http://politicker.com/2013/05/state-senator-speculates-and-debates-attack-on-black-leaders-corruption-or-conspiracy/

That sort of says it all, doesn't it?

While Obamacare will reduce some of the inequities, it left the most of the complex and inequitable U.S. healthcare finance system in place, and punted much of the responsibility for further progress to the states. Which is not a good thing if you have a corrupt and poorly run state. The only reason New York will have a state health insurance exchange, as mandated by the Obamacare legislation, is that Governor Cuomo somehow was able to get around our parasitic legislature and create one by fiat. Yet there are many abuses that a state could get rid of, if it were not controlled by a legislature whose MO was to allow abuses in exchange for campaign contributions. In a major development, the federal government shined a light on one just last week. I’ll talk about it, and how a more “progressive” (the early 1900s version, not the self-interest group politics of so-called NY “progressives” today) state might respond, on Saying the Unsaid In New York.

I guess members of the general public have no leverage here. We’ll just have to pay more in taxes, and accept less in public services, to give them whatever subsidies they want, and then pay up because any competing food wholesalers seeking to enter the market would not benefit from those subsidies. Mayor Bloomberg would probably give away the store to seal a deal his successor would have to pay for, but the successor would be under even more pressure to show that he or she is not “against the middle class” by losing blue collar jobs. So those not in on any of these deals, I suppose, will have to accept being worse and worse off. Just as when the rich who sit on each other’s corporate boards enrich each other’s pay packages, then demanded a federal bailout when their house of cards collapses. Just as when the federal government had no choice but to run up the debt to prevent that collapse, but now those debts will force those age 55 and younger to lose federal old age benefits. Just as when the politicians and public employee unions cut deals to enrich their pensions, and then demand even more in taxes or service cuts to pay for it. Just as the Yankees demanded their empty parking garage or they would move to New Jersey, and rich threaten to leave town when taxes rise. They’ve got us. They’ve got our children. If you aren’t in the room, you are the victim, and we aren’t in the room. Does it have to be so? I’ll discuss further on “Saying the Unsaid in New York.”

<p>

http://larrylittlefield.wordpress.com/

<!--break--> 

<p>

http://larrylittlefield.wordpress.com/

<!--break--> 

A look at NYC budget documents, however, shows that austerity for the people hasn’t exactly meant less spending by City of New York. According to “Budget Summary” documents from the NYC Office of Management and Budget, in the six years from NY 2008, which ended before the real disaster economic hit that fall, to FY 2014, according to the Mayor’s latest budget proposal, total spending by the City of New York will have increased 20.7%, and personal services spending will have increased 11.8%. New York City’s tax revenues will have increased 16.8%, or less than the increase in spending. Inflation, as measured by the Consumer Price Index with a projection to next July, increased just 12.0%.

The numbers I will be citing come from the Mayor’s Financial Plan, issued early each year, and do not reflect ultimate reality with complete accuracy. The FY 2008 and FY 2011 numbers, for example, are projections made half way through the fiscal year of what the final totals would be. The FY 2014 number is the Mayor’s proposal. This information is less specific than the public finance data I usually use, but that data comes out much later. The latest comparative public finance data from the U.S. Census Bureau I analyzed was from FY 2010. It came out in September 2012. Even that data was subject to further modification after I used it. I’ll be writing about the financial priorities of the Bloomberg Administration in total, in a more final sense, some time in late 2016 at the earliest.

Since the patterns of New York City’s revenues and expenditures are pretty much set by the decisions and deals of the past, however, the city budget numbers can give us a pretty good idea of what has happened and is happening. The Mayor’s budget proposal, in a broad sense, is pretty much what is going to happen, since it involves allocating pain – not what the usual local politician wants to do. The usual dance is for the Mayor to propose a few extra budget cuts, and the City Council to “fight for the people” by “finding” the money to put them back, while assuring access to the little handouts they get to make that in the end matter more to their re-elections that to the people they represent.

