Federal, State and City Fundings
The nearly $55 billion plan outline makes a number of big assumptions about funding that has not yet been secured. New funding is supposed to come from the federal government ($10.7 billion), the state government ($3 billion), and city government ($3 billion), totalling nearly $17 billion. These numbers are not real until the cash actually arrives from all parties involved.

Is it realistic to expect $10 billion in federal aid?

Under a Democratic president, the federal government contributed $7 billion to the last capital plan. This plan assumes even more federal dollars will come in, including a large contribution for Second Avenue Subway Phase 2: $2.9 billion alone. The feds provided $1.3 billion for Phase 1, so this would double that contribution to this project. While the President indicated support for the project via Twitter, a tweet is not a funding commitment of $2.9 billion.

Is it realistic to expect the state to provide $3 billion in direct aid?

While Governor Cuomo has said the state will provide $3 billion to the new plan, this is subject to legislative approval. The proposal of the Mayor’s match of $3 billion is also under review. Meanwhile, the state still owes $7.3 billion to the MTA for the 2015-2019 plan: it had pledged $8.3 billion in 2016 and only $1 billion has come in so far. 

State Comptroller  Tom DiNapoli, in his recent report on the MTA’s finances, noted that the remaining $7.3 billion will not start to come in until next fiscal year (beginning April 2020). The state also may not provide this as direct aid. It could authorize the MTA to issue its own bonds based on existing or new revenue, meaning that the impact on the MTA and taxpayers is still unknown.

Debt Service and the Operating Budget Crisis
Beyond the MTA’s huge capital needs, it already doesn’t have enough money to pay for the costs of running the system everyday. This is due in large part to debt service payments on previous capital plans. Debt service payments eat up 17% of the MTA’s operating budget now, and the MTA faces even larger out-year deficits. 

Even without new borrowing, the MTA forecasts that its debt will increase 31% by 2023 and will cost more than $3.5 billion a year. A hiring freeze and cuts to staff such as subway car cleaners have meant that MTA workforce morale is low, while customers are increasingly unhappy with the quality of service. And “service guideline” cuts are on the horizon for this fall. 

Will riders endure even more cuts as a result of this plan?

The operating deficit is already significant, and the MTA’s 2020-2024 capital plan outline assumes the MTA will pay for part of the plan with $10 billion in new debt. How much this debt will increase the MTA’s debt service payments, and therefore its operating deficit has not yet been explained to the public. This information is needed to understand exactly what impact the capital plan will have on the MTA’s ability to actually deliver service for its riders, its primary objective.

Real Transparency is Honesty
Reinvent Albany and our colleagues last week announced the Build Trust campaign, asking the MTA to release an implementation plan to show exactly how it will deliver on its promises, and provided a blueprint for better transparency and cost control.  To us, transparency is not merely about putting more data online, but presenting real, honest information to the public.

To comply with state law, the MTA will have to hold a vote on the complete draft capital plan at its September 25 board meeting. As soon as the MTA Board receives the actual capital plan, it is required to be put it online where the public can see it. Yet with less than a week remaining before a Board vote on the $55 billion spending plan, the MTA has not released two important things: (1) the “20 Years Needs Assessment” with a detailed analysis of how much money is needed to repair the system and (2) the full, detailed list of capital projects in the proposed capital plan, with a detailed implementation plan.  

When will the MTA release its 20-year needs assessment and federal TAM plan?

In theory, the MTA is supposed to follow a logical process to determine how much it needs to spend restoring the transit system.

First, the MTA is supposed to compile an inventory of its equipment and infrastructure, including the condition of its assets, and then it is supposed to compile its needs assessment of how much it will cost to repair the system so it can provide good service.

The inventory of its equipment is part of a new federal requirement called the Transit Asset Management or “TAM” plan. The needs assessment has taken the form of a 20-year needs assessment, last released in October 2013 for the last plan. Neither of these documents is publicly available for the next plan.

Without a 20-year needs assessment, or the underlying data about its assets, the public cannot know how much the MTA should be spending to replace very old, but crucial, subway and rail components, like decades old mechanical switches, electrical systems, pumps and fans. (See Reinvent Albany’s report on the MTA capital plan process.)

Decisions on capital spending don’t have to be political - they should be based on real data that takes the subjectivity out of the process. 

When will the MTA release its full capital plan, with an implementation plan?

The MTA’s 11-page slideshow does not differentiate between “core” repairs versus expansion projects, lumps together costs over multiple plans, omits large capital projects, and provides no implementation schedules. This is troublesome and again raises questions about the MTA’s commitment to public transparency. 

Project lists from prior capital plans have tallied more than 60 pages, itemized and coded by type of project. This allows the public to see exactly how the plan breaks out, such as how many fixes to broken equipment there are versus spending that may be more cosmetic, like the last plan’s Enhanced Station Initiative.

Expansion projects are usually expensive, representing an opportunity cost for fixes that don’t involve ribbon cuttings but are crucial like new power stations needed to run additional trains.

These lists have also included project commitment schedules, showing when the MTA intends to commit to projects (again, not spend) during the five-year window. This is the basis for developing a real implementation plan, and should be expanded upon by the MTA as recommended by the Build Trust campaign.

Before the new MTA capital plan is final, the public and stakeholders like the State Legislature -- which should hold hearings this fall before the plan is approved by the CPRB -- need a lot more detail than 11 pages to fully buy in. It is the public’s money after all, and members of the public deserve to be treated like investors who have been given a real, honest plan before staking their own money on the MTA’s future.

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Rachael Fauss and John Kaehny are, respectively, senior research analyst and executive director of Reinvent Albany. On Twitter @ReinventAlbany.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The MTA Needs a Real Capital Plan, Not Unrealistic Promises Wed, 18 Sep 2019 04:00:00 +0000
The State’s $7 Billion MTA IOU Comes Due https://www.gothamgazette.com/130-opinion/8766-the-state-s-7-billion-mta-iou-comes-due https://www.gothamgazette.com/130-opinion/8766-the-state-s-7-billion-mta-iou-comes-due govcuomoprogre

(photo: the governor's office)


MTA officials acknowledged at their June 2019 board meetings that the agency is borrowing money to be repaid through a New York State law that promised to have the State of New York provide the MTA $7.3 billion once the authority had exhausted its own funds on spending for the current five-year capital program.

The 2016 state law was merely an “IOU," there had been no specific source of funds identified for how the state would pay the money, nor has there been any plan developed since enactment in the state budget that year.

The state's total commitment was $8.6 billion, including some new capital funds it added as part of the newer Subway Action Plan and other promises, which to date have provided about $1 billion in actual funds. It is the $7.3 billion IOU that is still outstanding. New York City was also required to provide $2.7 billion to the agency as part of a mutual obligation with the state. The city has provided about $800 million to date.

These commitments refer to the current 2015-2019 Capital Construction Program, not the 2020-2024 Program to be released in a few weeks by the MTA. That new program, not yet adopted, will have its main funding coming from the congestion pricing system passed earlier this year, with revenue from the tolls scheduled to begin in 2021.

