by Neysa Pranger, Director, Public Affairs
The region's transit system is in hot water again. Why? A combination of bad financial news in the past week, brought on primarily by a bum economy, has forced the Metropolitan Transportation Authority to close a $383 million budget gap in just two weeks. Lower-than-expected payroll tax revenues, greater-than-expected operating expenses, and cuts in state aid have turned the MTA into the season's Grinch: the agency last week voted to approve a budget that includes cuts to service, student transit passes and transit for the disabled.
Where do we go from here? While a way out might seem challenging, there is time for debate and creative solutions. The MTA will meet again in the New Year after a round of public hearings - likely in late January or February - to approve or modify the budget proposals. In the interim, ideas will surface. Some will be better than others, but for starters, here are some thoughts.
First, the city and state should pitch in to cover student transit passes. While the city's contribution has remained stable since a renegotiated agreement between the MTA, city and state split the burden equally between the three entities in 1995, the state's portion has slipped and the MTA has had to contribute a larger and larger percentage of the cost. This is an expense that supports education objectives and that no other major transit agency in the country takes on - the state and city should take it over.
Second, the MTA must find a way to cut costs. MTA Chairman Walder today made inroads in this area by reducing non-union employee salaries by 10%. He's also made a commitment to "take the place apart" to find ways to save money, and estimates that he can save $65 million starting in 2011 - to the extent possible, he should expedite this process. Cost-cutting measures on their own will not close the gap, but they do show that the MTA is trying to do its part to solve its funding crisis.
Third, the state and city must not give up on finding a long-term source of revenue to fund transit expansion and operating needs. Mayor Bloomberg recently revived the idea of tolling the city's bridges. While this idea has encountered many obstacles in recent past, tolling is being embraced around the globe as a sensible user fee system. If tolling is not palatable, the state and city should be looking for other sources of counter-cyclical revenue to get the MTA through the lean times.
Lastly, the US House of Representatives marked up bills last week for a second round of stimulus funding aimed at saving and creating jobs. Part of this provision will allow transit agencies to use a small portion of these funds on operations. While localities must ultimately be responsible for supporting transit operations, a one-shot provision to keep buses and subways running in a down economy should be considered.
While there has been some talk of using MTA capital dollars to offset the gap in operating, this is a poor choice for a couple of reasons. Capital spending is good for both short-term recovery and long-term economic growth. The MTA's riders and taxpayers are already paying a heavy price for past financing practices brought on by lack of capital spending. Using capital dollars, attractive as it may seem, would only push service reductions and budget deficits into the future. It would also have the additional consequence of letting the city and state off the hook to solve the problem now.
@RegionalPlan
In theory, property taxes should reflect the benefit that properties near MTA stops receive. In practice, political factors so distort assessments that they don't really reflect such benefits. Consequently, it would make sense to ask the property owners to pay for the shortfall through a special assessment on properties adjacent to MTA stops.
I am disturbed about NYC's transit issues, which impact not only the poor, but a middle class in trouble. In these times of stagnant wages and declining jobs, these problems cannot stand.