The numbers referred to in this post come from the Budget Summary documents from January 2000, p. 48, February 2011, p. 49, and January 2013, p. 40. They are in the spreadsheet in this post on “Saying the Unsaid in New York.” 

In past recessions, New York City and State used gimmicks to defer most of the fiscal pain until after the recession ended. This may be considered a repeating pattern. In the devastating late-1980s/early 1990s downturn, for example, New York City was on the brink of bankruptcy not in 1991, the year with the greatest private sector job loss, but in 1994 as newly-elected Mayor Rudolph Giuliani took office.

Despite the Great Recession, the city’s budget documents show, total spending increased 10.1% in the three years from FY 2008 to FY 2011, during the worst of the it, while personal spending increased 9.9%, and agency “other than” personal service spending (on contracts and supplies) increased 12.2%. Tax revenues increased 9.2% during those years. The Consumer Price Index rose just 4.7%. Pain was postponed as the city and state drained reserves and borrowed money while increasing spending by more than the inflation rate. With a 7.0% property tax increase the city’s tax revenues increased by more than inflation.

Times have been tougher since, but not because total spending has fallen. In the three years from FY 2011 to FY 2014, according to the latest budget proposal, spending will have increased 9.8%. But personal services spending (on NYC employees) will have increased just 1.7% and agency “other than personal services” (on contractors and supplies) will have increased just 0.2%. City tax revenues are expected to have risen 6.3% during the period, or slightly less than the 6.9% rate of inflation. Again, not the big decrease in tax revenues one would expect in association with service cuts. New Yorkers are not paying less to the City of New York.

Part of the reason for the increase in spending during the worst of the recession, and the slowdown in most types of spending thereafter, may be seen on the revenue side (bottom of the spreadsheet), and in “Welfare and Medicaid” outlays. Federal categorical aid (aid for a specific purpose, such as welfare or education) increased by 38.8% from FY 2008 to FY 2011, providing the city with an extra $2.75 billion dollars. This was a result of the federal “stimulus package” passed in early 2009. State aid was essentially unchanged, with a 4.4% increase in categorical aid offset by a near wipeout of unrestricted municipal aid. Moreover, the combination of welfare spending and aid to New York State for its Medicaid program fell by 8.1% from FY 2008 to FY 2011, while city funding for the Health and Hospitals Corporation fell by 12.3%. Not because actual spending on the poor and public subsidies to health care went down, but because the federal government picked up more of the tab for Medicaid through the stimulus package. The same stimulus package that increased aid to New York City, mostly for public schools.

Property tax revenues also increased 29.6% from FY 2008 to FY 2011. In part because the city raised the property tax rate by 7.0%. In part because increases in assessed value phase in over time, allowing the city to reap the benefits of the big increases in property values during the 2000s bubble, in part, after it had ended. NYC homeowners, partially protected from property tax increases by limitations on the increase in their assessments, nonetheless paid more in property taxes. Renters and businesses, without such limitations, paid far more as landlords passed on higher property tax charges to them. For rent regulated tenants, the pass on was part of the changes in landlord costs used to set annual rent increases.

While property taxes were going up during the worst of the recession, personal and business incomes were not, as reflected by the fact that NYC tax revenues other than property tax revenues increased just 0.4% from FY 2008 to FY 2011. Meanwhile, Miscellaneous Revenues, which includes fees and fines, fell 1.1% from FY 2008 to FY 2011. Many have accused the Bloomberg Administration of nickel and diming people with fees and fines, but both long-term data from the U.S. Census Bureau, and more recent projections from NYC OMB, show that isn’t true. But of course the City of New York’s miscellaneous revenues don’t include the toll and fare increases of the MTA, one of the places where New York City and State have shifted their debts over the years.

The city’s debts have soared. Despite historic low interest rates, the burden of repaying them increased 32.9% from FY 2008 to FY 2011 and is projected to rise another 25.3% from FY 2011 to FY 2014. With more to come.

