Streetsblog New York City

Governor Andrew Cuomo’s 2012 budget, released this afternoon, offers what now passes for good news for transit: maintenance of the status quo.

The budget breaks the three-year streak of raiding dedicated transit funds to patch up the state’s deficit, and it restores the hundreds of millions of dollars that Albany cut from the MTA’s payroll mobility tax, for the time being. This budget also adds $770 million in badly needed but expected funding for the next three years of the MTA capital plan (only the first $150 million will be disbursed this year).

Transit riders are hardly in the clear, however: Included in the budget bill is language that would raise the MTA’s debt limit by $7 billion, which the state has to do because so much of the transit agency’s capital program remains unfunded.

For now, the Cuomo administration is honoring its various promises to transit. Unlike last year, when the administration stole $100 million from dedicated transit funds, every dedicated transit tax dollar is headed where it’s supposed to go.

And while Cuomo cut the dedicated payroll mobility tax by $320 million a year in December, the executive budget makes the MTA whole. Of course, the trouble with cutting a dedicated tax is that transit riders are reliant on future governors and legislatures to reimburse the MTA each year in perpetuity.

The $770 million capital plan contribution, while significant, only means the MTA will be treading water. That contribution, though it hadn’t been made official by the state before today, was one of many assumptions built into the MTA’s plan for the remaining three years of its capital program, according to Charles Brecher of the Citizens Budget Commission. While sizable, it doesn’t make the MTA’s long-term financial situation any less dire.

Even if all the other optimistic assumptions built into the MTA capital plan come true, and that’s a long shot, the transit agency will still be up to its ears in debt. According to a recent report from State Comptroller Tom DiNapoli’s office, which factored in assumptions like this $770 million state contribution, the current capital plan will rely more heavily on borrowing than any in the MTA’s history. As a result, riders will eventually pay for ever-larger debt payments with higher fares or reduced service.

It’s no wonder, then, that the budget also includes an increase in the MTA’s debt ceiling. Currently the MTA is allowed to carry $34.9 billion in outstanding debt; the increase would allow the MTA to borrow up to $41.9 billion. As the state budget documents note, the MTA’s debt limit is usually raised once for every five-year capital plan: It was raised in 2000, 2006, and 2010. This increase, however, is the second for the 2010-2014 program. All told, the MTA’s debt ceiling will have swelled by $13 billion to accommodate all the borrowing brought on by the state’s unwillingness to fund transit.

Joe Lhota was confirmed as MTA chairman by the New York State Senate this afternoon. Image: MTA.

This afternoon, Joe Lhota was confirmed as the new chairman of the MTA. Hearings held earlier today provided a glimpse into the kind of leadership New York transit riders can expect from Lhota. The new chairman defended the MTA from the most strident attacks of anti-transit state senators. When it came to the question of properly funding the transit system, however, Lhota chose to protect the Cuomo administration’s political interests, not transit riders.

The strongest accusations of MTA mismanagement came from Long Island Republican Lee Zeldin, who has also led the fight to repeal the payroll mobility tax. In successive questions, Zeldin raised the issues of overtime abuse, pension abuse and overspending on consultants, among others. Each time, Lhota explained that the worst excesses had already been curbed under previous MTA leadership. Finally, Zeldin closed by wishing “for there to be accountability for the taxpayer dollars so there isn’t a need to use taxpayer dollars at all.”

Lhota didn’t let that stand. “There is no way the MTA can operate without taxpayer dollars,” he interjected. “The entire operation of the MTA cannot be paid for from the riders. It was never envisioned that way.” It’s comforting, at least, to know that the head of the MTA will stand up for the concept of public support for transit.

That doesn’t mean that Lhota at any point articulated the need for additional revenues for transit, however. In an effort to make the case for more transit funding, Senator Dan Squadron, who represents parts of Manhattan and Brooklyn, asked Lhota how borrowing roughly $7 billion to pay for the last three years of the MTA’s capital plan would eventually affect riders. Lhota fell back on budget-speak to deny that the borrowing would put still more pressure on the fare. “There is to my knowledge no plan to have fare-backed bonds,” he said. However, both State Comptroller Tom DiNapoli and transit advocates have sounded the alarm about depending on borrowing to pay for needed repairs and construction.

