The Good News and Bad News About the MTA Capital Plan

About a month ago, the MTA released a list of $54 billion worth of major projects to be done over the next five years—a twice-a-decade rigmarole known as the Capital Plan—and an outline of how to pay for it.

Only a few weeks later, NYCT President Andy Byford handed in his resignation letter to his bosses, in part because he, as Dana Rubinstein of POLITICO put it, is “disinclined to preside over possible service cuts or layoffs.”

OK, don’t panic, people. Byford rescinded his resignation and issued a statement saying he’s “not going anywhere.” (I believe the 😬 emoji was designed precisely for this moment.) But the fact that Byford was ready to resign because service cuts and layoffs are likely provides a stark contrast to just a few weeks ago when the MTA had a plan to fund $54 billion of system upgrades in five years.

How, it is fair to wonder, can the MTA both have a $54 billion repair plan and need to slash service and lay off workers just to make ends meet?

The answer is: debt.

As is so often the case with the MTA, to understand what’s going on here, we have to go back in time. This capital plan tradition originates from the subway crisis of the 1980s, a crisis that was the result of decades of underinvestment and deferred maintenance that literally resulted in dozens of trains falling off the tracks. The idea of coming up with a plan every five years for how to consistently and strategically invest in the MTA to keep the system in working order, otherwise known as a “State of Good Repair,” came as a result of that failure.

However, this capital plan, mammoth as it is, is not one about deferred maintenance. It is about modernization. About $37 billion of the total cost is earmarked for the subway alone. Among those expenses: $7.1 billion for CBTC upgrades and $5.2 billion for station accessibility, including elevators at 66 more stations. To give a sense of scale, the first capital plan, funded in 1981, cost $7.2 billion, or about $20 billion in 2019 dollars, and was considered an historic investment and re-dedication to the city’s mass transit system.

To be sure, there is a lot to celebrate about this plan. At least in this preliminary form, it checks off every box that requires major investment that was included in the Fast Forward Plan Byford released way back in May 2018, which at the time received widespread acclaim from reporters including myself and the transit advocacy community.

Likewise, the Capital Plan was similarly lauded (the MTA sent out no fewer than three press releases stuffed with quotes from politicians and business leaders praising the plan) for, in the MTA’s words, vowing “unprecedented investments” 70 percent larger than its predecessor, which cost $32 billion for all of the MTA combined.

This is all good news until we remember that one word: debt. Because at the root of this plan is a fundamental fallacy. The MTA is trying to spend its way out of a spending crisis.

The MTA, you may remember, is in a fiscal crisis. Now, bear with me as I talk about budgets, the single most exciting thing in the world. The MTA has two budgets: the annual operating budget that has to be balanced every year by law, or the board goes to jail or something, and the capital plan. When the capital plan racks up debt, the MTA pays it off with the operating budget, money that would otherwise go towards running trains and buses or paying for workers and their benefits.

In other words, the debt accrued by the capital plan doesn’t just magically disappear. It shows up in the annual operating budget as an expense, right alongside payroll and health care and pensions. Here, I even annotated the MTA’s 2019 budget to show you:

As you can see, the MTA has a lot of debt. Currently, about 16 percent of its annual operating budget goes straight towards paying off its debt. Do not pass Go, do not fund a single train, go straight to Debt Service.

That number will only keep rising in the years to come. In August, after the MTA approved the 2020 budget, the Citizens Budget Commission warned the transportation agency’s budget woes are dire. The MTA’s plan (like, their actual plan) going forward is to amass a cumulative deficit of $740 million by 2023, even though by law they must balance their budget every year.

That’s not even the worst of it. The CBC warned this forecast, dire as it is, is based on “four assumptions that point to an even more alarming fiscal outlook.” Mainly, the MTA is assuming it can execute its transformation plan flawlessly and realize its “highly optimistic estimates” (in the CBC’s words) for savings. The MTA also assumes it will be able to save $251 million by running its organization more efficiently (or cutting service) in 2023—not by 2023; in 2023—but doesn’t say how. Nor is it clear, the CBC warns, how these two plans—the operations savings plan that originated within the MTA years ago and the state-mandated transformation plan hyped by Cuomo’s people—interact, or if they double-count savings, because each is too vague to sufficiently interrogate.