Some of this debt is expected to be paid by others. The money the city borrowed to build three stadiums is expected to be paid by the sports teams. The money it borrowed to build the extension of the #7 Flushing Line to the Far West Side is expected to be paid, eventually, by taxes on development that area. After being stalled by recession, development on the Far West Side is finally moving forward.

By providing an improved quality of life over many years, in fact, capital improvements can attract taxpaying businesses, residents and development, providing the revenues to pay for themselves even without a formal link. In some cases the Bloomberg Administration’s investments in new and improved parks appear to have done so. And some of the current financial debt is a replacement for what was a de facto physical debt left over from the past. Interests on debts associated with the Department of Education, for example, will have increased 85.9% over the last six years of the Bloomberg Administration, according to the budget proposal. This merely monetizes an inherited condition of deteriorating schools with inadequate capacity that is not yet fully remedied.

But some of the debt was used to postpone pain, in this recession and in the prior recession, and will provide no ongoing benefits to New Yorkers. It was just a means to spend the taxes of future New Yorkers in the past. Indeed New York City is still paying for the $billions it borrowed to get past the recession associated with the end of the stock market bubble and 9/11. Despite the mid-2000s boom it didn’t pay that money off, but instead borrowed more.

The bills have begun to come due during the FY 2011 to FY 2014 period, and not just for the City of New York. As I’ve noted before, local government accounts for most of the work of government, with the federal and state governments generally merely passing money on to local governments, to individuals, and to the private sector (as under Medicare for health care). The federal stimulus package expired, and from FY 2011 to FY 2014 federal categorical aid is projected to have increased just 5.6%, or less than the rate of inflation. With the federal government taking in only half of what it is spending more reductions for federal aid to state and local government are likely.

Also in part as a result of the expiration of the federal stimulus program, the city’s welfare and (more prominently) Medicaid aid to New York State soared 18.6% from FY 2011 to the proposal for FY 2014. Aid to the Health and Hospitals Corporation soared 30.1%. In part this increase also represents an increase in Medicaid services to people under Obamacare. But much of it reflects a rising share of services being paid for in city, not federal taxes, rather than more benefits received.

Expect more cuts in federal aid to come, as New York State has been found to have stolen $15 billion in excess Medicaid spending from the federal government. It is stopping the theft, cutting $1.1 billion, and wants its $15 billion back. According to the Albany Times-Union the state’s Medicaid service providers want other services to share the burden of that cutback.

Having raided the MTA and other agencies with supposedly dedicated tax revenues, the State of New York also cut categorical aid to New York City 2.3% from FY 2011 to FY 2014, while finally cutting unrestricted aid to zero. Despite keeping a higher income tax rate on the wealthy, and imposing deep cutbacks in state services, with public higher education his particularly hard. Over the entire FY 2008 to FY 2014 period categorical state aid to New York City increased just 2.0%, far less than the 11.8% rate of inflation for the period. Unrestricted aid was cut 100 percent.

A word here about that lost municipal aid. It may be fair and reasonable for the state to cut of unrestricted aid to New York, a city that has had a stronger than average economy in recent years. Certainly there are upstate cities and rural areas that are more needy. What is not reasonable is that while New York City was cut off, suburban jurisdictions throughout the state, which have both lower poverty rates and higher median incomes than New York City, continue to receive such aid – paid for by New York City taxpayers.

That is redistributing income upward, but no one will say so. Mayor Bloomberg rattles his tin cup and skulks away, while in the State Legislature Sheldon Silver exults in sticking it to the Mayor by hurting the people of the city. And the Governor says “New York City has other sources of income.” Which means that since other parts of the state don’t impose a local income tax on themselves like New York City does, New York City taxpayers should also pay more state taxes so other parts of the state can get more aid.

As for taxes, they increased 10.2% from FY 2011 to FY 2014, as a slowdown in the increase in property tax revenues was offset by stronger gains in other tax revenues, as the economy recovered and more people were employed. Real estate transaction tax revenues, inflated during the mid-2000s bubble but virtually absent during the financial crisis, have returned to normal levels. Miscellaneous revenues increased at the inflation rate. New Yorkers are not being asked to accept less because they are paying less in city taxes.