Similarly, when Bronx Senator Rubén Díaz, Sr. pressed Lhota about whether he’d support tolls on the East River Bridges, Cuomo’s nominee did not mention the MTA’s struggling finances. Said Lhota, “If it’s what the city wants to do and it’s approved and it’s what the state legislature wants to do, I’m the guy who will get it done efficiently and effectively.” Opining on bridge tolls might be outside the MTA chairman’s job description, but Lhota could easily have noted that the transit system needs the money.

Besides Squadron, the other senator to make an appeal for additional transit funding was Brooklyn’s Eric Adams. “If we want to get New Yorkers out of cars, then we need a first-class transportation system,” he said. “Albany has not done enough.” Adams also urged Lhota to add better bike parking at subway stations, saying that he sometimes bikes to the train himself.

Jay Walder may have exaggerated when he claimed this week to have put the city transit system “back on firm financial footing” during his stint as MTA chairman, but he did show remarkable reserve in not letting loose on Albany for undercutting rail and bus service at every turn. Unfortunately the media failed to fill in the blanks.

Half a world away from Albany, Jay Walder has more to smile about.

Speaking at a press conference in Hong Kong, where he just started his new job as chief executive of the privately-owned Mass Transit Railway Corporation, Walder said: “New York, when I arrived there, was in a financial crisis. The system simply did not have enough money to continue to operate. The assets were not being renewed. And the infrastructure was in terrible condition.”

Walder’s understated comments were picked up by the Times and the Wall Street Journal, among others, but nowhere have we seen anyone point out how little power the head of the MTA actually wields over agency funding. Nor did any reporter or editor take Walder’s cue to highlight years of Albany malfeasance.

To read the Times piece, for example, you’d think the MTA is an autonomous operation, free to conduct business without political interference. There is a passing reference to Governor Cuomo’s gutting of $320 million in annual payroll tax revenue, but no mention of last year’s $100 million Albany raid on dedicated MTA funds. Forgotten is how state senators used congestion pricing as a litmus test for Walder’s confirmation. With Albany unwilling to enact a new revenue stream via road pricing, it fell to Walder to cut spending.

Most glaringly, absent is an accounting of the decades of lawmaker thievery and neglect that preceded Walder and Cuomo, though those misdeeds more than anything will saddle transit riders for years to come, in the form of decreased service, fare hikes, or both. Other than raising fares or selling off assets, the chair of the MTA has very little revenue-raising clout. For whatever reason this factoid never seems to make the papers.

As for Walder, you get the distinct sense that there is no looking back.

“I think we have a very different situation here,” Walder said. “We have a first-class railway. We have a sustainable financial model that is supporting that railway. And I think the people of Hong Kong are benefiting tremendously from what we have.

“I don’t think it’s the same situation as what you have in New York.”

Governor Andrew Cuomo focused heavily on jobs and the economy in his 2012 State of the State address this afternoon. He also devoted a few minutes to his infrastructure initiatives. Yet, despite serving as chief executive of the state where residents depend the most on transit service and transit infrastructure for access to jobs, Cuomo spent about as much time discussing the MTA as the 1953 Corvette.

So far, Andrew Cuomo is on track to pick up a second Mr. Magoo award at the end of 2012.

“We have a great opportunity to rebuild New York,” Cuomo said, introducing his infrastructure agenda by citing the state’s inventory of deficient roads and bridges. “We have much work to do and we need a new approach to get it done.”

Was he talking about a new smart-growth program to rein in the costs of sprawl? Maybe a new initiative to invest in the MTA’s capital program? Far from it. The “new approach” centers around public-private partnerships (P3s) to finance infrastructure projects.

The first project Cuomo mentioned was the new Tappan Zee Bridge, which his administration plans to build without a transit option. Referring to the lengthy public process that produced plans for a bridge with transit, Cuomo said, “Fifteen years of planning and talking and commiserating is too long. It’s time to build, to act, to perform.” More of the same from the first winner of Streetsblog’s Mr. Magoo Award for shortsightedness.