But most worryingly, the plans continue to assume “unprecedented continued economic growth” (again, CBC’s words), a state of affairs that many experts not only caution may come to an end but may do so in disastrous fashion.

It’s obviously difficult to predict economic winds, but there are serious warnings the good times are coming to an end. For example, I now spend my days paying close attention to the auto industry and, as I have come to learn, car companies have some of the finest economic forecasting departments in the world because they plan product cycles four to six years in advance. They simply must have some idea of which way the economic winds are blowing so they can plan their global supply chains and product offerings accordingly (like the MTA, these highly bureaucratic organizations sometimes do not listen to the smartest people on the ground and make bad decisions as a result). To that end, both Ford and GM are hunkering down for a recession in the next 12 to 24 months. They’re not alone. About three out of every four economists forecast a recession by 2021.

Now, economists are more or less always forecasting a recession on the horizon, but the slowed growth of major index funds like the S&P 500 seem to at least confirm that the angst is hardly limited to car companies and the 200 or so economists surveyed by a trade group.

At the very least, the modest prediction that this unprecedented period of growth may, in fact, turn to the other end of the business cycle soon hardly seems outlandish. Many companies and investors are taking steps to shore up their cash reserves for this very scenario.

But not the MTA. In his annual report, State Comptroller Thomas DiNapoli warned the transportation agency of the recession risk. Why is a recession especially bad for the MTA? Because 86 percent of its annual budget comes from dedicated taxes, toll revenue, and fares. All of those revenue streams are highly vulnerable to economic downtowns. So, DiNapoli urged the MTA to build up its reserves to avoid severe service cuts. Such cuts, by the way, are already on the table for the agency to slash operating costs as it services its increasing debt load even in good economic times.

The problem is, the MTA responded to this warning by…adding more debt. Prior to the new Capital Plan’s release, the MTA was anticipating a debt load in 2022 of $3.5 billion, or about 19 percent of the operating budget. That’s three percent higher than the current budget. The Capital Plan will add an estimated $9.7 billion of additional debt load even after estimating revenues from congestion pricing revenues, federal grants, and additional taxes levied to fill the MTA’s coffers, all potential windfalls subject to change.

The very, very thin window of opportunity here is that the MTA need not acquire so much debt during the next capital plan, because the capital plan itself is so bloated with extremely high cost projections way out of line with industry standards—one of the key problems that resulted in the debt to begin with—that there are plenty of theoretical opportunities for savings. The MTA is budgeting something like $78 million per accessible station, which as the Times and Slate pointed out is a ridiculous sum way out of line with other cities. And Ben Kabak of Second Ave Sagas detailed how the Second Avenue Subway Phase II costs are still projected to be in the $6 billion range—although the number fluctuates even within the MTA’s own plan—meaning Phase II is projected to overtake Phase I as the most expensive subway per mile of track on Earth.

Whenever this issue of exorbitant costs comes up, MTA officials say something to the effect of “We know, we’re working on it.” At a TransitCenter panel about the Capital Plan, the guy responsible for all MTA capital projects, Janno Lieber, was a good sport fielding tough questions from moderator Colin Wright about this very topic. I do believe Lieber when he says they’re making progress on delivering projects on time and at cost—he often cites LIRR’s Third Rail project as a pioneering and replicable example—but “at cost” is not good enough for this Capital Plan.

If, as I suspect, the MTA’s long-term fiscal health relies on this plan coming in roughly 15 to 17 percent under budget, then I don’t see any evidence they can deliver on that (nor does it make any sense for the MTA to budget absurd costs for projects only to promise to trim those costs later). There is nothing in the agency’s history that suggests they can deliver that. There is nothing in any public transit agency’s history anywhere in the world that suggests this is a reasonable expectation, because megaprojects invariably cost more than expected, not less.

The only conclusion, then, is that this is a plan to mire the MTA further into debt it can’t afford right as some of the world’s leading economic forecasters are projecting an oncoming recession. Rather than batten down the hatches, the MTA just bought a bigger yacht and is sailing out to sea.

To be clear, some amount of debt is healthy for the MTA, since it has a reliable source of revenue to pay off bonds and can typically borrow at favorable interest rates. Yes, congestion pricing gives the MTA more revenue off which to borrow. But there’s a balance to be struck, and the MTA has been on the wrong side of that balance for years now. Rather than using congestion pricing to get on the right side, the MTA is borrowing more.