The elements of the 2015-2019 MTA Capital Program were patched together in the 2016-2017 state budget (a year late), my final year in the State Assembly while I was still chair of the Assembly Committee on Corporations, Authorities, and Commissions. The full 2016 package that became the Capital Program was about $30 billion; some $3 billion has been added since I retired. The MTA Capital Program Review Board adopted the plan in 2016 shortly after the budget was enacted.

The question of the state’s outstanding commitment to the MTA capital program, written into the law as the last dollars to be spent in the overall plan, has been the source of limited scrutiny, but is now in the spotlight as the IOU comes due and the next capital program is designed.

At the June 26 public meeting of the MTA Board Finance Committee, finance chair Larry Schwartz and board member Veronica Vanterpool expressed concerns about an agenda item authorizing the MTA to borrow an extra $2 billion to fund the capital program.

Per the minutes of that MTA Finance Committee meeting (page 12):

"Ms. Vanterpool voiced her reservations about increasing the amount, noting that there is that $7.3 billion commitment from the State that has not been received, as well as the commitment from the City. Mr. Foran [the MTA's Chief Financial Officer]... noted that the commitment from the State is predicated on MTA to spend MTA dollars first and that MTA is already beginning to commit against the State's portion (about $2 billion commitment, with some expenditures already incurred) and the State has agreed to that.”

The discussion continued (page 13), "Mr. McCoy [MTA Finance Director] commented that regarding the State funding, the $1.2 billion in BANs [bond anticipation notes] were issued in two components; $1 billion for MTA funded projects, and $200 million is designated for the projects under the State Commitment. Mr. McCoy stated that it was clearly communicated with the State that, when the notes are due, the State will need to provide the funding."

The MTA Board proceeded to add the $2 billion in new borrowing at its main June 26 board meeting two days after this finance committee discussion. State Comptroller Thomas DiNapoli, in an August 7 report on New York City's financial condition, stated (on page 34), "According to the MTA, it has committed all of its capital resources and has begun to commit up to $3 billion against the State's obligation. Consequently, the MTA will require funding from the State beginning next State fiscal year (2020-21) to cover the cash cost of these capital commitments"

Where Will The Money Come From?
The question now is: How will the state meet this new commitment in the coming budget?

The state has the option of itself providing the MTA the money directly, or creating a stream of funding for the MTA to enable the agency to secure the borrowing of the funds, or some combination thereof. But there are serious challenges, the first of which is that 2020 is an election year for the state Legislature.

To enable the MTA to borrow $7.3 billion, a revenue source, i.e. another tax, would need to provide the authority about another $400 million a year. Does the Legislature want to do another tax increase in an election year? Maybe 2021, not 2020. Seven of the eight new Democratic State Senators that won the Democratic party the majority come from the New York City suburbs. Four of these seven suburban races were super-close, with the Democrats winning by just 2-3 percentage points, or even less.

Several other races were won by less than ten points. Many of these newly-minted legislators could be uncomfortable voting for another tax increase for the unpopular MTA, after voting this year for congestion pricing, a real estate transfer tax surcharge, and internet sales taxes. They are already likely to face Republican attacks in the election for these votes.

The state's ability to borrow the funds directly (the MTA does not need all $7.3 billion next year, but over several years) is also severely constrained by limits on the state government established by the Debt Reform Act of 2000. This law limits state-supported debt to 4% of the state's total personal income from the preceding calendar year. The following chart from a July 2 state comptroller report on the 2019-2020 budget shows how the state's capacity to borrow is dwindling.

divisionbudget chart

Next year the state's ability to borrow funds in support of the entire state budget and the entire capital program will be limited to about $1.36 billion and by 2023-24 will be nonexistent. Borrowing for the MTA would be competing with roads and bridges, water and sewer, the state and city public university systems, mental hygiene, and the environment. Little could be anticipated from this source given the constraints.

Another possibility would be for the state to provide the MTA money from the financial industry settlement windfall. Some $2.6 billion is available in 2020-21 from this source, but, once again, the MTA would be competing with upstate economic development commitments, Javits Center and transportation commitments, and general budget relief. But Governor Cuomo and the Legislature could make several hundred million dollars available from this source -- once again, very limited, given the competition for other funds.

Of course, the Legislature could do a tax/fee hike in 2021, even something as simple as extending the for-hire vehicle surcharge on Uber and Lyft to trips with outer borough destinations or adding to the Manhattan business district price. But it is a tax increase of sorts.

Late in the 2015 legislative session, as we struggled to deal with funding the 2015-2019 MTA Capital Program, I worked with MTA senior officials to introduce legislation to provide the MTA a new source of money without a tax increase. The bill provided for a staggered diversion of existing personal income tax revenue from the MTA region over a four-year period to enable the MTA to borrow what was viewed then as $6-7 billion, providing about $400 million a year in revenue to which the agency would be entitled at the end of four years.

Growth in the state's personal income tax revenue would now bring in about $500 million a year under the formula in the bill (A. 8227-a from the 2015-2016 session), so the percentage amount in the old bill could be shaved.

The critical concept of the bill was that it statutorily entitled the MTA to the revenue, enabling it to borrow the money itself and not be a debt of the state subject to the Debt Reform Act and the limits on the state’s capacity to borrow. As written, it would start in the first year with a small three-tenths of one-percent diversion of PIT revenue in the region to the MTA , reaching 1.2% in the fourth year. Each year's revenue piece was separated in a schedule pursuant to law, so if a recession hit, the state could suspend the following year's diversion and preserve revenue in the general fund.

The governor and the Legislature should continue to examine this concept, which was believed to be workable by MTA officials at the time, though viewed by senior Assembly Ways and Means staff as just not needed. But the $7 billion IOU has come due.

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Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The State’s $7 Billion MTA IOU Comes Due Thu, 29 Aug 2019 04:00:00 +0000
‘Breaking Car Culture’ in New York City Likely Dependent on Expanded Mass Transit https://www.gothamgazette.com/city/8732-breaking-car-culture-in-new-york-city-likely-dependent-on-expanded-mass-transit https://www.gothamgazette.com/city/8732-breaking-car-culture-in-new-york-city-likely-dependent-on-expanded-mass-transit subway construction

(photo: City Council)


If City Council Speaker Corey Johnson, like-minded lawmakers, and a chorus of transit advocates get their way, New York City will become far less dominated by cars over the next few years.

Talk of “breaking car culture” by increasing options and protections for bikes, buses, and pedestrians while reducing how use of public space and rules of the road favor cars has increased, spurred largely by well-organized activists and Johnson. The speaker has championed the phrase, credited to Council Member Antonio Reynoso, that now symbolizes a growing movement, and introduced legislation to create a “master plan for city streets” with many more bike lanes, bus lanes, and pedestrian plazas required.