Streetsblog will be looking into the specifics of Cuomo’s infrastructure proposals in the days ahead. For now, the outline Cuomo gave in today’s speech includes a few red flags worth noting:

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Photo: Robert Stolarik/New York Times

New York City transit riders might have taken some small measure of satisfaction from the sight of Carl Kruger resigning from the State Senate earlier this week. Pleading guilty to federal corruption charges, Kruger became the third member of the “Fare Hike Four” — the gang who killed a 2009 plan to fund transit by putting a price on NYC’s free bridges — to exit Albany in disgrace. Two others, Pedro Espada and Hiram Monserrate, were run out of town by voters and their fellow legislators under clouds of scandal. Ruben Diaz, Sr. is the only one who remains, reduced to irrelevance now that marriage equality is the law of the land and the Republicans control the Senate.

So you can blame the Fare Hike Four for the 2010 service cuts (and you can also blame the Assembly Democrats, who killed congestion pricing in 2008), but these aren’t the guys who are going to write the next chapter in the MTA funding story. If New York is going to fix the transit mess that Kruger and company bequeathed to us, don’t look to the state legislature just yet.

First, Governor Andrew Cuomo has to show some glimmer of understanding that New York’s transit system matters. So far, he hasn’t displayed an inkling.

2011 began with a $100 million Albany raid on dedicated MTA funds. It ended with a tax deal where Cuomo used $320 million in annual transit funding as a bargaining chit to gain suburban Republican votes. In both cases, city residents were sacrificed to achieve the governor’s political ends. That seems to be the Cuomo MO.

Meanwhile, millions of New York City transit riders are left with a diminished system and few prospects for any sort of improvement. If you ride the bus or the train, then you know all about the longer waits and additional crowding since the 2010 service cuts took effect. Does the governor?

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Earlier this week, Streetsblog contributor Charles Komanoff crunched the numbers to see what could happen if Governor Andrew Cuomo doesn’t follow through on his pledge to restore the $320 million in MTA funding cuts he signed into law on Monday. The cost to commuters, the economy, and public health, he found, could substantially outweigh the value of the tax relief.

Andrew Cuomo, who governs the state with more transit riders than any other, basks in the glow of cutting $320 million in dedicated transit funding. Photo: Governor's Office

Cuomo spokesperson Matt Wing sent this response to Komanoff:

Your facts, assumptions and analysis are wrong. The reduction in the payroll tax will not cost the MTA one dollar and to suggest otherwise ignores the law.

Cuomo is trying to define the terms of the debate like so: If Albany makes up for the hundreds of millions in payroll tax revenue he just cut, then he did no harm to transit riders and the regional economy.

But the damage is all but inevitable.

The governor may very well scrounge up $320 million for the MTA this year, but make no mistake — straphangers will feel the pain of his transit funding cut. Albany commitments to fund transit never hold up over time. Consider:

• In 2001, Albany contributed $144 million in general taxes to MTA operations [PDF]. Now it contributes $7 million.
• When Governor Hugh Carey left office in 1982, Albany contributed $1.5 billion to the MTA’s five-year capital program. By 1992, under Governor Mario Cuomo, Albany wasn’t putting in a penny.
• Until 2009, Albany was contributing $45 million a year to fund student Metrocards. Then legislators threatened to cut the contribution down to $7 million. Eventually they consented to $25 million.

When Cuomo signed the MTA payroll tax cut into law, surrounded by Long Island politicians, he made it out to be a boon for job creation. But Cuomo’s appeasement of suburban political interests will hit straphangers hard. A weaker transit system means job-seekers will have less access to employment, employers will have less talent to draw from, and New Yorkers will have to deal with higher transportation costs.

The governor may find a way to restore the money this year, and even the next. Maybe Cuomo will patch up the hole he gouged in the MTA budget until 2016. The patches won’t last forever, though. Transit riders will pay for this funding cut eventually, just like they’ll pay for Cuomo’s decision to fund the MTA capital plan by borrowing. Sooner or later, the Cuomo fare hike is coming.

