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Posts from the "Transit Funding" Category

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It’s His Commission: Blame Cuomo for MTA’s Underwhelming “Reinvention”

The MTA Reinvention Commission report, the product of months of work from a panel of experts, was unceremoniously dumped to the press by the governor’s office at 5:30 p.m. yesterday, shortly before Thanksgiving. While the document [PDF] includes a number of worthwhile suggestions, it fails to seriously grapple with the biggest challenges facing New York’s transit system. The MTA’s astronomical construction costs and the substantial systemwide benefits of funding transit with road pricing get only cursory mentions. This is disappointing, but not surprising, since the report is a reflection of the man who created and controlled the commission: Governor Andrew Cuomo.

Photo: MTA/Flickr

Photo: MTA/Flickr

Cuomo’s disinterest in transit goes back to the start of his administration. After a campaign where he cast doubts on the Payroll Mobility Tax that stabilized the MTA’s finances in 2009, Cuomo followed through in first year in office by cutting the PMT.

Cuomo has dipped into the MTA budget multiple times by diverting dedicated transit funding to the state’s general fund. When the legislature passed bills to require more disclosure of raids, Cuomo blew open a loophole and vetoed an effort to close it, all while denying that his financial maneuvers amounted to transit raids at all.

In an election-year stunt this February, Cuomo gave Staten Island voters drivers a 50 cent toll cut in February — a political ploy that came at transit riders’ expense.

When Cuomo worked out a labor agreement to avoid a Long Island Rail Road strike earlier this year, he hosted a press conference where smiles were in abundance but details about how much the deal would cost were not. Months later, it was revealed that new labor deals would cost the MTA at least $1.28 billion through 2017, paid for by cuts to retiree fund contributions and the authority’s own capital budget. Absent from the new labor agreements: Work rule reforms to ensure that, in addition to compensating employees well, operating funds are spent efficiently.

All the while, costs and delays continue to spiral upwards on the authority’s big-ticket projects, leading MTA Chairman and CEO Tom Prendergast to admit that large-scale capital construction might not be one of the authority’s “core competencies.”

Why does it takes so much time and so much money for the MTA to do things compared to its peer systems? The report acknowledged these problems but failed to offer much in the way of critical analysis or specific solutions, similar to how it failed to zero in on road pricing as an ideal revenue stream that can both lower the agency’s debt load and dramatically improve systemwide bus performance. (For some more food for thought about what’s missing from the report, read Alon Levy’s post at Pedestrian Observations.)

Don’t blame the commission for these shortcomings though. Blame Andrew Cuomo. He created the commission, so it’s no coincidence that it produced a document that skirts the most politically sensitive issues. The report is another sign that Cuomo’s interest in transit doesn’t extend deeper than press releases and photo-ops. The governor has no intention of confronting contractors, unions, or motorists to make a transit system that works better for all New Yorkers.

Streetsblog will not be publishing on Thursday or Friday. Happy Thanksgiving, and we’ll see you on Monday. 

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Cuomo’s MTA Commission Declines to Endorse New Funding Source

If you were hoping the release of the MTA Reinvention Commission report would be the moment when Governor Andrew Cuomo comes to his senses and makes an aggressive push to fund the region’s transit system by fixing its dysfunctional tolling structure, don’t hold your breath.

It's in Cuomo's hands now: The MTA Reinvention Commission is set to release its final report soon. Photo: MTA/Flickr

It’s in his hands now: The MTA Reinvention Commission is set to release its final report soon. A draft didn’t tackle many specific funding questions. Photo: MTA/Flickr

Yesterday, Dana Rubinstein at Capital New York published a draft copy of the report [PDF 1, 2, 3]. While the MTA won’t say when the commission plans on releasing the final version, it should be coming soon. A commission member tells Streetsblog that the panel met today to go over the document before its publication.

The report examines the current state of MTA funding and operations, using case studies from cities around the world to offer examples of how its recommendations could be put into practice. It covers a wide breadth of issues, including the management of large capital projects, how to improve customer service, and better regional planning and coordination with other agencies.

The recommendations are grouped into seven “strategies,” leaving funding for last. The report emphasizes the need to keep the Payroll Mobility Tax in place, and suggests revenue enhancements like requiring all-cash real estate transactions to pay a version of the mortgage recording tax, increasing the use of value capture throughout the region, and squeezing more revenue from advertising, which is already on the rise.