But as Johnson has pushed a public transit agenda and breaking the car culture that he and others say unfairly and dangerously dominates New York City, they’ve been met with a few refrains, one of which is that you can only push so many New Yorkers out of their cars without significantly expanding public transit options across the five boroughs, especially in areas currently unserved by the subway. (That thinking also extends to areas without good bike lane networking and access to Citi Bike bike-sharing or to speedy and reliable bus service.) More than one-third of New York City's 8.5 million residents live more than one-third of a mile from a subway stop, according to the Regional Plan Association. 

People will not leave their cars, or abandon the use of for-hire vehicles like Uber and Lyft, without a more robust public transit ecosystem. That challenge is on top of that of making sure that the subways and buses perform well where they already provide extensive options, and installing more bike lanes and pedestrian options in those areas, not to mention the coming influx of electric scooters, recently legalized in New York State.

Despite ongoing, launched, or expected improvements to the subways and buses, many of which are included in the up-in-the-air MTA "Fast Forward" plan to modernize public transit over 10 years, many of the city’s neighborhoods will still be inaccessible by public transportation.

The notion of adding to the city’s current mass transit system has been around a long time, of course, with recent manifestations in the opening of the first phase of the Upper East Side's Second Avenue Subway, the extension of the 7 line to the far west side of Manhattan, and Mayor Bill de Blasio’s Ferry NYC system and planned Brooklyn-Queens Connector (BQX) streetcar along the two boroughs’ waterfront.

There have also been a variety of ideas put on the table for additional subway stops, new rail lines, and other enhancements to the grid -- including light-rail reinvigorating abandoned train tracks in Brooklyn and Queens, a train shuttle from a central point in Manhattan to each of the city’s airports, a revamped tristate commuter rail, and more.

“We know our transportation infrastructure is woefully inadequate for our current needs, let alone for future population growth and the challenges that will come with climate change,” Johnson said in a statement to Gotham Gazette, when asked about the relationship between breaking the car culture and building out the transit network.

Defending the large subsidies involved in his signature ferry system, de Blasio in March said that the prospering and growing city needs more mass transit.

“8.6 million people today,” he said on WNYC’s The Brian Lehrer Show. “We’ve added half a million people over the last 15-20 years. We’re going to add another half million people over the next 15 to 20 years ahead. Anyone who thinks our existing transit system can handle all of that is someone who thinks marijuana is already been legalized in New York State and is smoking some. The fact is it is impossible to do what we have to do with the city if we don’t expand mass transit options.”

He continued: “So we have had a four-pronged attack. More bike options; more select bus service, which is those faster dedicated bus routes; more light rail, that’s going to be the BQX, Brooklyn and Queens; and for the first time ever, a citywide ferry system.”

“We’re investing in the future,” de Blasio said. It is worth noting that the ferry system is projected to carry about 9 million annual riders, according to the mayor in May, which is less than two days of typical weekday subway ridership.

For her part, de Blasio’s Department of Transportation Commissioner, Polly Trottenberg, also spoke earlier this year about the need to improve transit options to account for the city’s success and growth.

“Given the growth and economic dynamism of New York City, we should be opening three subway stops every year...if not faster,” she said in an interview with Gotham Gazette. “The biggest transportation challenge the city faces right now is we have stopped building out our subway network. That gets into a bigger discussion of the MTA, of the governance, of the funding challenges there.”

“Nothing carries people like subways,” Trottenberg said.

The MTA doesn’t “have the funds right now to be in the subway line-building game -- and we should get them back in that game” like big cities in other countries, she said.

Proposals and Plans to Expand Public Transit
In its enormous “Fourth Regional Plan” for the tri-state region released in 2017, the Regional Plan association calls for a massive extension of the subway and rail system in and around New York City. This includes bridging unconnected or underconnected areas of the city to each other, adding new subway stops in "high density and low income neighborhoods," and expanding rail options into areas of the city that are "transit deserts."

"Building new subway lines or line extensions in the South Bronx, southeast Brooklyn. and eastern Queens would reduce travel times and fully connect these communities to the city’s transit system—and thereby job opportunities," the RPA plan reads. Too many New Yorkers simply don't have access to the subway system, the association says, particularly "in Queens, where fewer than four in 10 residents can walk to the subway," meaning a distance of one-third of a mile or less from home.

Hiding behind trees and below street level are 24 miles of abandoned railway tracks stretching from Sunset Park in Brooklyn to Co-op City in the Bronx. A proposal by the RPA would see the conversion of those tracks to a functioning commuter rail, covering 80 square miles and intersecting with 17 subway lines.

RPA estimates the line would serve upwards of 100,000 people a day, and cost under $2 billion to make usable. (Phase one of the Second Avenue subway extension, completed in January 2017, was estimated to cost nearly $4.5 billion.)

The so-called “triboro line” that would include Brooklyn, Queens, and the Bronx could be implemented at a lower cost because the right of way and tracks are already in place, RPA Senior Vice President for State Programs & Advocacy Kate Slevin said in an interview with Gotham Gazette. The line would bring benefits to the outer boroughs, where 50 percent of the city’s job growth has occurred in the last 15 years, according to the RPA proposal. Transit advocates, business owners and employees, elected officials and others regularly point out that the city’s recent economic and residential patterns do not match well with its Manhattan-centric public transit network.

Along with new rail options where they don't exist, the RPA also calls for things like extending the 7 line from the new far west side 34th Street stop down the west side into "underserved areas of Chelsea and Meatpacking."

The RPA plan notes that nearly 60 percent of residents of the Bronx and Brooklyn, and 36 percent of residents of Queens, do not own a car.

“I don’t think cars will be going away anytime soon but if you’re a growing city you only have a certain amount of street space to work with,” Slevin said. “New York needs to be moving at a faster clip to prioritize high efficiency transportation options.”

RPA also envisions a re-worked commuter rail system, with a united NJ Transit, Metro North, and LIRR, entitled Trans-Regional Express (T-REX). Rather than having each entity individually operate to and from Manhattan, T-REX would see the introduction of new freight-rail corridors directly connecting each of the regions currently serviced by commuter rail, Slevin said. The plan aims to increase ridership by 1 million by 2040.

“This is not just a system to bring people from the suburbs to Manhattan,” Slevin said. The plan would bring “paramount benefits in the city and smaller cities outside the five boroughs that have not benefited the same way Manhattan has,” she said.

A revamped commuter rail system has the potential to influence “car culture” not only in the city, but also in the suburbs, said Sarah Kaufman, Associate Director of NYU’s Rudin Center for Transportation.

“Additional tracks that would provide more frequent service and that would include allowing people in the farther reaches of the city to use commuter rail as an alternative to the subway” would have an impact, Kaufman said.

“A well-functioning public transportation system is key to reducing reliance on cars,” said Julie Tighe, President of the New York League of Conservation Voters, at a recent Riders Alliance rally to call on the MTA to ensure that its next five-year capital plan focuses on fixing the subways.

