Wednesday, April 22, 2009

Toll Scheme Resuscitated,
But Pattern of Exemptions
Makes the Plan Impractical

By Henry J. Stern
April 17, 2009

A good number of readers commented favorably on the article on the history of piracy that we wrote Tuesday. A few people said that they enjoyed reading about the pirates, but that sometimes they were less than charmed by our columns detailing the dysfunction in Albany.

We believe that covering city and state government is our mission, and although pirates, buccaneers and corsairs may be more absorbing, it is our task to describe the activities of their cohorts on land. Digression: I never thought I would quote Rush Limbaugh on anything, but I did like his description of pirates as “maritime community organizers.”

Now, back to the difficult subject of financing mass transit deficits.

Just when you thought it was safe to back into the water…

Weeks after the plan to impose tolls on the big East and little Harlem River bridges was taken off the table due to substantial legislative opposition, an attempted resuscitation is l is under way, with sweeteners like exempting visits to doctors and certain business travel from the toll, which would start at $2 and go up with the subway fare.

In the past we have opposed the tolling of the free bridges that have linked the boroughs for a century. We have serious misgivings about the practice of imposing charges on some vehicles while exempting others. How would the authority decide the purpose of each individual trip without stopping the car and asking the driver, whose response may or may not be truthful? If the car is to be exempted, and given a sticker for free passage, how can it be assured that the car will not be used for some unprotected purpose. If the trip rather than the car is to be exempted, how are you going to find out the driver's intention without stopping him to ask, and even then he may lie to save the toll?

The issue is almost impossible to resolve logically or logistically. It is probable that the MTA would incur greater expenses, including substantially higher labor costs for toll inspectors, and receive lower revenue because of the exemptions.

It is noteworthy that in modern times, the Staten Island Ferry, once advertised as the best sea voyage one could enjoy for a nickel, went to a quarter and then became a freebie. As costs of operating the ferry climb, the deficit grows. If all the ferry’s revenues are derived from concessions in the two terminals and billboards on the boats and seats, it is not likely that it will come close to breaking even.

You probably have not noticed that no one has proposed charging even a nickel, plugged or unplugged, for the 25-minute ride across New York Harbor. We are NOT suggesting a tariff for the ferry. Many Staten Islanders pay double fares anyway. A small toll would cause more irritation than it is worth, and a large toll would be unjust. But the fact that this issue has not even been discussed indicates the large role that poltics play in determining transit fares.

Subway and bus fares were held at five cents through the 1940s, when the private companies running the lines were forced into bankruptcy. New York City tried to manage the lines through a Board of Transportation, which was superseded in 1953 by the New York City Transit Authority. In 1965, under the administration of Governor Nelson A, Rockefeller, the Metropolitan Transportation Authority was established, and in 1968 it took over both the New York City Transit Authority and the highly successful Triborough Bridge and Tunnel Authority, thus stripping Robert Moses of the authority he had exercised for over forty years. Rockefeller's aide, William J. Ronan, became the new construction czar.

The MTA raises the subway fare every few years, bowing to rising costs of labor, materials and electricity, the obligation to pay debt service (interest) on the ever-rising capital program, and corrupt and extravagant construction in sites like 2 Broadway, a tower on a prime site at Bowling Green which was converted into back-office space which the MTA, after spending hundreds of millions of dollars, does not even own. The Authority now pays $25 million a year in rent to Tamir (Tom) Sapir, a Soviet √©migr√© in 1973 who was formerly a cabdriver, to occupy the building, under the terms of a lease signed in 1999 with a duration of 49 ½ years. Assuming the rent was flat at the current rate for the entire lease, the total rent paid by the MTA (subway & bus riders) would be one billion, two hundred and thirty-seven million and five hundred thousand dollars. That’s a lot of rent for a public agency to pay to one man, his heirs or assigns.

Several MTA employees went to jail for crimes related to the construction of 2 Broadway. The entire project was a grotesque example of waste and fraud, inappropriate from conception to construction. This folly goes back to the Pataki administration, which was quite susceptible to lobbying by insiders. The massive debt incurred to reconstruct 2 Broadway is a continuing burden on the agency’s operating budget.

There has been no improvement in subway or bus service that could not have been accomplished by building at a site with lower costs. And the city has been deprived of the income that it could have received from higher taxes on what should have been a luxury commercial block, across from the Customs House, with a great view of New York Harbor and the Statue of Liberty. 2 Broadway was the 20th century equivalent of the Tweed Courthouse, the 19th century's monument to municipal excess.

You don’t have to travel more than ten blocks from 2 Broadway to find two other sites where serious misjudgments were made by the MTA. There is often such a passion to do something that the wrong thing can be done. We have written about them before, so we will just mention them in passing today: the Fulton Street “transit center’ and the South Ferry station.

Just as the Department of Defense became a partner in the military-industrial complex that President Eisenhower warned about before leaving office in 1953, transportation agencies have sometimes become part of the transit-industrial complex, with executives shuttling (that’s a transit word) from engineering firms to public authorities and back. ‘Build, baby, build’ is a powerful slogan, but a great deal depends on how, what and where one builds. That requires a level of judgment that has not been demonstrated consistently or convincingly by transit officials, themselves in transit.

For political reasons, the transit unions have been exempted from any serious effort to reduce transit deficits. We are not talking about reducing salaries, but such issues as changes in work rules and pensions for future employees (Tier 5) would save hundreds of millions of dollars over the years. These issues have not even been brought to the table because of the power of public employee unions and their influence on both the Democratic and Republican parties.

It is much easier to sock it to the general public by increasing as many taxes and fees as the governor and the legislature can find. This makesNew York State, already heavily overburdened with income, sales and property taxes, even less capable of attracting, or retaining businesses which are free to choose locations..

Of course, the smaller the tax base, the greater the tax burden on those remaining. Eventually, the house of cards will topple. Like the tulip bubble in the 1600s, the dot.coms, the savings and loans, and the subprime mortgage crisis.

But that may not occur during the tenure of the legislators currently serving, which to them is as good as its never happening.

The image that comes to mind is that of Jor-el on the planet Krypton. He told his fellow Kryptonians (we cannot say Kryptonites because that describes minerals, not persons) but they ignored him, and were destroyed when their planet exploded. We hope that the State of New York will have a better outcome than that doomed world, which helped our planet by sending us our first immigrant from space.. People have spoken out about the crisis in our state; we are neither the first nor the most eloquent to raise the alarm.

Unfortunately, none of us has succeeded in inducing by the elected authorities. This year the Obama stimulus plan came to the rescue. If current trends continue, we will again rely on massive support from Washington, which may or may not come in 2010, the year of state elections.

As to Washington’s own problems with trillion-dollar deficits, we rely on the words spoken by candidate Obama when he was asked when life began. He said, “that’s above my pay grade."


#552 04.17.2009 1453 wds

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