Streetsblog New York City

New York’s infrastructure is dangerously underfunded and threatening to cripple the region’s economy, warned former lieutenant governor and MTA chairman Richard Ravitch in a speech on Thursday.

Having taken the helm of the transit authority in 1979, at the system’s absolute nadir, Ravitch knows a thing or two about what it takes to bring the MTA back to fiscal health. Unlike in the 80s, he said, what’s missing today is leadership from the business community and the governor’s office.

In the early days of Ravitch’s tenure running the MTA, as he tried to pass the agency’s first five-year capital plan and start rebuilding the system, he needed the authorization of the state legislature. “The Republican State Senate had a very difficult time,” Ravitch recalled. (Ravitch did note that, at the time, “the senators from Long Island were all for it.” Today, Long Island senators like Lee Zeldin and majority leader Dean Skelos have led the fight against transit funding in the form of the payroll mobility tax.)

The turning point in winning over the Republicans, he said, was a phone call to Chase Bank CEO David Rockefeller, whom Ravitch asked to accompany him on a 5 a.m. tour of the subway system. When Rockefeller said yes, Ravitch pressed his luck and asked him to invite the chairmen of MetLife and AT&T as well. All three showed up for the tour, where they observed crumbling tracks and aged subway cars. Recalled Ravitch, “David Rockefeller called Warren Anderson, who was the majority leader of the State Senate, and said ‘Give Ravitch what he wants.’”

The business leaders of today, Ravitch argued, lack the public spirit of that earlier generation, and he expressed little optimism that they would eventually become advocates for the infrastructure of their city. “Their preoccupation on the whole is, honestly, keeping the Bush tax cuts, keeping the government from regulating them and making sure they’re too big to fail,” said Ravitch. Indeed, who has heard current Chase CEO Jamie Dimon ever mention the MTA?

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Lieutenant Governor Richard Ravitch opens his new report on transportation funding in his characteristically blunt fashion:

“New York State currently lacks the revenues necessary to maintain its transportation system in a state of good repair, and the State has no credible strategy for meeting future needs.”

It doesn’t get any cheerier from there.

Faced with aging infrastructure and saddled with billions in debt, both the MTA and the State DOT are staring down impossible deficits. Without billions more dollars over the next few years, New York will watch as its trains begin to grind to a halt and its bridges collapse. A crisis of that scale demands similarly aggressive solutions, and Ravitch pulls no punches. He calls for not only tolls on the bridges into Manhattan, but on all major bridges and highways in the state, as well as special tax districts for particular mega-projects and potentially controversial reforms to the planning process.

Ravitch starts by laying out just how bankrupt the state’s transportation system really is. The MTA, of course, has a $10 billion deficit in its $28 billion capital plan over the next three years.

Over at the DOT, the current capital plan is already so shorn back that it only repaves or reconstructs 2,000 lane miles a year, when it would need to repair 3,500 each year just to stay in a state of good repair. For it to meet that modest goal, the DOT needs at least another $8 billion.

Taking out the bonds to pay for those capital plans would require $600 million in new revenue for the DOT and $700 million for the MTA each year, according to Ravitch’s estimates.

It’s worth following Ravitch into the depths of each budget crisis, to understand how things have gone so awry. The chief culprits: irresponsible borrowing and dangerous budget gimmickry.

“Between 2000 and 2008, the MTA nearly doubled its debt burden from $13 billion to $24 billion,” writes Ravitch. Not only didn’t the state find the revenue for that borrowing, it backloaded the bonds, adding to the total cost in order to push back payments into the 2020s and 2030s.

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With Governor Paterson's political career flaming out in spectacular fashion, speculation is rampant that he might step down any day, thrusting Richard Ravitch into New York state's executive office.

Ravitch would inherit a budget crisis of epic proportions and a state capital that was already in utter disarray. The potential succession would also elevate a former MTA chair with no future political ambitions, at a time when transit funding is in dire straits and no one in Albany seems inclined to face up to the problem.