Perhaps as a harbinger of RPA’s vision, in 2023 the MTA will begin construction on East Side Access, an eight track terminal and concourse for LIRR trains at Grand Central Station. Penn Station is currently the only Manhattan stop on the LIRR. Another plan, entitled Penn Station Access, would bring Metro North trains to Penn Station in addition to Grand Central, where they currently stop.

“I’m hopeful that East Side Access and Metro North access to Penn Station will help influence people who may otherwise feel like they don’t have a choice but to drive,” Kaufman said.

Many of these plans are just and only that - without support from elected officials.

Another factor in upcoming decisions is the imminent implementation of congestion pricing, which will charge drivers a fee for entering Manhattan below 61st Street. Like with calls to “break the car culture,” congestion pricing led to pushback from some saying that better mass transit is needed in conjunction.

De Blasio announced a plan for the BQX streetcar during his 2016 State of the City speech, but the proposal has been criticized from the start for mostly replicating the G subway line and existing bus routes, especially given de Blasio’s minimal attention to the subways and buses for most of his time as mayor (he’s recently paid more mind to the buses, which he has more control over based on city control of the streets).

It has also been seen as more of a boon to real estate interests than the riding public, though some potential riders have expressed excitement about a new way to move between certain neighborhoods, especially as residential and commercial growth in Queens and Brooklyn have grown.

Unlike when it was first announced, the BQX plan is now said to require significant federal funding in order to move toward completion, though interim steps are being taken by the city. Its fate is unclear.

“Speaker Johnson is open to creative ideas on how to improve our transportation network,” said Jennifer Fermino, Speaker Johnson’s communications director, in a statement to Gotham Gazette following a Council hearing on the proposed BQX earlier this year. Sentiment among Council members appears mixed, and Johnson appears to be holding out on giving an opinion.

MTA Efforts
This fall the MTA will put out its new five-year capital plan, which will set the organization’s construction and major upgrade project agenda for 2020 through 2024. It is unlikely to include any new expansion plans for the subway system, but is expected to focus heavily on upgrading the existing tracks, signals, cars, and stations -- including by increasingly accessibility for those living with disabilities -- all of which should help to encourage more people to take public mass transit over cars.

The MTA did announce in April a new phase of the stalled study of transportation along the Utica Avenue corridor in Brooklyn. While the study, performed jointly by the MTA and city DOT, will examine a variety of transit aspects, including bus service, it will also look at “extending the existing subway on Eastern Parkway or Fulton Street south along Utica Avenue. The extension could be either underground or as an elevated rail line.”

It’s unclear where the second phase of the Second Avenue Subway will factor into the new MTA capital plan.

Advocates are encouraging the MTA to adopt accessibility as a key issue, which could reduce some reliance on cars. According to the Elevator Action Group at Rise and Resist, the MTA counts 118 of its 472, or 25 percent, of its subway stations as accessible, while the MTA counts 118 of its 472 stations as accessible. “The lack of elevator accessibility continues to deny access to disabled New Yorkers and elderly,” Assemblymember Deborah Glick said at the Riders Alliance rally.

The MTA already has a bus route redesign process underway, having completed Staten Island and working on the Bronx, to be followed by other boroughs. Modernizing bus routes, along with other efforts like installing more dedicated bus lanes (which is more under the purview of New York City government), is aimed at improving the city’s terribly slow bus speeds and reversing the trend of dipping bus ridership.

When earlier this year he announced a crackdown on illegal parking in bus lanes in order to get the city’s buses moving more quickly, de Blasio got at the heart of the matter with regard to the current system that does exist, but needs to perform better.

“So for drivers – help your fellow New Yorkers by not parking in the bus lanes, and with this effort to speed up the buses, more and more New Yorkers will be able to choose mass transit and they can get out of their cars and that's going to take cars off the road and reduce congestion also,” the mayor said in January. “So we could have a virtuous circle here if we get it right. That's what we intend to do.”

Some city officials want to figure out ways to work with the MTA to expand the subway system to add new stops and lines. The MTA recently adopted a “transformation plan” with goals including to improve service across the different branches of the authority and to bring construction costs down. For now, de Blasio has announced several new bus-related plans, a large Citi Bike expansion, and additional planned stops for the ferry program, though he does not seem particularly interested in a major cultural shift or pursuing an expansion of railway possibilities; and he has done little about parking placard abuse by public employees despite multiple announcements saying the city is cracking down on the practice. Parking in general has become a key issue within the street-use reform converation, and whether the city devotes too much public space allowing people to store their cars, and to do so free of charge in many places throughout the five boroughs. Johnson and Trottenberg are among those who've said there are too many parking spots in New York City.

Speaker Johnson is looking to move ahead with his "master plan" legislation that would attempt to shift the balance of power on city streets by devoting more space to bus riders, bicyclists, and pedestrians.

Johnson and others have pushed for municipal control of the MTA, in part as a way to get those astronomical construction costs under control. Until then, no major additions will be possible, Johnson said in a statement to Gotham Gazette.

“Adding a single mile of subway track in New York City costs the same as sending a rover to Mars,” Johnson said in the statement. “Meaningful mass transit expansion is not happening until we get in line with rest of the world and bring down costs. That won’t happen without real accountability and it’s clear it certainly won’t happen with the subway until we have municipal control.”

[Read: Corey Johnson Wants to 'Break the Car Culture' in New York City. What Does That Mean?]

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by Noah Berman, Gotham Gazette

Read more by this writer.

Ben Max contributed to this article.

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‘Breaking Car Culture’ in New York City Likely Dependent on Expanded Mass Transit Sun, 11 Aug 2019 04:00:00 +0000
Governor Gets What He Wants at the MTA; Now It's Time to Deliver https://www.gothamgazette.com/130-opinion/8637-governor-gets-what-he-wants-at-the-mta-now-it-s-time-to-deliver https://www.gothamgazette.com/130-opinion/8637-governor-gets-what-he-wants-at-the-mta-now-it-s-time-to-deliver oped gov cuomo

Gov. Cuomo on the subway (photo: the governor's office)


At the end of the state legislative session that just finished several steps were taken to consolidate Governor Cuomo’s power over the MTA. First, he swapped out two of his ‘independent’ appointees to the MTA Board for two members of his state cabinet, Robert Mujica, his budget director, and Linda Lacewell, commissioner of the Department of Financial Services.

Second, in order to legitimize the board appointment of someone who is not a resident of the MTA region, the law was changed to provide that the state budget director, regardless of residence, may serve on the board ex-officio.

Finally, a new law was passed requiring the appointment within six weeks of a “transformation director” to report directly to the MTA Board to implement the reorganization plan that was required by the budget bills passed in early April and is expected to be prepared and submitted by June 30.

These actions have been criticized by respected transit analysts, (see here and here), largely on the grounds that the governor is creating conflicts of interest by placing his own full-time employees on a board that is supposed to be independent and that he is undermining the governance of the MTA by creating new positions outside the existing chain of command.

These are valid concerns; however, for those who have bemoaned Governor Cuomo’s past ambivalence about his responsibility for the transit system, the actions have a significant upside: they establish clearly and beyond any doubt that the Governor of the State is the ultimate authority and decision-maker with regard to the MTA. And this governor has now taken ownership of it in a clear and unequivocal way.