But thanks to the hit from the State of New York, and the end of extra-ordinary aid from the federal government, along with the cost of past debts, spending on actual city services (as opposed to aid to the state for Medicaid) lagged behind inflation from FY 2011 to FY 2014, as personal services spending is expected to have increased just 1.7% and “other than personal services” just 0.2%.

For a further indication of why services are being cut, moreover, look within the “personal services” category of spending. Total spending on wages and salaries, affected by both the number of public employees and how much they get paid, increased 5.3% from FY 2008 to FY 2011, or more than the rate of inflation. Even as city residents were told to expect less, and public employee union leaders asserted that they deserved less.

But from FY 2011 to FY 2012 spending on the wages and salaries of city employees fell 1.6%, even as total spending on city personnel rose. For the entire period, total public employee wages increased less than the rate of inflation. That isn’t unheard of – the wages of most Americans have been falling behind inflation for more than 40 years. But it is unusual for public employees to end up in that category. And one of the reason is there are fewer NYC public employees today than there were in FY 2008.

Even though the total wages of NYC public employees has been falling behind inflation, however, total spending on NYC public employees has been going up. In part because taxpayer pension contributions increased 21.7% from FY 2008 to FY 2011 and 17.3% from FY 2011 to FY 2014, for a total increase of 42.8%. Taxpayer pension contributions equaled 21.4% of employee wages in FY 2008, a higher contribution level than anywhere else in the U.S. That increased to 32.8% of employee wages in FY 2014, under the Mayor’s proposal.

And it isn’t enough. NYC public employees were retroactively granted huge increases in the value of their pensions in 1995, 2000, and (for teachers) 2008, with smaller increases in most of the years in between. These were described, fraudulently, as costing the city nothing. Meaning the city didn’t pay for them at first, putting off the cost onto future taxpayers and service recipients. Which is one reason contributions levels are so high now, and employment and (in some cases) inflation adjusted wages are going down despite more spending on city employees overall.

There is likely worse to come. The City Actuary has recently admitted that the city’s pension funds are unlikely to earn 8.0% per year in the future, and cut the projection to 7.0%. But if that is true, more needs to be put into the pension funds. The City of New York decided to short the pension funds by $1 billion, because otherwise services would be reduced too much. What does that mean for the future, when even more will have to be contributed to catch up?

Moreover, the projected 7.0% rate of return for the city’s pension funds is still too high. As The Economist explained in a recent article, because interest rates are so low and stock prices are already so high, a reasonable expected rate of return going forward is just 2.3% more than inflation, or 4.6% overall given the current inflation rate. “The outlook for expected returns is as low as it has been in more than a century, with real US returns likely to be 2.3% a year. Overaggressive pension funds (and endowments) beware!”

By the way, that’s the same expected rate of return I calculated on my own, as shown in this post

Assets became overvalued because, as noted in another article in The Economist, the 1980s and 1990s had the two highest one-decade returns on investments on record. The public employee unions and the politicians they control, based on those 20 years, awarded themselves vastly richer retirement benefits at a time when most workers were seeing their retirement benefits taken away. (The top executives who sit on each other’s boards awarded each other vastly higher pay starting at the same time). They took money out of our future, and now say they have an unbreakable contract and we have to pay it back.

Despite the high rate of pension contributions by city taxpayers, with all the sacrifices in higher taxes and lost public services that requires, the city’s pension funds remain desperately underfunded, particularly those for teachers, firefighters, and police officers, as yet another recent analysis once again showed. Even that analysis, unlike The Economist, assumed both high current asset values AND high future returns from those values, he same double counting used to assert that all those retroactive pension deals would “cost nothing.”

The public employees are grabbing more in other tax-free benefits as well. Spending on employee fringe benefits, as measured by the city, increased 14.3% from FY 2008 to FY 2011, far more than the rate of inflation, and 6.8% from FY 2011 to FY 2014, about the same as inflation. Foremost among those benefits is health insurance, not only for those working but also for retirees.