When it comes to larger revenue sources, the report is more circumspect. It raises the possibility of congestion pricing, parking fees, and even distance-based subway fares, which Gene Russianoff of the Straphangers Campaign called “the mother of all non-starters.” In the end, the draft report refuses to pick sides, suggesting “a comprehensive study that re-examines the MTA’s approach to fares and tolls.”

“It was beyond the scope of this Commission to recommend a specific set of revenue-raisers,” reads the report. “[But] existing sources fall short of what will be needed for sustaining a truly great regional transportation system in the years ahead.” In short: Albany will have to make a decision, so stay tuned.

There’s a lot more to the report than the funding section. The first strategy deals with how the MTA could reform its procurement and project delivery methods. It suggests greater use of public-private partnerships and design-build contracts in a bid to encourage “risk sharing with the private sector” and to reduce the costs and timelines of MTA projects.

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How NYC Could Get More Transit Funding From Developers

As the MTA capital plan funding gap has come into focus, there’s been a lot of discussion about how new development can help pay for the transit service it requires. It turns out the city already has a tool that links real estate with transit improvements, but it’s so limited that it’s been used to fund transit upgrades only 10 times in more than three decades. For a more robust model, planners should look to San Francisco.

The iconic "lipstick building" is one of only 10 developments that have taken advantage of the city's "subway bonus" since 1982. Photo: Wally Gobetz/Flickr

The “lipstick building” is one of only 10 developments that have taken advantage of the city’s “subway bonus” since 1982. Photo: Wally Gobetz/Flickr

In 1982, the Department of City Planning created the “subway bonus,” which allows developers to construct buildings up to 20 percent larger than normally allowed. In exchange, the developer must pay for and install subway station improvements requested by the city.

The subway bonus only applies to sites adjacent to a subway station. At first, it only covered qualifying sites in Midtown. The program was expanded in 1984 to more of Manhattan and Downtown Brooklyn; in 1986, a slightly modified subway bonus was created for the Court Square area of Long Island City. In addition, the city requires developers atop future Second Avenue Subway stops to keep a public easement in new development for future station entrances.

Although tools to extract transit improvements from developers pop up sporadically in the city’s zoning code, only 10 projects have used the subway bonus program since it was first created in 1982, according to a DCP report [PDF]. The report also lists two completed projects and one proposal that offered subway improvements using other incentive programs.

Most of these projects brought upgrades like wider platforms, new or expanded walkways between stations, elevator installations, and redesigns to allow more natural light into subway stations, among other changes.

These projects might be familiar to regular subway users. The Lexington-53rd Street station, for example, received upgrades from office towers at 599 Lexington Avenue and the “Lipstick Building” on Third Avenue. In other locations, the developer of Zeckendorf Towers expanded the mezzanine at Union Square, new office buildings brought connections between platforms at the Court Square station, and the Hearst Building added stairs and elevators at the southern end of Columbus Circle.

The city is moving forward with a modified version of the subway bonus on Vanderbilt Avenue, where it is working with developer SL Green to swap increased density for a pedestrian plaza and station improvements beneath Grand Central Terminal.

While this handful of projects over the years have provided beneficial upgrades to the subway system, it’s hard to see them as anything more than spot improvements that occur only if a big new office building happens to be located on top of a subway station. New development a block away from the subway creates just as much demand for transit, but there’s no mechanism in the city’s zoning code to recapture the costs of providing that service. What’s missing is a more comprehensive value capture system.

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Prendergast: $15 Billion Gap in MTA Capital Program “Unconscionable”

Post-election, the political discussion about transit funding in New York has entered a new phase. Albany can now turn its attention to the most pressing transportation issue in the state: closing the $15.2 billion gap in the MTA’s next capital program. Yesterday, MTA Chair and CEO Tom Prendergast made his first public comments since the election. He said elected officials must be educated on the need for transit investment and repeated his call for new revenue sources to keep the region’s trains and buses running smoothly.

Tom Prendergast says elected officials must learn Photo: Kevin Harber/Flickr

A $15 billion gap in the MTA capital program threatens to saddle straphangers with the burden of even more debt. Photo: Kevin Harber/Flickr

Prendergast’s remarks came at an event hosted by a construction industry group — the General Contractors Association of New York. Also participating in a panel on the MTA capital program and transit funding were Citizens Budget Commission President Carol Kellermann, NYU Rudin Center for Transportation Director Mitchell Moss, former NYC Economic Development Corporation chief Seth Pinsky (now with RXR Realty), and CUNY Institute for State and Local Governance Chair Marc Shaw.

