A Way Out for the MTA: Paying for the Other Rail Operating Costs
In an overview of the remaining options for the MTA, I suggested that the buses and the payroll tax/taxi surcharge revenues be transferred to New York City and the counties, and the subway and commuter rail systems be required to break even on an auto equivalent basis – covering the cost of buying, maintaining, and operating the rail cars and collecting fares. This left other operating expenses to be covered by other revenues.
I had forgotten to mention paratransit, but that service should also be transferred to NYC and the counties, along with the buses, and along with paratransit reimbursement revenues. I’m not sure they could do a better job than the MTA, given that NYC has very high school bus costs despite having a much lower than average share of its children take school buses to school, in part because a well organized industry makes lots of campaign contributions to the New York City Council. But I’m not sure they could do worse either, given the insane cost of NYC paratransit per ride and the soaring share of people who somehow qualify. This post is about the maintenance of the infrastructure, and the stations.
Let’s start with the railroad and subway rights of way. They are the equivalent of roads and streets, and the roads and streets motor vehicles drive on are generally paid for with tax dollars rather than fees. There are certainly plenty of motor vehicle specific fees, such as fuel taxes and tolls, but these generally pay for federal and state highways and bridges, not for local streets. And most road space is in fact local streets – 67.7% in New York State according to the Statistical Abstract of the United States, with presumably a higher share in urban areas. Local streets are paid for with local tax dollars, not motor vehicle-related revenues. Those taxes are paid by those who drive more, those who drive less, and those do not drive at all.
Some drivers object to cross subsidies for transit on the grounds that they are paying for a service they do not use. But someone who rides the subway or commuter railroads in New York is giving up their equal right to use very scarce street space, street space that is scarce because of the enormous amount of space motor vehicles require for movement and parking. If drivers are going to use space that in theory belongs to everyone for their private vehicles, they ought to pay for it. Particularly where that street space is the most scarce and valuable – in Manhattan south of 110th Street for example.
Now there are some transit advocates who believe that drivers should be made to cover the entire cost of mass transit, and that the subway should be free. I don’t agree. First of all, that extent of burden on drivers would be disproportionate, and unfair. Second, it would fail if it succeeded: if driving were so discouraged that a large share of former drivers shifted to transit, there would be no one left to pay for the trains, which would deteriorate to the point of collapse. You’d have more and more transit riders and less and less service. Under this proposal, New York City and the counties would be free to provide free local bus service as a social service using tax dollars, if they wanted, but our economically vital rail system needs its own revenue streams.
The fairest “rent” payment by drivers is equivalent to what is being surrendered by subway and commuter rail riders. The subway and commuter rail riders are giving up their share of the street, so drivers should pay for the tracks and related infrastructure – as well as the toll collecting system and maintenance of related bridge and tunnel crossings. For the subway, I’m talking about the Department of Track and Structures, Maintenance of Way, or whatever they are calling it now, including the maintenance of the track, tunnel and elevated structures, signals, and communications systems. Also the platform edge and platform level trash removal at stations, since this is best done from the tracks.
That settles what I think should be paid, but the next question is which motor vehicles should pay how much? The answer is drivers should pay in proportion to the extent that the rail transit system removes traffic from the corridor and streets they are using. Which means that those driving to Manhattan South of 110th Street during weekdays should pay for the majority of the rail transit infrastructure.
The New York metro area is already one of the most heavily tolled in the country, and some of those toll revenues are already transferred to mass transit. That transfer was the very reason for the formation of the MTA to begin with. But the current system is a mess, with some crossings into Manhattan south of 110th Street tolled, others free, and some crossings that the transit system doesn’t help much tolled as much as crossings into Manhattan. Then there is the matter of all the years when the Port Authority crossings into Manhattan cost less than the MTA crossings, most notably in the 1990s, even as the Port Authority reneged on most of the airport access improvements promised in exchange for the imposition of a passenger facility charge at New York’s airports.
Even if one were to believe that drivers in general do not owe transit riders an additional dime overall, therefore, the current set-up in indefensible, since it adds to traffic by causing vehicles to drive miles out of their way to more congested areas to avoid tolls. Among those who have pointed this out is “Gridlock” Sam Schwartz, who proposed lower tolls on non-Manhattan crossings such as the Whitestone, Cross Bay and Verrazano and equal tolls at all crossings into Manhattan.
You can call the rent payment anything you like – tolls, congestion pricing, whatever. There have been various proposals over the years. My proposal would be based on the principles described above, and the efficiency of the road system. It would start with a simple cordon charge into Manhattan south of 110th Street that would be equal from all directions. Non-gated collection methods would be used at all points that do not already have gated tolls, including the streets and highways entering from the north.