One of the best things Mayor Bloomberg did for the future of the city was to set aside money for the future cost of retiree health insurance during the good times. But once the recession hit, he started using up that money to balance the budget. When the next Mayor takes office, it will all be gone. Yet no one talks about it, let alone objects to it.

Basically, in addition to the soaring cost of past debts, the reductions in inflation adjusted state aid, and the end of extraordinary federal aid, NYC public employees have become significantly richer compared with most New Yorkers. But only in tax-free retirement benefits, and not in cash. And having already taken the richer retirement benefits in deals in Albany, the public employee unions only count the cash when deciding how much in services NYC residents deserve. Far from grateful for getting more, they are doing less for city residents, in part because city residents can afford fewer of them at their higher cost per person.

This is a trend with no end in sight. So in FY 2015, all the retiree health care money will be gone, and the city will be facing a growing pension debt, and rising costs on official debts. That, not lower tax payments to the city, is why service cuts are likely to continue even as tax payments continue to rise. Mayor Bloomberg calls these “uncontrollable costs,” but after he has been in office for more than a decade that is misleading. A fair description is that these are costs that were imposed by others, and these are revenues of today and tomorrow were taken by others, in the past. Some of whom have departed with their winnings. Some of whom, like Mayor Bloomberg, are about to depart after having imposed additional uncontrollable costs on future New Yorkers. And then there are the real enemies of current and future New Yorkers, those who serve (or rather are served) in the state legislature. They are there forever.

I’ll follow with a post or two on specific public services.

I guess the kind of tax burden we have, and declining quality of services we have, in New York City (for the second time) is not acceptable in the rest of the state.

So what is the end game? Have the state cover a share of the local government contributions outside the city, with taxes collected in part in the city, even as city services re-collapse under the second big "screw the newbie, flee to Florida, leave the city in ruins" the unions have arranged? Does NYC get to cut its pension contributions in half, for now, instead of increasing them too?

Here is what I don't get. The NYS pension funds are considered among the best funded in the country. Not just by liars like our politicians, unions leaders, and the corrput actuaries they hire, but by disinterested third party observers who used the same rules and assumptions for all the funds. The same disinterested parties who say that the NYC pension plans are little more than half funded, despite drastically higher taxpayer funding over 30 years, So why are they doing this? Is the goal to have the state pension in a death spiral too?

Remember, while NYC taxpayers have paid more than anyone else in the country for public employee pensions to the detriment of services, except for a couple of years under that union/Giuliani deal in 2000, the taxpayer contribution rate in the rest of the state was ZERO for several years in the 1990s. The winners moved out or, if they are public employees retired and now get tax-free income. The losers are not happy about holding the bag. So why not make it even worse in the future?   It's the Generation Greed game plan, since they insist on rationalizing and hiding from the consequences of what they have done, instead of facing them and taking those consequences before they pass on.

So this time I’m going to say what the job of the MTA Chairman actually should be, given the situation that has been created by the decisions, non-decisions and deals of the past, if the transit system – or at least some weaker, worse version of it, is to be saved. The job of the MTA Chairman should be to tell people to go to hell. The transit unions, the riders’ advocates, the construction unions and contractors, taxpayers, the state legislature, the City Council, the Mayor and even the Governor. To always bring up the past when discussing the future. As in “you or those who preceded you decided to hand out these benefits to your interest group then, and shift the cost to a future that has now arrived. And any attempt to avoid your share of the resulting pain now is simply a social injustice against everyone else.” The job would consist of a desperate, angry battle with no friends and as many enemies as possible, a constant and much resented attempt to break down any sense of entitlement. That is what would be required to save not only the mass transit system, but also any other institution, in the public or private sectors, in the wake of Generation Greed.

I was out of town visiting relatives over the New Year, and thus had access to a Microsoft Windows computer that was not blocked from downloading programs. Such as the unzip program needed to download the National Transit Database data for 2011. With Room Eight on the fritz I’m not going to do a long multi-post, multi-spreadsheet analysis of this data. You can download the whole database here. But I will make a couple of points about what I found there.