I know Rob Mujica; he is one of the most competent people I have worked with in government. I have no reason to think that Linda Lacewell is any less capable.

They both bring a great deal of management experience and knowledge of public finance to their new roles as MTA board members. Yes, they will have to navigate their loyalty to Governor Cuomo and their fiduciary duty to the MTA; there may be issues on which one or both of them will need to recuse themselves. But for the most part, their other roles should complement and enhance their value as board members.

In fact, it may be a good idea to designate the state budget director as an ex-officio member of the MTA Board – and the city budget director as well, for that matter. Both governments have significant control over resources that are and/or should be devoted to the MTA, particularly with regard to its capital spending.

On the other hand, it is certainly unusual and probably not optimal to specify that a particular staff line at the MTA, i.e. a new Transformation Director, report directly to the Board and not to the CEO.
Consolidation of services has long been a favorite topic of Governor Cuomo and it makes sense that redundant departments among MTA divisions (NYCT, LIRR, MetroNorth, and TBTA) be combined. But reorganization of those agencies will not fundamentally change the MTA’s financial picture; more concerning than the new hire is raising unrealistic expectations about what “transformation” will accomplish.

In any event, Governor Cuomo, with the assistance of the state Legislature, has solidified his control, and it is long past time for him to move on from bashing the organization to creating and supporting useful change. He should take responsibility for:

1. Release of a new 20-year needs assessment that shows the full cost of getting every single piece of MTA infrastructure to a state of good repair. The last assessment was issued in 2013 and another is required by law in 2020. We cannot pay for everything at once, and there may be some items on the wish list we can never pursue, but we must see what all the needs are so that the public can provide input and the MTA Board can decide what needs to be prioritized.

2. Release of a five-year capital plan. The current plan covers 2014-19 and another is expected by October, for 2020-2024. Estimates of the cost of a complete plan for the MTA’s next five years range from $40-60 billion. Let’s see what the authority has decided to prioritize and how it is going to be paid for. Of course, money should not be wasted; but don’t skimp on this, the most important infrastructure in the state. In the past, the governor and his representatives have pressured the MTA to reduce its “bloated” capital plan, only to later agree to increases because of the urgency of the needs. Will Mujica and Lacewell support the full amount the MTA needs or try to protect the Governor from having to come up with more revenue by arguing for less?

3. Making it clear that the commitment to contribute $8 billion in state dollars to the current five-year capital plan will be honored, and specify what projects it will fund. All the projects in the current plan have not been completed; large projects are almost never fully achieved within a single five-year capital plan because construction commitments take time. But this money should not be allowed to disappear or be rolled over to fund the next five-year plan.

4. Focusing most of the money, time, and attention on getting the current transit system to operate effectively and safely, not on shiny new projects that lend themselves to ribbon cuttings but don’t improve travel times and experiences for most commuters.

5. Negotiating tough new contracts with the TWU and other unions that do not add any costs for the MTA and its riders. Curbing overtime abuse is of course important (another hands-on tactic of the governor was to hand-pick a new MTA Inspector General) but it is labor costs that are the primary driver of MTA spending, accounting for 60% of the MTA’s annual operating budget. The next round of contracts MUST contain work-rule changes that make workers more productive and contribute to cost savings, not increases. (Bob Linn is an excellent new appointment to the MTA Board who should be able to assist in this effort.)

OK, Governor Cuomo, you have been given everything you wanted in terms of control, more than many think is appropriate. Use your power wisely and effectively because there is no longer any question the subway buck stops with you.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

 

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Governor Gets What He Wants at the MTA; Now It's Time to Deliver Mon, 24 Jun 2019 04:00:00 +0000
The MTA is Fiscally Exhausted https://www.gothamgazette.com/130-opinion/8600-the-mta-is-fiscally-exhausted https://www.gothamgazette.com/130-opinion/8600-the-mta-is-fiscally-exhausted MTA Cuomo finances

(photo: MTA/Patrick Cashin)


We call it the distraction circus. Donald Trump’s advisor, Steve Bannon, called it “flooding the zone with sh*t” to befuddle the news media and critics. Whatever you call it, the endless kerfuffle Governor Cuomo is stirring around the Metropolitan Transportation Authority (MTA) is obscuring what we think are the MTA’s potentially catastrophic money problems.

Yes, even after new revenue from congestion pricing is factored in, the MTA is still in big financial trouble.

Five very big things jump out in terms of the MTA’s fiscal health. First, Governor Cuomo and legislative leaders are sending strong signals they are going to renege on the remaining $7.3 billion they promised the MTA in direct state aid in the 2016 state budget for the 2015-2019 MTA capital plan. Second, the governor says state monies will generate only about $30 billion of the $40 billion to $60 billion his own workgroup estimated the MTA needs for its 2020-2024 capital plan.

Third, the governor is strongly suggesting the MTA will have to borrow roughly $10 billion to $30 billion on top of its already soaring debt load. Fourth, even with massive cost cutting, the MTA’s debt payments are rising to alarming levels, with 19% of operating income possibly going to debt by 2022, raising the harbinger of a “death spiral.”

Fifth, these are not the MTA issues the Board, Legislature, or transit reporters are talking about nearly enough.

Importantly, the MTA is facing these dire fiscal pressures while New York City’s economy is in the midst of a decade-long boom and state and city tax revenues are at record levels. What happens when there is the inevitable downturn?

The MTA is Fiscally Exhausted, so Where is the $7.3B?
With much fanfare, the Governor and State Legislature included in the 2016 state budget a “historic” commitment of $8.3 billion in direct state aid to the MTA’s 2015-2019 capital plan. More than three years later, the state still owes the MTA $7.3 billion.

The devil is truly in the details for state budget promises. The much touted 2016 state bailout of the MTA allowed $1 billion to be given to the MTA without condition, but an additional $7.3 billion will only be available after the MTA borrows until it can borrow no more -- in other words, when the MTA is fiscally “exhausted.” (See Part NN of the 2016 budget.)

As of May 2019, the MTA has gotten only $1 billion of the state bailout money promised in 2016, and $11 billion from all sources for the $33 billion it planned to spend on the 2015-2019 capital plan.mta1

The Subway Action Plan: A Distraction from the $7.3B owed by the State?
As of December 2017, the MTA had received only $65 million of the state capital dollars promised in the April 2016 state budget for its 2015-2019 capital plan. In July 2017, the governor announced the Subway Action Plan, which included $328 million for capital projects (which is less than 5% of the $7.3 billion of the promised state capital funds). Yet, the Subway Action Plan has become a proxy for effort by the state. The governor’s office has repeatedly emphasized the millions the state was contributing to the Subway Action Plan while glossing over the $7.3 billion it owes the MTA.

[READ: There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent]

MTA Tens of Billions Short of Funding Needed for Capital Plan Starting in 2020
To recap, the state still owes the MTA $7.3 billion for the current, 2015-2019 capital plan. Now, the governor says the MTA won’t get new state funding for the next capital plan.