Some credit would be given for tolls already paid before entering the area. – at the Port Authority crossings, the Triboro bridge, the Verrazano Bridge, the Henry Hudson Bridge, etc. This might involve setting up a toll cordon at the exits to the Port Authority’s Lincoln and Holland Tunnels, to make sure the payment coming in from New Jersey is equal to the payment coming in from east of the East River, unlike in the 1990s. In fact the combined Port Authority toll/MTA charge might be set a little higher for some years, as payback for all the years when it was lower.
The entry charges should vary by time of day. Few drivers would thank non-drivers for taking transit or riding a bike into Manhattan at 4 am, because street space is freely available and not as valuable to them then. The charges should reflect the value of street space at different points in time. At 4 am, the charge should merely cover the cost of reconstructing and maintaining the bridges and tunnels themselves, and operating the tolling system, not any rent paid to rail riders. Most of that rent should be paid by those driving at more congested times.
If New York’s government were other than the mess it is, the charge could be set higher in economic booms, to limit congestion. And then reduced in recessions to make sure available street space was used and encourage economic activity. Extra money collected during the booms would be set aside to cover rail maintenance costs in the busts. But even in a fantasy scenario that our future selling, state destroying legislature is unlikely to adopt, that’s a bit too much to suggest. They would never keep their hands off the money built up in booms.
As part of a rent paying system I would propose, the tolls on MTA crossings that did not enter Manhattan would be lower than they are today. And the price to travel through, rather than to, Manhattan on the FDR drive 9A/Henry Hudson would also be lower, except at rush hours. This exception would require either a tolling cordon at all the exits to those roads, or a lower fee for those who both entered and exited Manhattan South of 110th Street within a prescribed amount of time.
South of 110th Street in Manhattan, there are only three north-south highway routes between the Cross Island Parkway and the Hudson River– the FDR, Route 9A/Henry Hudson, and the Brooklyn Queens Expressway. Only one of those three routes, the BQE, permits trucks and buses along its entire length, and it is loaded with trucks during almost all weekday hours. The FDR and West Street, in contrast, are not heavily used during the middle of the day. It doesn’t make sense, therefore, to impose a tolling system that encourages private automobile through traffic to shift from the FDR and West Street to the BQE during times when the BQE was crowded and the other roads were not.
In fact, if New York wanted to improve its freight movement (to attract more of the blue collar jobs generated by its own consumer demand) and express bus services, it might make sense to ban private automobiles from the BQE – and perhaps the Gowanus as well – entirely during weekdays. After all, the metro area has plenty of limited access highways that exclude commercial vehicles, and the BQE is one of only three through truck routes through Brooklyn, the others being Atlantic and Flatbush Avenues (with a connection via the Prospect Expressway and Church Avenue). That might be something to think about as a mitigation measure during the years when the part of the BQE under the Brooklyn Heights promenade is under construction and capacity is reduced.
Note that I’m not proposing that only vehicles traveling into Manhattan be charged a road fee that includes “rent” payments for transit. After all, those driving elsewhere in the region also benefit from the fact that those taking transit to Manhattan are not on the roads, the roads they would have to used to drive to Manhattan before they got there. But clearly, travelers to Manhattan should pay a majority of the cost.
Note as well that I am proposing using surplus toll revenues for track and infrastructure maintenance. The subway only accounts for one-third of MTA track miles, and by the deal under which the MTA was founded NYC Transit should be getting more than half of the toll surplus – it was originally granted two-thirds. Subway tracks, however, are used more intensively than commuter rail tracks, and some of the cost of commuter rail maintenance is paid for by Amtrak and the State of Connecticut. My guess it that the subway accounts for somewhere between half and two-thirds of rail track and infrastructure maintenance costs.
In a legal sense, one might note, a large share of the existing MTA toll surplus is encumbered by bond covenants. Bonds have been floated to pay for past “capital expenditures” and backed by future toll revenues, which are thus not legally available to pay for future maintenance and capital expenditures. I am not suggesting that drivers be charged over and above the cost of that debt service, nor am I suggesting a legal change to the bond covenants. Money is fungible, however, as the Governor says when using dedicated MTA taxes only collected in the MTA service area to pay for state costs including those in Upstate New York. Legalisms aside, toll surpluses could be set to equal to, and used for, track and infrastructure maintenance if bond revenues are paid for through other revenues. I’ll get to those other revenues later.
Finally, what about rail transit stations?