Why has the MTA borrowed so much to begin with? Because when Governor Cuomo promised the MTA $8.3 billion towards the current capital plan in 2016, he did so under one condition. The MTA could only have $7.3 billion of that after it became “fiscally exhausted,” or, in the words of Reinvent Albany, “after the MTA borrows until it can borrow no more.”

Anyone who’s faced having to pay off student loans or credit card debt knows that borrowing money to cover short-term costs just means greater pain when the bills come due. With each successive capital plan, the MTA continues to kick the can down the road in a way that will inevitably result in higher fares and service cuts, perhaps dire ones. And in 2016, Governor Cuomo gave that can a big ol’ wallop.

At the root of this issue is a fundamental difference between the 20th Century subway crisis and the 21st Century one. In the 1980s, the MTA really did need a huge fiscal injection to pay for badly needed repairs of track, cars, and other infrastructure simply to keep the system functional. That is much less the case today.

As I have repeatedly argued, the subway crisis of 2017 was one primarily of gross mismanagement. My proof is in subway service today, which is about as good as it’s ever been, even though the MTA has received very little in the way of additional funds. Even if every single dollar of the $836 million Subway Action Plan made the subway better—something I do not myself believe—that is still only about five percent of the MTA’s 2018 budget. Even granting the dubious premise that “The Subway Action Plan Is Working,” it still begs the question: If all it took was $836 million to fix the subway, why couldn’t they find it before in the agency’s annual $16 billion budget?

No, the problem was never how much money the MTA received, but the way in which that money was spent. The rampant waste in megaprojects—in a more sensible world, East Side Access and it’s $11.4 billion price tag would be on the receiving end of several different independent investigations by city and state government officials—forced more borrowing to pay for exorbitant costs, and that borrowing must be paid off from the operating budget, taking dollars away from running trains, buses, and conducting maintenance and repairs. And there’s plenty of waste on the operations side, too. The money is there, but it’s going elsewhere.

I am hardly the first, nor will I be the last, to raise this alarm. In 2014, the Permanent Citizens Advisory Committee to the MTA published a review of the MTA’s entire capital plan history and found much the same:

Unfortunately, over these thirty years the MTA has been forced to incur an increasing level of debt in order to finance the continued rehabilitation of the transit system. Today, the MTA has $32 billion in long-term debt (bonds) on its balance sheet. This debt is supported by farebox revenues and tolls, and a bevy of dedicated taxes, all subject to economic cycles. These bonds currently require a $2.3 billion annual debt service, which must come out of operating revenues.

Since then, the only thing that has changed is the debt has increased. These forces, “all subject to economic cycles,” will continue to be subject to the economic cycles when those cycles are no longer favorable. Then what?

The 2020-2024 plan is a plan to continue this trend, of passing the “then what?” question along like a hot potato in hopes that whatever bad thing happens waits until the hot potato is out of your hand. This plan sinks the MTA’s operating budget further into the grip of bond service, meaning more of your fare will go towards paying off the ill-considered promises that have only delayed the inevitable.

The Capital Plan has been hailed as a triumph that will finally usher the MTA into the 21st Century. In a vacuum, that praise is well placed. But the MTA does not exist in a vacuum. It inherits the mistakes of its predecessors. The subway is running better than it has in years because of the reversal of a small fraction of those mistakes. There is a lot more work to be done. I believe a lot of people at the MTA, and at NYCT, are up for the challenge. I also believe the only prudent move is not to saddle those dedicated public servants with the burden of having one out of every five dollars in their budget go straight to debt service.

The MTA could have its cake and eat it too if costs were under control, but they’re very much not. Instead, it would behoove the MTA to prioritize what it can afford and save other projects for the next plan. Maybe the Second Avenue Subway—for which the federal government is budgeted to foot about half the bill—needs to wait until the East Side Access boondoggle is behind them. Perhaps this isn’t the time to be spending $704 million on 375 electric buses, or $1.87 million per bus. But that’s not what this plan is about. This plan is about making everyone happy.