Last week, Governor Cuomo doubled down on his rhetoric that the MTA must “reform” or it won’t get more funding from the state for the MTA’s 2020-2024 capital plan. Speaking on The Brian Lehrer Show, the governor said that the MTA will get only $30 billion from the state for the MTA 2020-2024 capital plan, including congestion pricing and state dedicated taxes, saying it needs to do better with the billions it has. This is much less than the $40 billion to $60 billion Cuomo’s own MTA Sustainability Workgroup concluded in December 2018 would be needed for the 2020-2024 plan.

The biggest problem with this statement is that the MTA is already fiscally exhausted, and “reform” -- including possible consolidations from a forthcoming reorganization plan (more on that here) -- will not possibly make up the additional $10 to $30 billion that the MTA is missing to meet its needs for the next capital plan. 

Skyrocketing Debt Payments: 19 Cents of Every Fare Dollar
While the MTA has been borrowing itself into a state of “fiscal exhaustion” to meet the terms of the 2016 state budget for its promised $7.3B, debt service payments have soared to record levels.

In 2017, debt payments cost 17% of the MTA’s operating budget. By 2o22, debt payments will consume 19% of the operating budget, as projected in its February 2019 financial plan. (All charts in this piece are sourced from data in this plan.)

In total, debt payments will be $3.22 billion in 2022 -- an increase of 27% since 2017.

mta3

And with a threat from the governor of no more state funding, the MTA seems to be on the path toward even more borrowing if it is to even attempt to meet its capital needs for 2020-2024.

Blunt Cuts Won’t Save the MTA
With debt service on the rise and ridership declining, the MTA is facing a large operating deficit. The operating budget pays for everyday subway, bus, and rail service, and money borrowed to pay for capital expenses. Every dollar paying back borrowed money is a dollar that cannot be spent on subway or bus service.

As debt costs soar, so does the ongoing gap between the MTA’s income and expenses. The MTA’s deficit for 2020 has now reached $467 million, with even larger gaps in the years to come. (To be sure, the MTA is also struggling with costs including health care for current and retired workers -- a problem for many big employers in the U.S.)

mta2

If the MTA can’t reduce its debt payments, how can it make up future operating losses? The biggest likelihood is through workforce reductions, which could increase the risk of entering a “death spiral” of less service, fewer riders, and less farebox revenue. Labor makes up 60% of operating costs and the MTA’s labor contracts are up for renewal this year. The MTA has 75,000 employees and is by far the largest unit of state government. 

There are rumors of big layoffs circulating within the MTA. The obvious concern for riders is how layoffs affect customer service. A smart reorganization of the MTA could make sensible consolidations, but there is tremendous pressure to close the MTA’s operating deficit and chop out dead wood. The risk is the reorganization could decimate the MTA’s workforce at a time when working for the MTA is not likely at the top of job seekers’ lists, all while the governor continues to harshly criticize the MTA professional staff for lack of innovation and execution.

Exhausted and in Danger
In the 2016 budget, the governor and Legislature committed $8.3 billion to the MTA. They have given it $1 billion. Will the MTA get the remaining $7.3 billion? Will the governor and Legislative Leaders finally level with the public? Where the heck is the MTA supposed to find the roughly $50 billion it needs for the 2020-2024 rebuilding plan? How much money does the MTA really need? What is the debt redline? Some states keep debt payments at 5% to 7% of their operating budgets, while the MTA is edging towards an astronomical 19%. The danger signs for the MTA are mounting, and we need an honest discussion of how to fix this problem before it’s too late.

[READ: There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent]

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Rachael Fauss is Senior Research Analyst and John Kaehny is Executive Director at Reinvent Albany. On Twitter @ReinventAlbany.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The MTA is Fiscally Exhausted Thu, 13 Jun 2019 04:00:00 +0000
There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent https://www.gothamgazette.com/state/8505-there-s-plenty-of-money-in-the-mta-capital-plan-it-s-just-not-being-spent https://www.gothamgazette.com/state/8505-there-s-plenty-of-money-in-the-mta-capital-plan-it-s-just-not-being-spent Cuomo subway MTA

Gov. Cuomo inspects track work (photo: Kevin P. Coughlin/Governor's Office)


The subway (plan) is delayed again.

While subway service has improved since the nadir that led to the current (and controversial) “state of emergency,” it’s obvious to anyone who rides the system enough or just watches the New York City Transit Twitter feed that there’s still a ways to go before everything is at or near full strength.

But while the Metropolitan Transportation Authority (MTA) needs a funding stream that’s sustainable and long-term, the authority has been unable to spend many billions of dollars already appropriated to it by both the city and state, money that’s supposed to be spent on expansion projects, getting the trains to a state of good repair, and more.

In other words, there’s plenty of money in the MTA capital plan, it may just be in the wrong hands.

The MTA’s 2015-2019 plan for capital projects is in its final year, but as the months tick by, it looks increasingly likely that the plan won’t wind up anywhere close to completed, raising questions about what will make it into the next plan and what will happen to billions of dollars allocated to this one.

By the MTA’s own account, only about $11.3 billion of the $32 billion pledged to fund the plan in 2016 has actually been delivered to the agency. It’s a function of the MTA’s inability to efficiently and effectively complete projects as well as poor planning and delays that go into the design of the capital plan, which covers everything from major expansion and repair projects to track replacement and signal upgrades, and deals with the city’s subways and buses, as well as the commuter rails.

While both New York City and State pledged record amounts to the plan when funding was announced -- a joint agreement among the MTA, Governor Andrew Cuomo, who effectively controls the state authority, and Mayor Bill de Blasio -- neither entity has given the agency anything close to the full amount promised over the life of the plan.

And there’s a particularly large shortcoming when it comes to the state’s pledge of $8.3 billion given that among several key provisions of the funding deal, which Cuomo and de Blasio haggled over for months, is one that says the money from the state and city are to be the last dollars spent.

As transit watchers turn their attention to the upcoming 2020-2024 MTA capital plan, it looks increasingly likely that the $7.3 billion New York State hasn’t sent the MTA for the current five-year plan will not be delivered to the agency during the expected time frame, or possibly ever. Complicating the upcoming picture are new MTA revenue measures, including congestion pricing, passed in the new state budget April 1.

When the 2015-2019 capital plan was unveiled, Cuomo and de Blasio put out a press release in which both men hailed the “historic investment” the two levels of government were making in the authority that, among other things, runs the New York City subways and buses. And both men promised big money.

The mayor pledged that New York City would give $2.5 billion to the capital plan, and the governor said that the state’s contribution would be $8.3 billion. But at the moment, the MTA’s own numbers show that as of March 31 the authority has only received $805 million from the state and $668 million from the city. On the other hand, the authority has issued $4.1 billion worth of its own bonds to finance the plan.