Consider this an open thread for predictions on how the next few weeks and months will play out in Albany. I'm dying to see who's going to be Ravitch's lieutenant governor.

The ballroom of the Waldorf Astoria is packed right now for the RPA's 2009 Regional Assembly, where Richard Ravitch just accepted a lifetime achievement honor. Many luminaries from the worlds of transportation, planning, and politics are here, and I've got a few minutes to post some interesting exchanges from earlier in the day, so here goes.

At a morning workshop about the challenges to funding transit during an economic downturn, Ravitch spoke about the current impasse in Albany that's putting New York's transit system at risk:

The difficulty, politically, in my judgment, is very obvious. There are very few short-term dividends, for people who run for office, in long-term investments. They don’t get the benefit out of it. It doesn’t have the same electricity to it as keeping the fare low. The benefits may not be realized until future generations. That is a political problem.

People are going to have to bite the bullet, in terms of usage charges and various taxes that will generate the revenue streams we need in order to build.

Congressman Jerrold Nadler, who served in the state legislature when the MTA was emerging from the financial catastrophe of the 1970s, added this perspective:

The 1970s crisis allowed us in the 80s to put new revenue streams in place and implement the original MTA capital plan. We had the ability to do these things because people remembered the bad times. But then you start to get complacent.

The politics in the legislature is more difficult now than it used to be. The Senate has switched parties; Republicans would like it to go back the other way. The Republicans won’t vote for anything and the Democrats can't unite. The only way around that, frankly, is for a few Republicans to step up to the plate. How do you do that? The leadership could step up and do a deal. It takes delicate political negotiating behind the scenes, and whether the public-spiritedness is there, I’m not at all sure.

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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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The MTA's doomsday scenario came closer to fruition today, as agency board members took a step toward implementing planned fare hikes and service reductions while state lawmakers appeared mired in stalemate. Here are a few tidbits.

Newsday filed this report on the MTA Finance Committee meeting (as live-blogged by Second Avenue Sagas), where members voted to recommend revenue-saving measures to the full board, now set to make its decision on Wednesday:

MTA board chairman H. Dale Hemmerdinger urged the agency's finance committee to adopt the fare hikes and service cuts even though he called them "horrific."

"This represents as good a job as human beings can do to divide the pain as equally as we can," he said.

The vote took place as state lawmakers in Albany sought to reach a compromise on a bailout plan that would avoid the worst of the planned fare increases and service cuts.

At a news conference after the committee vote in Manhattan, Hemmerdinger was asked if he had any message for Albany. He said, "How about: 'Help!'"

In Albany, Governor Paterson engaged in what Liz Benjamin of The Daily Politics described as "a game of political chicken" when, flanked by a silent Malcolm Smith and Sheldon Silver, he urged the MTA to go ahead with higher fares and service cuts without waiting on assistance from the legislature.

"Delaying action, to me, would just ring too true to what's gone on in Albany too many times," Paterson said. "I'm not in favor of delaying any action that was scheduled."

In Fare Hike Four news, Senator Hiram Monserrate was indicted for allegedly stabbing his girlfriend with a drinking glass last December. If convicted, Monserrate faces seven years in prison -- and, says one City Room commenter of today's developments, "will probably guarantee his re-election."

Here’s one little problem with the Kruger, Diaz, Espada, Monserrate MTA financing plan: They got the math wrong.

The State Senators (for convenience sake, let just refer to them "The Fare Hike Four" from now on) say they can satisfy the MTA’s short-term financing needs with a four percent fare and toll hike and a small payroll tax increase. The MTA says that math doesn’t work, according to Reuters:

The MTA’s chairman, H. Dale Hemmerdinger, estimated the
Senate plan would force the agency to raise fares and tolls by
17 percent — about four times more than the Senate calculated
– as it would only raise about $1 billion more.