Debt levels at the MTA have skyrocketed as capital programs have grown while state and city funding has shrunk. Borrowing costs consume an ever-greater share of the agency’s operating budget, contributing to higher fares and less service for riders. “Continuing to the load the MTA up with debt is dangerous,” Pinsky said. “We do need to talk about new sources of revenue.”

One potential source is the city’s own capital budget. Under Ed Koch, the city chipped in $200 million annually. Under Giuliani, the city cut its contribution down to $100 million. The number has stayed steady ever since. The MTA’s new capital plan assumes the city’s annual contribution will increase to $125 million, and Shaw, a former Giuliani budget director, was bullish that the city would commit to it. If it does, an extra $25 million in cash per year is still just a drop in the bucket when it comes to the capital plan’s budget gap.

Pinsky, the former NYC EDC president, sees potential in the real estate sector. Local governments could levy special taxes on development near transit — a strategy known as value capture — both in the city and around suburban rail stations, which he said are too often surrounded by a “sea of parking” in areas that could serve as vibrant downtowns.

Investing in transit by tapping the increased value of real estate has promise, but the devil is in the details, and it hasn’t always worked well in New York. Kellermann pointed out that development at Hudson Yards, which was supposed to pay for the 7 train extension, has been lackluster, leaving city taxpayers to pick up the tab. And even if the value capture mechanism is calibrated perfectly, she said, it can’t bridge a $15.2 billion gap.

Kellermann suggested the cost of a MetroCard should go up to help fill the gap, on top of back-to-back four percent fare hikes already scheduled for 2015 and 2017. She also thinks drivers should pony up. “There needs to be a lot more money contributed by auto users,” she said. “I wouldn’t give up on the East River tolls. The Move New York plan is a good start.”

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Livable Streets Progress in Albany Will Have to Go Through a GOP Senate

Andrew Cuomo may have won re-election, but New York was no exception to the national Republican wave in yesterday’s elections. The GOP regained control of the State Senate, weakening its bond with the Independent Democratic Conference and keeping mainline Democrats in the minority. With last night’s results, the landscape for transit and livable streets legislation in Albany has shifted.

Dean Skelos, right, is back as the sole leader of the State Senate. What will it mean for the MTA? Photo: MTA/Flickr

Dean Skelos, right, could come back as the sole leader of the State Senate. What will it mean for transit in NYC? Photo: MTA/Flickr

Republicans now have 32 of 63 seats in the State Senate. They gained control by ousting three upstate Democrats and losing only one seat, in a tight three-way Buffalo-area race. The balance of power no longer rests with the breakaway IDC, which formed a power-sharing agreement with Republicans. Leadership of the Senate could be consolidated next session in Dean Skelos of Long Island, who currently splits control with IDC leader Jeff Klein.

With Republicans in the majority, NYC’s two GOP senators — Martin Golden of Brooklyn and Andrew Lanza of Staten Island, who both won re-election last night – will be key for any street safety legislation affecting the city. Golden initially resisted speed camera legislation earlier this year, though he ultimately voted for the bill. Lanza is best known to Streetsblog readers for refusing to allow flashing lights on Select Bus Service vehicles.

The rest of the statewide political landscape did not change much. The Assembly will remain in the hands of Democrats, led by Speaker Sheldon Silver. Silver and Skelos will return to Albany next year with Comptroller Tom DiNapoli, Attorney General Eric Schneiderman, and Governor Cuomo, who all secured expected victories over Republican challengers.

The most pressing transportation issue facing Cuomo, Silver, and Skelos — the proverbial “three men in a room” — will be closing the $15.2 billion gap in the MTA capital program.

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Highlights From Today’s City Council Transportation Infrastructure Hearing

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Transportation Commissioner Polly Trottenberg, center, with NYC DOT deputy commissioners Bob Collyer, left, and Joseph Jarrin, right.

Today, the City Council transportation and economic development committees held a marathon joint hearing on New York’s transportation investment needs. Top staff from the MTA and NYC DOT, including Transportation Commissioner Polly Trottenberg, fielded questions from council members for the better part of the day.