This spending pattern was designed like this from the start. In the same press release where de Blasio and Cuomo hailed their respective historic investments, it was noted that the state and city contributions would come proportionally and at the same time. Outside the realm of press release promises, state law made clear that the majority of the money would be the last dollars in to the plan as the 2016 budget language laid out:

“The additional funds provided by the state pursuant to section one of this act shall be scheduled and made available to pay for the costs of the capital program after MTA capital resources planned for the capital program, not including additional city and state funds, have been exhausted, or when MTA capital resources planned for the capital program are not available.”

Where’s the Money
This too was by design, according to a Cuomo administration official, who said that the last-dollar-in formula was to ensure that the authority spent efficiently and quickly on the plan.

“The MTA was in a state of emergency at the time we did these capital funds,” the official told Gotham Gazette during a background call under the condition of anonymity, “and we wanted to make sure that not only were we sending a record capital program, but then those dollars were going to go out the door. But the MTA had a practice of doing was enacting the capital plan funded with its funds and then using a portion of the proceeds that were committed to fund the debt service on the capital plan, but actually for operating,” the official said.

While this 2015-2019 capital plan, like those that came before it, continues to lag, the Cuomo administration official told Gotham Gazette that no part of the plan was being held up due to a lack of funds, and defended the last-dollar-in policy as ensuring the plan gets done.

“So why the agreement says that they should contribute first? Because we wanted to make sure that they did not not execute the plan,” the official said. And Freeman Klopott, a spokesperson for the governor’s budget office, insisted that the money is available to the MTA whenever it asks.

“The over $1.4 billion in the FY 2020 Enacted Budget is now available, as is the balance of the over $8.6 billion State contribution,” Klopott told Gotham Gazette by email, while also promising that whatever amount of funding is necessary for the plan beyond 2019 will still be available to the MTA.

But there’s also the question of where the money owed to the MTA in the current capital plan is going to come from. The latest report on the MTA’s finances from Comptroller Tom DiNapoli, released in October 2018, noted that “[t]he State has not yet identified the sources of $7.3 billion of its funding commitment, and the City has not identified the sources of $1.8 billion of its commitment.”

A spokesperson for Mayor de Blasio told Gotham Gazette that the city “will meet our statutory obligation which is explicit about how the monies flow” when asked about the status of the money pledged to the MTA.

The Cuomo official who spoke to Gotham Gazette disputed the comptroller’s report, said that the money is appropriated in the budget, and that it “will come out of the state’s general fund. The state’s general fund is over $100 billion, so it will come out of that, and it will come out as soon as they need the funds.”

Big Budget Questions
While the MTA finds itself in a position of facing down a capital plan costing perhaps $40-$60 billion, in large part to potentially fund MTA New York City Transit President Andy Byford’s Fast Forward plan, which involves tremendous amounts of work to get the system to a modern state of good repair, transit experts say it’s difficult to parse whether or not the authority is actually making do without the state money.

“These are not basic questions, they’re actually kind of hard questions, because I'm not really sure how the MTA is making do without this money, or how they get it back from the state,” transit expert Ben Kabak, who writes the Second Avenue Sagas website, told Gotham Gazette.

Kabak said that when the money is slow to arrive, the agency first cuts back on “cosmetic upgrades or things that aren’t important to keep the system running” to focus on signals and tracks and train cars. But over time, he said, as the money continues to not arrive “you end up with this sort of maintenance gap, where something that might have happened a year and a half ago, is delayed because of budget negotiations, and they have two stations that they need to catch up on instead of just one.”

A recent report from watchdog organization Reinvent Albany that focused on a number of MTA reforms backs up Kabak’s point on the maintenance deficit. In a look at the agency’s capital spending, Reinvent Albany found that the agency had only committed to spending $2.3 billion on signal modernization in the most recent capital plan despite the MTA’s most recent 20-year needs assessment determining the authority needed $3 billion. In addition, while the MTA needed almost 6,000 new subway cars in the span of the 2010 to 2019 capital plans, the authority only purchased 863 new cars.

“The fact is, [the MTA] hasn’t spent what they've needed to on things like signals and buying more subway cars and buses,” Rachael Fauss, a senior researcher with Reinvent Albany and author of the massive new MTA report, told Gotham Gazette. “Those are the areas where they’ve really not invested the way they should have.”

One place where the governor’s office and Reinvent Albany agree is on the design of the majority of the state’s appropriation for the MTA. But where the governor’s office suggests it is a good way to make the MTA accountable, Fauss criticized the practice as a driver of extra debt for an agency whose operating budget is 16% debt service.

“The way that that money was set up from the very beginning was problematic, because it was never guaranteed to be given to the MTA until it is finished borrowing money,” Fauss said. “I think it was always set up in a way that it was a false promise of full state funding, and it's been simplified to the level where it's been explained as it is a direct contribution when it's when it was extremely conditional.”

Where the Cuomo administration official told Gotham Gazette that the MTA wasn’t borrowing any more money than the agency had agreed to when the current capital plan was agreed to, Kabak and Fauss criticized the mounting debt as something that contributed to slowing down the agency’s ability to finish the plan close to on time.

“I think the better approach would be for the state to just directly fund all of these projects, and not fund a bond issuance, or something along those lines. If you're building out a new subway, that is going to generate more passengers and more revenue, you can bond that out, that makes sense,” Kabak said. “But if you're just investing in state of good repair service, or state of good repair projects, and then you really just pour more debt into the existing system in the hopes that the ridership will either grow organically or not start declining to boost those revenues you end up in a situation where they're at now where they're just sort of paying out debt to continue to maintain the current system,” he said.

“We're in the fifth year of the plan,” Fauss said. “So is it always meant to be that five-year capital plans drag on for a decade, and that the money from the state comes in at the last minute? Borrowing at the MTA is reaching such an unsustainable level that if the deal all along was to have MTA borrow some money, maybe that deal was bad to begin with.”

She added that “16% of [MTA] operating expenses are eaten up by debt right now. And it's going to go up to even more than that in the future, to a higher percentage. So when you've got debt service eating up the operating budget, that means less crews to do cleaning, that means less maintenance, that means fewer workers trying to do the same work when morale at the agency isn't exactly at an all-time high right now.”

That political leaders and the MTA have just come to accept that the MTA capital plans will now stretch out well past five years is also something that hurts the transparency of the plans when the agency plays catch up to finish them. Per the new Reinvent Albany report, the MTA “provides the total spending on each plan over its entire lifetime at the end of each year” instead of showing how much the authority spends per year per plan.

Having done its own math to determine what spending was each year, Reinvent Albany found that in 2017 the MTA was still spending $212 million on the 2005-2009 capital plan and close to $3 billion on the 2010-2014 capital plan.

And as the current capital plan reaches what’s supposed to be the end of its life, advocates and watchdogs are concerned that the promised state money for the 2015-2019 plan will never actually be delivered.