I’ve already said that fare revenues should be used for fare collection, which at NYC Transit is the Department of Metrocard Operations. Fare revenues should also be used for non-police security systems and personnel needed to prevent farebeating. The City of New York, through the NYPD, has an obligation to prevent fare beating. As part of the deal transferring the New York City Transit Authority to the MTA, the city agreed to pay for the separate Transit Police department, but under Mayor Giuliani that payment was cut off and the Transit Police was integrated into the NYPD. In addition, I’ve already said that driver “rent” payments should be used to maintain and remove trash from the platforms adjacent to the tracks.
The remainder of the stations should be considered public buildings, public buildings that increase the value of surrounding properties, just as parks do. And therefore, it seems fair to assume that governments that get revenues from property should pay to maintain the stations. One of those governments is the MTA itself, which collects real estate transfer tax revenues, but the MTA has other obligations such as station reconstruction projects. I would argue that the MTA has an obligation to maintain and staff major transfer stations such as Times Square, Grand Central, Penn Station and Jay Street Metrotech using its own dedicated tax revenues and the revenues earned by the stations themselves (in rent and advertising).
I would also argue that over and above the revenues of local stations themselves, local governments should pay to maintain and staff local stations. In fact, there is already a requirement that local governments pay for the maintenance of commuter rail stations, and local governments outside New York City might ask why subway stations should be any different. In addition with coming up with a fairly applied and philosophically justifiable new funding source, clarifying responsibility for the stations might solve some labor issues that have arisen over the years.
I did a little table a while back based on information I had on NYCT employment at different points in time. I found a substantial reduction in employment from 1986 to 2007 in the Car Equipment department, which maintains the subway cars, and the Maintenance of Way department, which maintains the track and structure infrastructure. Despite a huge increase in preventive car maintenance and reliability, and a reduction in bad track, over the years. This implies a strong increase in productivity.
While the Rapid Transit Operations department, which operates subway cars, ended up about where it was in terms of employment, there was an increase in service over those years. There were, however, issues. Local signal towers consolidated into master towers and then into the Rail Control Center with little reduction in the number of workers needed to control the trains. And CBTC was installed on the L line and short trains run on the G little reduction in the number of workers needed to operate them. But these issues are beyond the scope of this post. Once the rail systems were required to break even on an “auto equivalent basis,” as I have proposed, issues like those could be left to future negotiations as to how high the fare would rise, how much service would be provided, how much of a wage increase could be afforded, and how much productivity would be expected in exchange for that wage increase. Without the fantasy that money would fall from the sky, made to seem real by robbing future generations.
My concern here is the Station Department, which had a big increase in its number of employees from 1986 to 2007, although the stations were cleaner in 2007 than in 1986 (or today). With most people now buying Metrocards at machines or outside stations, the MTA had asked that Station Agents move outside the booths and do some light cleaning in addition to providing information. The TWU refused, reasonably pointing out that being outside a booth is not the same job – particularly overnight in some parts of the city.
Meanwhile, New York City Transit has reduced the number of booths that are open to save money, limiting the number of Station Agents to one at a time in most local stations. My local member of the Assembly, much to my aggravation, has voted in favor of budgets that cut funds – even so-called dedicated MTA taxes – to the MTA, and also opposed bridge tolls and other new revenues, while at the same time holding hearings demanding that the MTA keep additional booths open. Presumably as a way to attract political support from the TWU in the absence of financial support.
Enough of this. The MTA should bill the City of New York and local governments outside the city to maintain and staff the stations, including one station agent per local station during all hours the stations were open. If enough money wasn’t paid, the MTA should close stations down, and if a locality wanted more station agents in the stations, it should pay for them too. But if a locality believed it could maintain and staff its stations cheaper than the MTA using its own workers, it should be allowed to do so.
In addition to some of the net cost of the buses and paratransit over and above the payroll tax, taxi surcharge and fare revenues, therefore, I have now proposed shifting some additional station costs to local governments, including New York City. Other payments by local governments to the MTA would disappear. So am I proposing to let the State of New York off the hook?
No. Because there is the little matter of the MTA Capital Plan, and the costs not of providing mass transit today, but left over the irresponsibility of the past. Those costs, and who should pay for them, will be discussed in future posts as I have time to write them.
But the main theme here is that I propose making MTA funding a matter of transparent fixed rules, not a matter of deals, rules that do not allow anyone to grab today without someone else realizing it because the cost is shifted to tomorrow. Those deals are the way MTA funding has been done since the early 1990s, always to the detriment of the future of the New York area’s transit system, and its economy. If our politicians do not want to stop doing this, then there is always my option A: bankruptcy.
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