Streetsblog New York City

David Paterson has nominated Jay Walder to the top post at the MTA, a selection welcomed by transportation advocates who hailed his expertise and accomplishments today. Walder brings to the job several years of executive experience at large transit agencies, including 12 years at the MTA spanning the 80s and 90s, and a recent six-year stint at Transport for London. Walder still needs to be confirmed by the State Senate, which is slated to meet in an extraordinary session tomorrow.

While in London, Walder earned praise for putting the transit system on sound financial footing. (Note that the city's congestion charge took effect in 2003, while he was finance director at TfL.) To do the same for the MTA, he has his work cut out for him. He assumes the chairmanship at a perilous time for the agency's finances. The state legislature's latest transit funding package left a huge hole in the MTA's capital program, a shortfall of at least $20 billion which Albany will have to address very soon.

"Jay Walder has the experience and credibility that the MTA will require to survive these challenging fiscal times," said RPA President Robert Yaro in a statement. "He'll need all of his many skills to navigate the roiled political waters in Albany."

Transit riders will be well-served if Walder can manage to drive the media narrative about the MTA more successfully than his predecessor, Lee Sander. It's a tall order. Casting aspersions on the MTA is a favored tactic for legislators looking to deflect blame for their own lack of leadership on transit policy, and the press corps often appears to serve as a willing accomplice. The riding public needs someone who not only manages the agency capably, but also shapes the MTA's public image as deftly as possible.

Former MTA CEO Lee Sander spent the last two-and-a-half years doing his best to make the MTA a transparent, accountable public agency, and in doing so restore its reputation. He let the sunshine in, but was unable to undo the damage to the agency's image caused by years of attacks from transit advocates, unions and politicians.

In politics, reputation matters. The scapegoating of the MTA has undermined the political case for transit funding and given cover to the hypocrites in Albany who blame the MTA, instead of themselves, for the agency's funding woes. Looking forward, it is critical that the MTA burnish its reputation as an effective and accountable public agency and excellent investment for public funds. There are many political forces that benefit from keeping the MTA as a scapegoat, its reputation besmirched. So, a clean bill of health for the MTA requires an unimpeachable, politically formidable force far above the gutter of the New York political fray. How about President Obama?

The president has spent enormous energy restoring public confidence in the banking system. A key part of his efforts has been the Treasury Department’s careful scrutiny of bank management and finances. Mayor Bloomberg and Governor Paterson should ask President Obama to help restore public confidence in the MTA by ordering the Federal Transit Administration to send in a team of management, finance and policy experts. The MTA receives millions in federal support and the U.S. government has a strong interest in seeing that money well spent. The FTA team would definitively and publicly assess the state of the MTA, detailing both its good and bad management practices while clarifying and vetting agency finances.

Most transit experts believe the MTA is a relatively well run public agency which compares favorably with other big American and foreign transit systems. The agency’s biggest problem is that the state and city have spent the last two decades reducing their financial support, loading the agency with debt, and making it overly dependent on volatile, cyclical funding like the mortgage recording tax. The FTA's assessment would bring these facts to the fore and lay the political groundwork for a stronger case for transit funding.

From the MTA press office:

Governor Paterson today accepted the resignation of MTA Executive Director and Chief Executive Officer Elliot G. Sander. Mr. Sander offered his resignation to the Governor earlier this year in anticipation of yesterday's passage of legislation that joins the Chairman and CEO positions at the MTA. Mr. Sander's resignation is effective May 22, 2009, ending a tenure that began January 1, 2007.

It's no surprise that Sander would be sacrificed, as rumors had been circulating for months that Governor Paterson was looking for a change. Regardless of Sander's achievements during his two-year tenure, WNYC is reporting that Paterson earlier today announced the need for a "leadership shake-up" due to the public's lack of confidence in the agency.

Despite the feckless performance of Paterson and his Albany cohorts during the doomsday debacle, and the short-sighted deal that resulted, we assume the governor managed to keep a straight face.

Follow the jump for the rest of the MTA release.

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Now that Governor Paterson has backtracked on his pledge to secure a long-term solution to New York's transit funding crisis, the push is on to spin the slapdash result as a responsible outcome, not a capitulation to Albany's lowest common denominator.

Courtesy of Liz Benjamin, here's Senate Majority Leader Malcolm Smith emerging from last night's closed-door session with the two Long Island legislators who will presumably give him the 32 votes needed to pass a bill:

I think it is a tribute to them, and a tribute to this Democratic conference. Reform is what everybody wanted. Everybody said that you should have a legislature where the rank-and-file members have a right to speak their mind, and have input -- and not only have input but get some results.