It is for this reason I’m worried the MTA is, in some ways, getting what it needs at the precisely the wrong time. For all of its transformative promises, the 2020-2024 Capital Plan is more of the same from our leadership. More promises. More spending. More debt. Eventually, something is going to snap the MTA out of its spending problem. You wouldn’t know it from our elected officials, but it can’t go on forever.

Miracle On 14th Street

In the history of Signal Problems, I have never dedicated an entire edition to good news. I mean, let’s be honest, the MTA hasn’t given us an awful lot of good news. And in keeping with my cynical personality, whenever there is good news, there is also plenty of other bad news.

But today is different. Welcome, Signal Problems readers, to the Miracle On 14th Street.


Two weeks ago, I walked along 14th Street from Eighth Avenue to Union Square. I walked along the sidewalk, as people tend to do, but I could, in an alternate world with different social norms, clambered atop the line of stationary vehicles idling along the road without my feet touching pavement, so complete was the gridlock, as if each vehicle had separation anxiety from the one in front of it. I not only moved faster on foot than the buses stuck in that traffic, but reached my destination quicker than many of the cars, too.

Speaking of alternate universes, I made that same exact walk a week later, Friday at 6 p.m. Instead of the cacophony of honking and steady drone of idling engines, there was this:

And this:

While no bus had passed me the week before, no fewer than five buses past me that evening during the same walk. And they didn’t merely pass. They zoomed by at or near the 25 mph speed limit, for there were no obstructions in their paths. And the buses that did pass me were not empty. They were full.

This turn of events is because, on Thursday, the city was finally able to implement the 14th Street Busway, a plan originally hatched to cope with the erstwhile L shutdown, but kept in place for reasons that had always been clear to those of us who prioritize the movement of people above private cars in dense cities.

Today, the reasons for keeping it in place are more obvious than ever. As has been well-covered elsewhere, the M14 has been one of the slowest routes in the city for some time, bleeding ridership as a result. To reverse this trend, the city proposed making 14th Street local access only, except for buses, trucks, and emergency vehicles. All other cars must take their first right turn off the road.

There were worries about how well this would work. There was also a legal challenge of such erroneous merit I refuse to spend any longer discussing it. Thanks to a (disturbingly narrow 3-2) ruling from an appellate court that reversed a previous injunction against the busway, we no longer have to pontificate about what would happen if cars were mostly banned from 14th Street and the surrounding area. Instead, you can see for yourself.

Instead of only catching single words of passing conversations, I could hear entire sentences. The hullabaloo of whatever was going on at the Union Square steps echoed for half a block in every direction instead of dimming by the corner of University Place (which, by the way, is pedestrianized now as well). I found myself leaning against a LinkNYC kiosk street-watching. Delivery workers zoomed past unconcerned about getting doored and without interfering with any pedestrians. Two kids rolled by on their skateboards just off the sidewalk instead of weaving in and out of pedestrians. The only disturbance from this peaceful scene was an ambulance screaming by at great speed, something it could not have done a week ago. I thought about how often a hypothetical disruption of emergency services are erroneously used as a counterpoint to safe streets infrastructure like bike lanes and busways. I couldn’t help but wonder, as the ambulance did not merely crawl through an intersection but sped by, did this busway already save a life?

(As for traffic on 12th, 13th, and 15th streets, I saw the usual half-block backups at red lights during rush hour. It was certainly nothing remotely close to the apocalyptic scenario detractors anticipated. As far as I could tell, the most significant downsides so far have been Uber customers needing to walk half a block to meet their ride. Also the owner of Joe’s Pizza apparently thinks a lot of people take taxis to get his $3 slices, which, LOL.)

Reporters who flocked to the M14 during the first few days of the busway found jubilant bus riders shaving up to ten minutes off their normal commutes. As the WSJ noted, bus drivers had to slow down to keep on schedule. I echo AM New York reporter Vin Barone’s observation that it is exceedingly difficult to find someone calling New York City buses “amazing,” yet here we are:

The totality of this shift from a miserable, traffic-clogged thoroughfare to a pleasant urban street with speedy, efficient bus service feels like a miracle. It is a miracle, when you consider how hard it is for anyone to accomplish anything positive in this city’s transportation scene.