The Bronx's second Select Bus Service route is planned for Webster Avenue, marked as #1 on this map of high-priority routes for bus improvements. Image: NYC DOT/MTA

A new crop of bus routes is moving into the pipeline for implementation as Select Bus Service. The MTA and NYC DOT are in the initial stages of bringing SBS to the Bronx’s Webster Avenue, where the most unreliable bus in the borough runs, and to Brooklyn’s Utica Avenue, the second-busiest bus route in the city.

The innovations of SBS — pre-paid boarding, dedicated bus lanes, priority at traffic signals — have sped buses and attracted new riders on Fordham Road, First and Second Avenues, and 34th Street. And they can work on bus lines all over the city. So as the first round of SBS implementation comes to a close (lines on Nostrand Avenue and Hylan Boulevard are scheduled for completion in the next year or two), the development of new routes is a welcome signal that the MTA and NYC DOT are committed to bringing bus improvements to more New Yorkers.

The city’s first Select Bus Service line launched on Fordham Road in the Bronx in 2008, and it’s been a smashing success. Bus speeds increased by 20 percent and ridership by 30 percent. So expanding SBS to more routes in the borough is a no-brainer. The choice of the Bx41 for the upgrade was first reported in the Daily News yesterday.

“There was a lot of support in the Bronx for doing a route along Webster Avenue,” an MTA spokesperson told Streetsblog. “This would be a full-fledged SBS route with all the features offered by the Bx12 and the M15.”

Running down Webster, the Bx41 has relatively high ridership — 7.6 million annual riders — but was ranked the most unreliable bus in the borough this year by the Straphangers Campaign. Perhaps in part because of all that bus bunching, ridership on the route has been in free fall. The Bx41 saw one million fewer trips in 2010 than in 2009, according to the MTA.

There’s no roll-out date for the Bx41 yet, according to the MTA, and any eventual route will need to go through a public review process.

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Albany’s latest raid of transit funds could hit New York City particularly hard. To help pay for his upper-middle-class tax cut, Governor Andrew Cuomo and the state legislature are stripping an estimated $320 million a year in revenues from the MTA payroll tax. Although the legislation is said to contain a pledge to find equivalent funds elsewhere, the as-yet unspecified reimbursement mechanism is likely to make the transit agency more vulnerable to future cuts, as Streetsblog noted last week.The potential deterioration in service could easily end up costing drivers and transit riders more in lost time and damaged health than they will gain in lower taxes.

Governor Andrew Cuomo's tax package could leave straphangers stuck with longer subway trips and more crowding. Photo: ianqui/Flickr

To gauge the impact, I entered $320 million worth of cuts in subway operations into my Balanced Transportation Analyzer (BTA) spreadsheet, which combines New York City traffic, transit and revenues into a single model. Here’s what it predicts for city residents, workers and visitors in a worst-case scenario, in which Albany breaks its promise to replace the money, and all of the resulting cuts fall on subway service:

• A nearly 3 percent lengthening in the average duration of subway trips, as maintenance is curbed and service curtailed.
• A 2 percent drop in subway ridership triggered by the poorer service.
• An additional 13,000 more cars driven into the Manhattan Central Business District each weekday, as some frustrated subway riders elect to drive rather than wait for trains.
• An average 2 percent drop in vehicle speeds within the CBD and 0.5 to 1 percent on the approaches, a consequence of cramming more vehicles onto already jammed streets, highways and bridges.
• More pollution and traffic crashes, and less biking and walking, caused by the rise in driving.
• An estimated 27,000 fewer people journeying to the Manhattan CBD on a typical day — a drop of 0.8 percent — because only some of the lost subway trips are replaced by cars and taxicabs.
• A further shortfall of $40 million in MTA revenues as subway ridership declines.