Never mind that all the negotiating for this deal took place behind closed doors. Or that the plan Smith's conference concocted does not reduce the MTA's dependence on debt financing. Or that the band of senators who derailed the viable plan drawn up by the Ravitch Commission are the same group who held the Democratic takeover of the Senate hostage last year, in return for more lucrative and powerful committee chairmanships.

Sure, rank-and-file legislators need a more open, transparent process in Albany, but letting the Fare Hike Four dictate the agenda hardly qualifies as reform, or sound policymaking.

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The mayor's office just released a statement insisting that the MTA financing plan address the transit system's long-term needs:

As discussions for a permanent funding plan for the MTA continue, stop-gap measures that kick the big problems down the road must be rejected. For any plan to truly meet the needs of the metropolitan region’s people and our economy, it must include stable, reliable funding for capital projects.  Our transportation infrastructure is aging, and expansion projects are absolutely critical to keep New York City and the surrounding counties moving forward. We must invest in the system, even during economically difficult times, or buses, railcars, stations, signals and tracks will fall into disrepair and commuters will suffer -- just as happened in the 1970s.

There is no painless option, but the issues will be no simpler a few months from now than they are today, which is why Albany must find a permanent stream of funding for capital projects -- not next fall, but right now.

I called the mayor's press office, and they don't appear ready to get more specific than this. It's fairly clear, however, that Bloomberg does not approve of Governor Paterson's new direction.

He also raises a good point about timing. With contractors competing intensely during the recession, state DOTs across the country are getting deep discounts on stimulus-funded road projects. Shouldn't New York City's transit system get in on the construction bargains while we have the chance?

If you want to pass that message on to our leaders in Albany, follow the jump for some key email addresses.

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We're getting dangerously close to transit Armageddon.

Seeking a quick resolution to the MTA funding crisis, Governor Paterson lobbied over the weekend to get a Band-aid fix through the State Senate. The problem is, Paterson's plan provides no resolution at all. Fundamental details of the proposal are still sketchy, even as the governor pushes for a vote as soon as today, but there's no doubt that the numbers don't add up to a healthy transit system. Consider:

• The revenue streams in Paterson's plan keep shrinking while the MTA's operating deficit keeps growing, meaning that further fare hikes and service cuts will be necessary in a matter of months.
  
• All indications are that the latest proposal would direct zero dollars to the MTA capital plan, the five-year package of maintenance and expansion projects that is still completely unfunded.
  

By pushing for a stopgap measure on the Senate Democrats' terms, Paterson has effectively abandoned the framework laid out by the Ravitch Commission. His proposal does not share the funding burden equitably -- car commuters pay nothing to keep congestion-busting trains and buses running. Nor does it address long-term funding needs, risking system-wide decline by leaving even routine maintenance unpaid for.

Observers are in the dark about the most basic aspects of the governor's proposal, like how much it would raise in total. Does the plan still fund upstate roads and bridges with a surcharge on New York City cab fares? Will service cuts still be necessary even if this plan passes? It's hard to tell when all the discussions take place behind closed doors.

Advocates aren't pleased. The Empire State Transportation Alliance -- a coalition representing business, labor, and environmental groups -- released a statement yesterday stressing the importance of funding the MTA capital plan now, not just passing a temporary fix. 

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Heading into the weekend, Governor Paterson is still keeping a tight lid on exactly how he plans to handle the MTA's huge funding shortfall. Lately, Paterson has taken to joking about this crisis by saying that "light bends around Albany" -- a not-so-veiled reference to Senate Democrats and their closed-door machinations. I first heard the line a few weeks ago at the RPA Regional Assembly, where we all laughed and ate up the governor's act.

Well, now it's the governor himself who's left everyone in the dark. He's been dropping hints for days that he has some plan that will win enough votes to clear the Senate, giving no specifics. This is ominous, to say the least. And it makes all those Paterson barbs about statehouse dysfunction seem like so much hypocrisy.

The leaks that have dripped out so far don't inspire confidence in the governor. Desperate for some development that he can claim as a victory, might he opt for "Deferred Armageddon" -- financing even the MTA's day-to-day operations with borrowed money? If so, the doomsday disaster unfolding today would pale in comparison to what such a plan would set in motion, as more and more of the MTA's budget gets swallowed up by debt payments. Sounds crazy, right? It also sounds like the kind of "plan" that someone itching for a comeback in the polls would try to keep under wraps as long as possible. 

A year ago, Paterson signaled that he was serious about putting the transit system on solid footing when he chose Richard Ravitch to head the commission on MTA financing. When Ravitch's commission unveiled its proposals last November, Paterson said, "The ways in which responsibility may have been shirked, or ignored, in the past, to live for another day -- that day has come, and we're going to have to make those tough choices."