Here are some highlights:

  • Council members Jimmy Van Bramer and Julissa Ferreras both asked for more bike lanes in their Queens districts. “We are striving to build out the bike infrastructure in all five boroughs,” Trottenberg said, ”and we have a couple of really big projects planned in Queens.”
  • Van Bramer also pushed for more details on when the delayed Pulaski Bridge protected bike lane would open. Deputy Commissioner Bob Collyer said the project’s contractor received final sign-off from DOT two weeks ago and will release a construction timeline soon. Collyer expected the bikeway to be complete sometime this spring.
  • Bus Rapid Transit also came up during today’s hearing. Responding to a question from Council Member Donovan Richards, a vocal proponent of BRT on Woodhaven Boulevard, Trottenberg said the city is speaking with U.S. DOT about securing funds for street redesigns that feature full-fledged BRT.
  • Not all council members were as enthusiastic about BRT. I. Daneek Miller questioned the wisdom of Select Bus Service between Flushing and Jamaica, which led Trottenberg to say the project is “not written in stone.”
  • Trottenberg said the mayor’s housing plan demands coordination between new housing and transportation infrastructure, and that BRT on the North Shore of Staten Island should be accompanied by zoning changes near stations to maximize ridership.

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Citizens Budget Commission: MTA Capital Program Must Change Course

The fight over how to fund the MTA’s next capital plan is just starting to heat up, with worries over disappearing federal dollars, ever-expanding debt, and proposals for new revenue sources. Before the funding discussion gets going in earnest, a new report from the Citizens Budget Commission [PDF] begs the region’s transportation policymakers to take a step back and consider a more fundamental question: Does this plan prioritize the right things?

A new report raises concerns about the MTA's commitment to state of good repair projects. Photo: Gerhard Bos/Flickr

A new report raises concerns about the MTA’s commitment to state of good repair projects. Photo: Gerhard Bos/Flickr

CBC offers some harsh, if unsurprising, words for the MTA. The think tank says the authority isn’t focused enough on state of good repair and modernization, and instead pours too many resources into poorly-managed system expansion. CBC says the authority doesn’t have a clear process for selecting which of the region’s many worthy transit expansion projects move forward. Once a project is underway, the MTA has a poor track record for keeping costs and construction schedules under control.

The report has three main points: The authority is systematically scaling back its state of good repair targets and investments, is not investing enough in signal upgrades that could boost capacity on existing train lines, and needs to rethink its approach to large system expansions.

The report’s most damning conclusions raise questions about the MTA’s “declining ambition” to keep the transit network in a state of good repair. Looking at previous capital plans and the “needs assessment” documents that precede them, CBC found that the MTA is failing to meet many of its state of good repair targets from previous capital plans, and has lowered its investment targets in more recent documents. “The needs assessment set a low bar,” the report says, “and the approved plan does not meet even that low bar.”

Echoing a report from the Regional Plan Association earlier this year, CBC also urges the MTA to pick up the pace of investment in Communication-Based Train Control, which upgrades signals to allow for more frequent trains. The L train already has CBTC; installation is underway on the 7 train, and the Queens Boulevard subway is next. Despite the big benefits CBTC can bring to system capacity and operations, it’s proceeding at a snail’s pace.

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DiNapoli: If Cuomo Borrows More for the MTA, Get Ready for Fat Fare Hikes

Without a commitment from the state to close the $15.2 billion gap in the MTA’s capital program, the cost of a MetroCard is likely to spike as the MTA adds to its cumbersome debt load, according to a new report from Comptroller Tom DiNapoli [PDF]. The warning comes as Governor Andrew Cuomo and the legislature begin the very early stages of negotiations over funding the capital plan, which maintains, upgrades, and expands the transit system.

Is he listening? Debt is at record levels. Without new revenue, it will go up even more. Photo: MTA/Flickr

MTA debt has skyrocketed and without new revenue, it will consume even more of the agency’s budget. Does Cuomo care? Photo: MTA/Flickr

By some measures, the MTA is doing well: Ridership is reaching new highs, the authority is making progress on cost savings, and an improving economy has buoyed its finances. But there’s trouble around the corner: Labor and health care expenses are already rising faster than the MTA can pay for them even as new labor deals pile on more costs, federal funding is questionable, debt is at record levels, and the next capital plan is only halfway funded. Without new sources of revenue, issuing more debt to pay for system upkeep and expansion will translate into more fare hikes.

The authority is already planning on issuing $6.2 billion in debt for the next capital plan. Even with that borrowing, there’s still a $15.2 billion gap. Without action in Albany to bring in new revenue, the MTA will likely do what it did last time: Cut the capital program while issuing even more debt. That means fare hikes.

Fares are already scheduled to increase faster than inflation, with back-to-back four percent hikes scheduled for 2015 and 2017. If the MTA has to issue more debt to pay for the capital program, DiNapoli calculates that riders should expect an additional 1 percent hike for every $1 billion borrowed.