Drivers’ and straphangers’ lost time — an estimated 23 million hours a year — can be expressed in dollar terms; so can the environmental consequences from the increased gridlock. Through a set of calculations that reflect the spectrum of “values of time” — more for an 18-wheeler than a car, for example — the BTA calculates the lost time at $450 million a year ($260 million for drivers and truckers, $190 milion for subway and bus riders). Tack on to that $90 million in worsened health due to the increased pollution and decreased biking and walking, plus the $40 million in reduced farebox revenues. Lost business income and tax revenues from the nearly 1 percent drop in person-trips to the CBD would compound these figures.

Under this scenario, New Yorkers’ $320 million in tax savings are swamped almost two-to-one by the $580 million in costs detailed above.

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As the details of Governor Andrew Cuomo’s MTA tax deal take shape — they’ve been in flux all day — it appears that transit service could be imperiled, if not immediately then in the long-term.

A deal negotiated by Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver will endanger $320 million in MTA funding. Photo: Philip Kamrass/ Times Union

Essentially, Cuomo seems set to turn $320 million in dedicated MTA revenue into discretionary funding, a recipe for it to disappear in the future. While Cuomo has repeatedly promised that the state will pay the MTA back for all the dedicated tax revenue it will no longer collect, the reimbursement mechanism will make the transit agency more vulnerable to future cuts.

The plan, which got Senate Republicans to sign on to Cuomo’s tax reform package, will exempt private schools from paying the 0.34 percent MTA payroll tax. Small businesses will either be exempted from the tax entirely or given a rate reduction, depending on their size. Those changes will cost $250 million, which Cuomo’s office has promised will be reimbursed to the MTA.

The governor could ensure that the MTA will recoup that money largely without risk to transit riders. Currently, public schools pay the full payroll tax upfront, the MTA gets the money, and then the state repays the schools. The new exemptions could be structured the same way, insulating the MTA from the risk that state leaders won’t follow through on their promise.

According to Capital Tonight, however, the new exemptions will work differently. Schools (and presumably small businesses) won’t pay the tax at all. Instead of reimbursing the schools at the end of the process, the state will reimburse the MTA. So the MTA won’t be collecting this money from the dedicated payroll mobility tax, but from the state’s general fund. Since the public schools will also switch to the new system, the state will have to repay the MTA a projected $320 million every year.

This is a dangerous way to fund transit. General fund commitments to the MTA have a way of vanishing. Over time the state’s general fund contribution to the MTA has dwindled to all of $7 million per year (the MTA’s annual budget is over $12 billion).

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Bus riders waited at least 15 minutes for this crowded B61 during the morning rush today. A practically empty B61 was bunched up right behind it. Photo: Ben Fried

Toward the end of a press conference at the corner of Fourth Avenue and 9th Street this morning, Council Member Brad Lander remarked that not a single B61 bus came by during the 15-minute event. This was only fitting, since Lander was unveiling a new report from his office that found most rush hour B61 buses don’t arrive within the guidelines established by the MTA.

During rush hours, the B61 is supposed to arrive every eight to ten minutes, but the service is anything but reliable, according to the report, “Next Bus Please.” Fully 57 percent of buses are either spaced at least three minutes farther apart than they’re supposed to be, or bunched at least three minutes tighter together. For straphangers this translates into long waits, crowded buses, and the frustration of watching an empty B61 pull up right as you’re boarding that jam-packed bus.

“It gets really packed every morning,” said Vian Hernandez, a senior at South Brooklyn Community High School in Red Hook, who transfers from the train to the B61 to get to school. “Sometimes it comes really late.”

The current B61 route is the byproduct of the 2010 MTA service cuts (themselves a byproduct of Albany budget raids, the mounting cost of MTA debt service, and the collapse of the real estate market). The line was extended east from Red Hook to Park Slope and Windsor Terrace, absorbing passengers who used to take the now-defunct B75 and B77. The nearby B37 and B71, which served parallel routes, were also eliminated, and the Smith-9th Street subway stop has been closed for maintenance since June, further increasing reliance on the B61.

A year and a half after the cuts took effect, the study from Lander, Congresswoman Nydia Velazquez, and City Council Member Sara Gonzalez documents the strain on the riders who depend on this line, which is now the only bus or subway route that directly serves Red Hook.

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