Now is no time to walk away from that commitment.

Let's recap the last week of the MTA funding saga. On Monday, Malcolm Smith and the Senate Democrats introduced a "conversation starter" bill that had already been lambasted as insufficient and backwards. On Tuesday, the MTA finance committee announced that revenues from taxes and fares have plummeted deeper than expected, turning the $1.2 billion doomsday budget gap into a $1.8 billion chasm. On Wednesday, Governor Paterson claimed that he had "some new ideas" to break the legislative impasse. Yesterday, some Paterson staffers started to let slip what the governor had in mind, and today we woke up to the big news.

The governor's "new" solution is to cave to the Senate Dems.

According to multiple reports, Paterson is prepared to accept the framework laid out by Senate Majority Leader Malcolm Smith, and dilute the proposed revenue streams even further by granting some payroll tax exemptions and halving the surcharge on cab fares.

How it all adds up to a healthy transit system is a complete mystery. Even without the watered down provisions, the plan on the table in the Senate only generates $1.76 billion per year. That sum was supposed to cover the MTA operating deficit, its five-year capital plan, and a five-year road and bridge program for all of New York State. Well, now we know that it will take more money than that -- $1.8 billion -- just to keep the trains and buses running. So what's it going to be?

One option -- let's call it "Armageddon" -- would be to spend all the revenue to plug the MTA operating deficit. No money for maintenance or expansion. The system spirals into 1970s-style decrepitude and the region's economy goes in the tank for the foreseeable future.

Another path -- how about "Deferred Armageddon" -- puts it all on a giant credit card. The MTA capital plan, roads and bridges, AND transit service. Bond every cent of the new revenue streams and borrow to pay for everything -- even the day-to-day operations of the MTA. Taxes and fees collected in the MTA service region pay for the whole state's transportation system, and in five years, we face the mother of all transit crises. (The Post thinks this is where we're headed.)

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A Monday editorial from Crain's questioned the wisdom of sacrificing MTA head Lee Sander as part of any transit rescue plan, as rumors swirl that Governor David Paterson wants Marc Shaw to return to the agency's top spot.

While making the seemingly obvious argument that maintaining a healthy transit system is vital to the region's economy, the piece (behind the Crain's pay wall) lays blame on the Pataki administration -- during which Shaw previously served as MTA CEO -- for having "loaded up the MTA with debt that’s now coming home to roost."

[Sander] has become a target for those who believe the MTA is bloated and wasteful. In truth, Mr. Sander has wisely streamlined operations and cut costs in his two years in the post. He hasn’t solved all of the MTA’s problems. Who could in such a short time? And he hasn’t been the most effective politician in selling what he has done. But is that really a fault? Shouldn’t the job go to a seasoned transportation professional rather than a politician?

We asked MTA spokesman Aaron Donovan about cost-cutting measures initiated under Sander. The list is pretty extensive. Donovan points to the following efficiencies imposed "even as demand is at levels not seen since the early 1950s": elimination of 410 administrative positions; establishment of Regional Bus Operations, merging three companies into one; creation of a Business Service Center to "consolidate duplicative back office functions"; assignment of managers to oversee individual subway lines; formation of a blue-ribbon panel to "encourage competition and increase bidding on capital construction projects"; and increases in advertising revenue "from $38 million in 1997 to $125 million in 2008."

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It seems like only yesterday that the three men emerged from their room with vague talk of an emerging scheme to spare transit riders -- temporarily, at least -- the pain of fare hikes and service cuts required, minus help from Albany, to keep the MTA afloat. But as the Times reports, a new development would catch the triumvirate flat-footed.

At a meeting later in the afternoon with Mr. Paterson, a group of senators from suburban districts told him they would not support the payroll tax.

The senators were Craig M. Johnson of Nassau County, Brian X. Foley of Suffolk County, and Andrea Stewart-Cousins and Suzi Oppenheimer, both of Westchester County.

"I’m very uncomfortable with the proposed payroll tax," Mr. Foley said later in an interview. "Suffolk County is in the outer ring of the service area. Our businesses would be paying into a system that they don’t get much out of."

Both the Times and Daily News point out that opposition to the payroll tax is not unexpected. Now that it's out in the open, however, lawmakers are reportedly scrambling, with Sheldon Silver suggesting that a "little time out would be helpful." Before the breakdown, everything from higher vehicle registration fees to a 50-cent cab surcharge was said to be under consideration.

Amid the chaos, one thing appears certain. Said a spokesman for Malcolm Smith to the Times: "Everything [is] still on the table 'except tolls.'"