According to Table T26, the Passenger Fare Recovery ratio, fares on the New York City Subway covered 76.6% of subway operating costs in 2011. The average fare per unlinked trip, net of discounts, was about $1.10 while the average subsidy was 33 cents.

There are two ways to look at this. One is to say that no other transit systems in the U.S. come close to that level of cost covering, and thus the subway transit subsidy is very low. The Chicago Transit Authority’s subway/elevated system, for example, only covered 52.0% of its operating costs with fares in 2011, for a net subsidy of $1.04 per unlinked trip, three times the per-ride subsidy in NYC.

Another way to look at it, however, is that despite the low subsidy per ride, the total subsidy for the subway was large at $827 million. Because mass transit is such a large part of the New York City transportation system. In contrast, metro St. Louis has a tiny light rail system that only covers 29.1% of its operating costs with fares, and has a net subsidy of $2.60 per rider, a far higher subsidy on a percentage basis than the New York City subway. But because it is so small the total subsidy is only $42 million, for an insignificant tax burden on the residents of metro St. Louis who do not use the system. Because it its large size, in contrast, one could argue that the total subsidy for the New York City subway by non subway riders is the highest in the country. Even the total subsidy for Chicago’s subway/elevated system was only $231 million, although it was paid for by the taxpayers of a smaller city than New York.

The subsidy for the New York City subway is nearly as much as the $841 million in subsidies for the Long Island Railroad and Metro North Railroad put together, even though they only covered 53.4% and 62.3% of their operating costs respectively. The operating subsidy per ride was $5.16 on the LIRR and $4.19 for MetroNorth. For comparison, the commuter railroads of the Northeast Illinois Regional Commuter Railroad Corporation, perhaps the best commuter rail lines in the country, covered 40.5% of their operating costs with fares. Their net subsidy per unlinked trip was $4.90, but the total subsidy was just $354 million or less than half the combined MetroNorth/LIRR subsidy for an area with a similar population.

In one sense, it is hard to make out what all this means. On the subway, for nearly 20 years the MTA has been charging what ought to be operating expenses to the capital program, so they can be borrowed for, by making them “reimbursable.” But perhaps part of the interest on the capital debt is now being tabulated as an operating expense. Like most agencies, MTA operations are paying now for pensions that were earned, or retroactively granted, in the past. But they are also still deferring some of those costs to the future. And there is no way to know how the fare revenue for joint bus/subway trips has been allocated between the two.

But I can say this. Both the Transit Workers Union and so-called riders’ advocates like the Straphangers would like that subway operating subsidy to be larger. The former so its members could suck more out, and latter so riders could put less in. But it is the past successes of these groups, in part, that has led to the disastrous situation we are in now. I also part ways with other advocacy groups, such as Transportation Alternatives and Streetsblog, who I agree with more often than not. Because a future in which everyone uses transit and no one drives, but the entire cost of transit is covered by drivers and not transit riders, is mathematically impossible.

I would like to see that net subsidy disappear, so the subway system – the most economically essential of the NY metro area transit systems – has a chance to avoid a downward spiral no matter what. Yes we have just about the highest state and local tax burden in the country in New York, but past debts and pensions are sucking up all that money. If future service beneficiaries and workers insist on being as selfish as those in the past, the system will collapse.

The subsidy level for New York City’s bus system is much larger than that of the subway or commuter railroads, though not large per rider compared with other bus systems elsewhere. New York City Transit buses covered 36.1% of their operating costs with fares, for a net subsidy of $1.92 per unlinked passenger trip and a total subsidy of $1.54 billion. MTA Bus, the former private bus lines in New York City, covered 33.8% of its cost through fares, for a subsidy of $2.96 per ride and a total subsidy of $350 million.

For comparison, the portion of the Los Angeles County MTA bus system operated by public employees covered 29.0% of its costs, for a net subsidy of $1.90 per unlinked trip but a total subsidy of just $652 million. Or around one-third the total subsidy burden of New York City’s buses, for an area with a somewhat higher population. Once again the taxpayer/non-user burden of a lower per ride subsidy level is in fact higher, if more people use mass transit.