I suppose it comes down to a question of who do you trust more with the numbers, Richard Ravitch or four venal, old pols in the nation’s most dysfunctional state legislature? If that’s a tough call for you, then it’s probably worth noting that Ravitch spent considerably more time working out his financing plan than did The Fare Hike Four. As Kathy Wylde at the Parternship for New York City says:

The State Senate has had almost a year to join the public discussion of funding for the transportation system. They waited until the very end of the process to come forward with a proposal that provides not a nickel for system maintenance and badly needed expansion of bus service, let alone a full capital program. It is time for both sides of the Senate — Democrat and Republican — to join the Governor and the Assembly in support of some version of the Ravitch Commission Plan.

There's MTA rescue news today from the State Senate, and none of it good. 

Queens Senator Hiram Monserrate, who had considered new tolls on East and Harlem River bridges acceptable as a "last resort," has flip-flopped. The Daily Politics reports that Monserrate now opposes new tolls, and faults the MTA for "failing to explain 'specifically' how toll revenue would be used to pay for service and capital improvements." From a statement released today:

"Solving financial problems on the backs of hard-working New Yorkers now struggling with their own financial problems is the least desirable course of action," the senator stated.

"Tolling of the East River bridges should be considered only after passage of the 'Millionaire's Tax' that will ensure the wealthiest residents of New York pay their fair share."

"For these reasons, support of the so-called 'Ravitch Plan' is not in the best interests of New Yorkers."

Monserrate presides over a district where 53 percent of presumably hard-working households do not own cars and rely on transit, while less than five percent drive or carpool into Lower Manhattan for work. Still it looks as if his own windshield perspective has clouded his judgment enough that he would abandon the only viable plan in existence for a proposal that is positively Weiner-esque in its implausibility.

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As Albany lawmakers ponder which of a half-dozen Ravitch plan variations they might support, the possibility looms that no solution may come in time. New Yorkers could see their fares rise 25 percent while service is cut back -- a twin catastrophe in this tough economic time. Yet no big new ideas are being advanced to protect mass transit users, which is why I believe the time has come for consideration of Ted Kheel’s and my traffic plan.

Our plan rests on three powerful attributes: revenue generation, tolling equality, and sheer efficiency. We achieve these with an inclusive pricing model that asks drivers to pay a fee ranging from $2 to $10 upon entering the Central Business District with the price dependent on the time of day, and charges taxi passengers for their contribution to congestion as well.

The basics:

• Our toll plan generates $1.7 billion a year in revenue; that’s twice as much as the $800 million from Ravitch’s tolls, even though our top toll of $10 matches Ravitch’s $5 (we charge inbound only). As for Sheldon Silver’s $2 toll plan, it nets just $450 million.
• Our plan has no free riders; oops, make that free drivers. Jersey drivers pay the toll, drivers entering the CBD at 60th Street pay the toll, and Manhattanites pay the lion’s share of a 33 percent taxi fare surcharge that raises a quarter of our total revenue. Under the Ravitch and Silver plans, East River drivers who make only 36 percent of crossings into the CBD would be coughing up 60 percent of new toll revenues.
• Everyone wins something in our plan. Buses are free (paid for by $800 million of our $1.7 billion revenue pot). Straphangers get deep off-peak discounts (paid for by the rest -- though some of the reductions might need to be deferred to help stanch the MTA deficit) and a bit more elbow-room in rush hour due to peak-spreading. Drivers get a 20 percent traffic speed-up in the CBD (faster travel “upstream” too), while the variable toll offers a measure of choice.
• Free and faster-moving buses will achieve three goals. They’ll lure enough drivers and straphangers out of gridlocked streets and packed trains to ease crowding on both. By stopping drip-torture boarding that halts movement during Metrocard-swiping, they’ll traverse their routes fast enough to handle the influx. And they’ll provide a huge break to riders across the city, a disproportionate percentage of whom live in poorer, non-Manhattan neighborhoods.

Too good to be true? No, it’s real, the numbers have been checked and re-checked, the plan works.

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Included on the State Senate's "MTA Ideas" web site is a PDF of the governor's proposed MTA bailout plan. It is a huge bill which generally seems to echo the proposals made by the Ravitch Commission. Streetsblog will summarize the proposal as soon as we can digest its 78 pages. In the meantime, please share your impressions in the comments.