Maria Doulis of the Citizens Budget Commission explained that the agency could continue with business as usual, dragging out this plan for years. Another scenario is that in Governor Cuomo’s many desired reforms for the agency, the current capital plan could be capped at the projects being worked on at the moment and then rejiggered for the 2020-2024 plan “that will incorporate some of the projects that were previously there, or maybe drop some of them out,” Doulis said. “And in that scenario, the state’s $8 billion doesn't get used, and then the state can sort of rededicate it if it would like, to the new capital plan.”

A rollover like this is also a concern for Fauss. “The real question is going to be what happens to those individual projects, what's going to roll over, and our fear is that that commitment is just going to get shoved over to the next plan. Because they're not fully funded for the 2020-2024 plan,” she told Gotham Gazette.

An analysis from Citizens Budget Commission showed that thanks to recently enacted legislation around congestion pricing, an internet sales tax, and a real estate transfer tax on expensive properties, there will be $25 billion for the MTA to put in a capital plan lockbox.

“But that does not equal the forty to fifty to sixty billion [dollars], depending on who you talk to, that they need. So, if that money rolls over, or if those projects roll over they basically weren't completed in time and we're still going to be behind on them,” said Fauss of Reinvent Albany.

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by Dave Colon, Gotham Gazette
     

Read more by this writer.

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There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent Tue, 07 May 2019 04:00:00 +0000
Battles Over the MTA’s Long-Term Planning are About to Really Heat Up https://www.gothamgazette.com/130-opinion/8409-battles-over-the-mta-s-long-term-planning-are-about-to-really-heat-up https://www.gothamgazette.com/130-opinion/8409-battles-over-the-mta-s-long-term-planning-are-about-to-really-heat-up govandrewcuomo canarsie engineer

(photo: governor's office)


For those of us who want the MTA to finish a favorite project before our grandchildren are retired, now is the absolute best time to let Governor Cuomo know how you feel. The MTA is finalizing a document that will shape the New York region’s public transportation system for decades. Construction firms, unions, suppliers, and real estate interests are all lobbying the MTA to protect and further their own interests.

Every five years, the MTA issues a report of its capital needs for the next 20 years. This document identifies projects designed to improve travel for subway, bus, and railroad riders as well as for the drivers who cross the MTA’s seven bridges and two tunnels. The upcoming report will identify the transportation system’s critical needs and more than $100 billion worth of projects that the MTA deems essential. This is an extraordinary amount of money considering that the federal government ’s contribution to the MTA’s capital program has been less than $1.5 billion per year (and its contribution to all 6,800 public transportation systems across the country totals only about $13 billion per year).

The MTA’s 20-year needs assessment will set the stage in the fall for yet another document, a five-year capital program. The proposed program will identify which projects in the 20-year needs assessment should begin between 2020 and 2024. Aside from the state’s budget, the MTA’s five-year capital program is one of the most important and controversial items that the Legislature deals with on a regular basis.

In 1999, the MTA released a 20-year needs document that reflected the priorities of Governor George Pataki and Mayor Rudy Giuliani. The MTA saw the need to relieve crowding on the Lexington Avenue line and provide subway service to the Jacob Javits Convention Center. The MTA subsequently built three new subway stations on Second Avenue and extended the No. 7 train to the far West Side. Some of the initiatives identified in 1999 have not panned out though, such as extending subway service to LaGuardia Airport.

The current five-year capital program, which ends this year, has allocated approximately $33 billion to upgrade the transportation network, including purchasing new rail cars, modernizing signals and stations, and building new maintenance facilities. Nearly one-quarter of the program has been devoted to major expansion projects. These initiatives are the ones that are the most debated and anticipated, and include bringing the Long Island Rail Road to Grand Central Terminal, preliminary construction for the second phase of the Second Avenue Subway, and engineering for work that will allow Metro-North to access Penn Station and build four new Bronx stations.

The MTA will propose to spend even more over the next 20 years than it has in the previous two decades. New York City’s population and train ridership have grown more than planners expected 20 years ago. Moreover, New Yorkers want the MTA to provide modern and safe services, and the bar that defines such a system is continuously raised. The new subway stations on Second Avenue have become today's minimum standard: spacious and quiet stations with numerous escalators, elevators, and electronic signs, along with platforms that are cooled on hot summer days.

One thing is very different about this year’s preparation for the 20-year needs assessment and capital program. Five years ago, Governor Cuomo paid little attention to the MTA. Now, the governor is intimately involved with the MTA’s planning and operations. The MTA’s 20-years assessment will be, in effect, the governor’s 20-year vision for the future of transportation in New York City, Long Island, and the Hudson Valley.

Undoubtedly, the MTA’s 20-year needs assessment will state that the authority will connect Metro-North to Penn Station and Long Island Rail Road to Grand Central Terminal. The second and third phases of the Second Avenue subway are also likely to be considered essential. This would extend the subway north from 96th Street to 125th Street and south from 63rd Street to Houston Street. Future phases of the Second Avenue subway, including extending it to Wall Street, may not be in the 20-year needs assessment, indicating that construction will not begin until after 2040.

The document will probably also indicate that the MTA needs at least $6 billion per year to maintain and upgrade its equipment and facilities. There will be a huge gap between the amount of money available and the MTA’s needs. Hopefully, the state does not burden future generations with excessive debt. In recent years, the MTA has been unable to appreciably improve service because it is spending more than $2.5 billion annually on principal and interest to pay back the money it borrowed to finance its previous capital programs.

The 20-year needs document will reveal the governor’s thinking about how he wants to allocate funds between suburban and city projects, as well between new expansion projects and basic infrastructure projects. When it comes to the most expensive projects, he will have to choose between those that would help spur new growth (like the extension of the 7 train has done in Hudson Yards) or ones that alleviate existing subway congestion (like continuing the Second Avenue Subway). The 20-year assessment and 5-year capital program will also indicate how the governor plans on accommodating the preferences of key players in the funding debate including Mayor de Blasio and the leaders of the State Senate and State Assembly.

One caveat about the assessment report and how it will be indicative of the MTA’s level of transparency and accountability. Officials might not want to release the document for many reasons. For example, despite the passage of a congestion pricing program, it is likely to show the need to raise future taxes, tolls, and fares. Likewise, the report will reveal how the MTA is slipping behind certain goals that it had set to upgrade its sprawling network. Just because the MTA has issued these reports every five years does not mean it will release one this year. That would be a shame because the public and elected officials should be aware of the progress that the MTA has been making, and to better understand its ongoing and enormous needs.

For the rest of the year, elected officials will argue vociferously, in public and behind the scenes, about funding levels and specific projects. Although the media and public opinion will shape the final outcome, savvy interest groups know that the best time to push for their favorite projects is now.

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Philip Plotch is a political science professor at Saint Peter’s University and the author of Politics Across the Hudson: The Tappan Zee Megaproject. His book about the Second Avenue subway (The Last Subway) will be published by Cornell University Press in the first quarter of 2020. On Twitter @profplotch.

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Battles Over the MTA’s Long-Term Planning are About to Really Heat Up Wed, 17 Apr 2019 04:00:00 +0000