The private bus companies had kept costs lower by underfunding their pensions even more than New York City has. Had those companies been allowed to go bankrupt, their employees and former employees would have lost part of their pensions. Those employees received a massive benefit from the rest of us when New York City agreed to cover their pension obligations; fares rose sharply and services were cut not long after. But you never hear about this today. Particularly from the current head of the TWU, who came (I believe) out of the private bus company part of the union.

Rounding out the MTA services, New York City’s para-transit services, paid for by the MTA but provided by private companies, covered just 2.6% of their operating expenses with fares in 2011, for a net subsidy of $71.66 per ride. The total subsidy for paratransit was $422 million, or nearly half the subsidy for the subway, despite serving far fewer people. The subsidy for the Staten Island Ferry, which is free, was $6.17 per trip.

The second table of most interest to me is T27, “Service Ratios,” which shows the operating cost of mass transit measured a variety of ways. Per unlinked passenger trip, the New York City subway cost a remarkably low $1.40, compared with $3.00 for New York City Transit buses, $4.50 for the MTA Bus Company, $11.10 for the Long Island Railroad, and $11.10 for MetroNorth. Measuring costs this way unfairly favors the city services, which have many riders getting on and off over short distances.

Measuring per passenger mile favors commuter railroads, which have employees operating vehicles that cover many miles for each hour they are paid. Even so the New York City subway, at 30 cents per passenger mile is now cheaper than the Long Island Railroad, at 50 cents per passenger mile, and matches Metro North. With New York City buses stuck in traffic, their cost per passenger mile is $1.30 for New York City Transit and $1.50 for the MTA Bus Company.

My favorite measure of cost is the cost per Vehicle Revenue Hour. It costs $177.50 in operating costs for each hour a subway car is in revenue service. While New York City Transit Buses and MTA Bus Company buses are cheaper at $163.90 and $126.80 per vehicle hour respectively, that does not include the cost of maintaining the roads and bus stops, which is funded by New York City. New York City also pays to maintain the local streets for private motor vehicles with taxes everyone pays even if they do not own private motor vehicles, but requires property owners to maintain the sidewalks. The subway includes the cost of maintaining the subway right of way, and the stations. The same is true for the commuter railroads, with their cost per revenue vehicle hour of $471.70 for the Long Island Railroad and $512.10 for MetroNorth.

One reason New York City buses are so heavily subsidized even though the cost per vehicle hour is lower than the subway is that they carry fewer passengers than the subway. Another reason, however, is that they often run empty or nearly so, to maintain a decent time interval between buses and provide service overnight. The MTA has asked the TWU to allow new bus drivers to be paid less to do a different, less difficult job – drive mini-buses which could be substituted for full buses in times and places of lower demand. The TWU has said no.

A final measure is total operating costs per employee work hour. This includes costs other than labor costs, such as fuel, work materials, and even (Social Security) taxes, so it cannot be compared directly to one’s own compensation. Nonetheless most of the cost is in fact worker wages and benefits. On the New York City subway, for example, employee wages and fringe benefits (the latter probably including the employers’ share of FICA taxes) accounted for 82.0% of total operating expenses, according to the Operating Expenses summary spreadsheet. That means that with an average operating cost of $70.60 per employee work hour for the subway from the Service Ratios spreadsheet, it cost about $57.90 per hour to employ a NYC subway worker in 2011.

As it happens, with a liberal estimate of what my health insurance costs, I’d say it costs my employer about $58.70 per hour to employ me. Or course far more of my pay is in cash, and I work more hours than the average transit worker, leading to a larger annual cash total. Less is in retirement benefits for me, relative to the average subway employee.

The total average operating cost per employee work hour was $77.10 for New York City Transit bus workers, $78.00 for MTA Bus, $88.70 for MetroNorth – and $94.70 for the LIRR. All well more than the $70.60 per employee work hour on the NYC subway.