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Trottenberg: Federal Cuts Could Make MTA Funding Gap Even Bigger

Transportation Commissioner Polly Trottenberg said today that the MTA is making “optimistic assumptions” about federal funding as it plans its next five-year capital program. The agency has identified only half the funds to cover the projected costs of the plan, which maintains, upgrades, and expands the transit system. At a panel with top-level city agency heads this morning, Trottenberg, who sits on the MTA board, warned about a possible cut in federal support, which would further widen the funding gap.

Are the doors closing on federal transit funding? Polly Trottenberg says Andrew Cuomo's MTA is too "optimistic" about the feds paying for the capital plan. Photo: MTA/Flickr

Polly Trottenberg said Andrew Cuomo’s MTA is too “optimistic” about the feds paying for the capital plan. Photo: MTA/Flickr

A drop in federal funds would supposedly increase pressure on Governor Andrew Cuomo, who controls the transit authority, to support new sources of revenue. So far, the governor has opposed any new revenue for the MTA.

This morning’s panel, which kicked off the annual meeting of the American Planning Association’s New York Metro chapter, featured Trottenberg, City Planning Commission Chair Carl Weisbrod, HPD Commissioner Vicki Been, and EDC President Kyle Kimball. It was moderated by Regional Plan Association Executive Director Tom Wright.

Trottenberg, who was a top U.S. DOT official before moving to NYC government, questioned the assumptions the MTA is making about the federal contribution to its capital program. “At the moment, they have half the funds in hand,” she said. “I’m not even quite sure that they have that money in hand, because it does make some optimistic assumptions perhaps about what’s happening at the federal level.”

After the event, I asked Trottenberg why she thought the MTA’s assumptions are optimistic. She took a long pause before answering. “There is a big question mark about what the federal funding picture is going to look like in the next few years, and understandably when you’re doing a capital budget you have to take a guess at a number,” she said. “But I think there’s a chance that the feds are going to be even less supportive on the transit front than they have been in the past.”

Many political analysts expect Republicans to gain control of the Senate in November, which could disrupt the current stasis in federal transportation policy.

While Trottenberg raised the possibility of a decrease in federal support for transit, the MTA expects those funds to remain steady [PDF].

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It’s Cuomo vs. Transit Experts on MTA Funding

Yesterday, Governor Andrew Cuomo called the region’s transit investment plan “bloated” and rejected calls for new revenue. Today, MTA Chairman and CEO Tom Prendergast, speaking at a forum on best practices in regional transit governance, hammered home the need for elected officials to find new money to fill the half-funded capital plan’s $15 billion gap.

The MTA's boss isn't terribly interested in funding transit. Actually, he called the capital plan "bloated." Photo: MTA/Flickr

The MTA’s boss isn’t terribly interested in transit investments. Actually, he called the capital plan “bloated.” Photo: MTA/Flickr

“This is the start of a process. This is the start of a dialogue,” Prendergast told reporters when asked about the governor’s comments. He refused to agree with the governor’s assertion that the capital plan should be trimmed, and indicated that without new funding, the MTA would resort to increasing its debt load above already record levels. “I don’t like greater debt finance, but I’ll tell you what,” he said during the panel, “I’ll treat that finance as a bridge to another day.”

Today, debt service eats up an ever-greater share of the authority’s budget, with the MTA spending almost as much in debt service as it does to operate Metro-North and Long Island Rail Road service combined. During his comments yesterday, Cuomo also repeated his rejection of toll reform or other new sources of revenue to help fill the capital program’s gap and reduce the MTA’s reliance on debt.

“At some point the interest payments on MTA debt are going to completely implode any capacity to do anything for the MTA going forward,” said Chris Ward, Dragados USA executive vice president and former Port Authority executive director. “The toll structure has reached [the end of] its useful life,” he said. “Public transit is going to have to face, fundamentally, a question of funding, and what the mechanisms are going to be.”

The panel this morning, hosted by the Eno Center for Transportation, TransitCenter, and the Regional Plan Association, marked the release of a new report examining the governance of regional transit systems in New York, Boston, Chicago, San Francisco, Dallas, and the Minneapolis-St. Paul area [PDF].

While panelists noted that New York often serves as a model for other systems, the MTA came in for serious criticism on the way it is governed by its board members and the governor who appoints them.

New York’s governor calls the shots with state authorities, noted Robert “Buzz” Paaswell, director of the University Transportation Research Center at City College. During a training for board members of state authorities, Paaswell asked them if they would disagree with the governor if his wishes contradicted the best interests of the authority. ”Ninety percent of the board members would say, ‘I would do what the governor says; he appointed me,’” he said. “Even if that goes against the interest of the authority.’”

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