Monday, March 02, 2009

Silver Would Back $2 Toll,

But How Long Would It Stay $2?

Henry J. Stern
February 25, 2009

Assembly Speaker Sheldon Silver has just indicated his willingness to accept tolls on the East River and Harlem River bridges, provided they are no higher than the subway fare, which is currently $2. He had previously been skeptical toward tolling the bridges and sees the $2 toll as a compromise, since the MTA wants to collect the higher toll ($4.50) that it charges for its other large bridges. The toll may be set at $2 today, but if you believe that it will stay $2 once the next biennial MTA funding crisis arises, you should really buy one of the bridges.

As the most powerful political figure in New York State (at this time Andrew Cuomo is the second), Silver is likely to prevail if he applies pressure to his members, at least in the Assembly. There may be resistance in the Senate, which is Democratic by the narrow margin of 32-30. So far, no Republicans have endorsed tolls, which means every Democrat would have to vote for the measure to secure its passage. Since some Senate and many Assembly Democrats represent voters in the Bronx, Brooklyn, Queens and Staten Island, their vote for tolls, which would particularly adversely affect their constituents, cannot be assumed.

In scrambling to cover the massive MTA deficit, no political figure, as far as we know, has asked the Transit Workers Union or the 62,000 employees of the authority to make the slightest sacrifice in wages, health benefits, or pensions, or to modify restrictive work rules in the interest of more efficient management. Since the cost of labor is over sixty percent of the MTA budget, this is an area where minor changes would bring about major savings. The government bailout of auto companies was conditioned on substantial givebacks by the United Automobile Workers. The state and city governments and the MTA, however, do not even appear to have put those questions on the table. Maybe they have more money than the Feds.

With the state and city as the employer, you can count on any budget gap being closed only by increasing fares and tolls. The Triborough Bridge, as an example, now charges twenty times what it once did. Since most people use public transit out of necessity in order to get to work, MTA appears to believe that customer demand is relatively inelastic and that the public will absorb fare increases. In fact, ridership is already falling due to the recession. If people no longer have jobs, they do not need the subway to go to work. Even on the Lexington Avenue line, which I use during rush hours, it has become a little easier to push on to a packed train, and fewer people are being left on the platform to await the next train. The cloud of falling ridership has the silver lining of some relief for the sardines.

Since 2009 is a mayoral election year and 2010 a gubernatorial election year, it is unlikely that any public official will raise his or her head to mention the increasing labor and pension costs of the MTA. Because 2009 is the year of Federal subsidies to state and local government, it is possible that money will materialize somehow that can be used or reshuffled to postpone the MTA’s perennial financial crisis. But the basic issue of chronic underfunding of the MTA will remain.

Nonetheless, the agency has spent about a billion dollars on what is its most egregious waste of the decade, the Fulton Street Subway Palace, which remains unfinished, awaiting a major new transfusion of federal dollars. (The most wasteful project of the previous decade, the '90s, was the leasing and reconstruction of 2 Broadway, in which hundreds of millions were spent, with millions more stolen, on an office building owned by someone else where the MTA only has a lease.)

The Fulton Folly will provide no significant service increase to passengers. It is an overly extreme makeover of a lengthy chain of subway stations. The excuse for building it was that the money came from the federal government and had to be spent near the site of 9/11. Taking the Second Avenue subway downtown would have been a far wiser investment. Also, otherwise idle engineers prepared plans for this project while no new subway lines were being built.

We have learned over the years that if bureaucrats find money they can spend, they will usually spend it. Engineers like to design and contractors like to build. That is how they earn their living. The relative usefulness or real value of a project is of no particular interest to these entrepreneurs. But the MTA board members themselves, all honorable people who represent the officials who appointed them, largely lack the gravitas, transit experience. institutional memory and individual insight to make substantial individual contributions to resolving problems in this area. They are decent people, but not uniquely or even particularly capable of managing a huge transportation system. Their principal purpose is to serve as a buffer between elected officials and the public, so that unhappy events and service failures can be blamed on someone else.

On important matters, board members take orders from the governor or the mayor – whoever appointed them. That is probably appropriate, since the members represent the city and state governments. The governor’s appointees dominate the authority by their numbers, whether the state pays its fair share of operating deficits or not.

When the governor does intervene or give direction to the authority, it is usually the result of political pressure from business interests and labor. Despite their differences, commerce and labor are on the same side when it comes to hooking into public funds, whether the field is health care, transportation, or anything else where subsidies are involved. Former Deputy Mayor Rudy Washington taught me the applicable rule in these cases: 14-F: “Follow the money.”


#537 02.25.2009 977 wds

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