The forces for conservatism in this city are strong, especially when it comes to maintaining the status quo of streets as spaces for private cars. So we must not forget that this miracle was not, in fact, magic. It did not happen by itself. Like most “miracles,” it is the result of years of hard work by hundreds of people who imagined something better and fought to make it reality. Groups like Transportation Alternatives, TransitCenter, Riders Alliance and others have been fighting for years to have this busway implemented. In the past year and a half especially, many at the MTA have fought hard for it, too. And I know there are folks at DOT right alongside them.

The MTA recently proposed a $54 billion plan to make getting around this city and the entire New York region faster, more reliable, and more sustainable. One of these days, I’ll get around to sharing my thoughts on that plan. But it is worth noting this busway, which is going to provide trip time and reliability improvements on par with any of the billion-dollar efforts that plan includes, did not cost very much money.

For all the hand-wringing and court hearings, in the end it was always a simple problem with a simple solution. For a city that pathologically over-engineers and over-spends on seemingly every solution to every problem including but hardly limited to transportation, they just. Fucking. Did it. That is the real miracle.

If we want more of these miracles to happen, I urge you to go to 14th Street, ride the M14, and see for yourself what bus service could be right here in New York. If you like what you see, write to your city councilmember and the Mayor’s office. Let them know you want more of it, that you want to live in a city where fast buses don’t have to feel like a miracle.

Dog in a Bag

MTA Rules of Conduct Section 1050.9 Subsection (h) Paragraph 2: no person may bring any animal on or into any conveyance or facility unless enclosed in a container and carried in a manner which would not annoy other passengers.

Have a dog in a bag photo? Reading this on the subway and see a dog in a bag? Take a picture and send it to signalproblems@substack.com.

Photo credit: Erica Lourd

The History of Fraud Behind the Subway's Most-Cited Performance Metric

There used to be a hell of a lot of fraud reporting On-Time Performance. When did it stop?

First of all, a belated but hearty thank you to the hundreds who emailed after the last Signal Problems. I am consistently blown away by your incredible support for this newsletter and my work in general.

I’ll get to the story behind this email’s subject line in a bit. But first, here’s the big stuff I’ve been working on lately:

  • Uber and Lyft take a bigger cut of each ride than they say. Both rideshare companies insist they are merely a technology platform, not a transportation company. They argue this to avoid a whole host of regulations, including classifying their drivers as employees (something I have written about a lot as well). A key tell that this argument is invalid is that drivers cannot determine their own prices for their services, nor is there a pre-negotiated rate Uber and Lyft charge drivers for access to their platform. It’s whatever the hell Uber and Lyft feel like. And that “take rate,” as it is known, varies tremendously by ride. Of course, Uber and Lyft do not publicly disclose their true “take rate.” So my colleague Dhruv Mehrotra and I crowdsourced a database of almost 15,000 fares and found both companies take much more than they say.

  • 'There's No Such Thing As Cold, Hard Reality': Meet The Hyperloop's Truest Believers: Maybe you’ve never heard of a Hyperloop, or maybe you believe it’s our next, great hope for intercity transportation (my guess if you read this newsletter is you do not). Either way, I found nearly all coverage of the Hyperloop ridiculously simplistic to the point of being glorified marketing copy (“Denver to Cheyenne in 20 minutes? With the Hyperloop, You Betcha!”) so I went to a Hyperloop enthusiast conference to find out what its deal really is. I found it both more ridiculous and also more revealing than I expected.


Now, about the subway. The Times ran an article Friday about how the subway continues to get better but is still not, you know, great. One chart from the Times article caught my eye:

Looking at this chart, one could—indeed, should—conclude the subway performed supremely well through the 1990s and into the late 2000s before performance fell off and only now is the subway performing about as well as it did in 2011.

But that’s not the true story. Because On-Time Performance, the stat most often cited when evaluating subway performance, has a dirty secret. For much of its history, it’s been fraudulent.

On October 26, 1994, MTA Inspector General Henry Flinter published a report titled “Does The Transit Authority Accurately Report Subway On-Time Performance?” The answer to that question was a resounding “No.”

(To the best of my knowledge, the report has not been on a publicly available link—until now. You can read the report here.)

For the uninitiated, OTP is an important stat for much of the same reason the subway is important; not because it is great, but because it exists. It is the only metric consistently measured for any prolonged period, meaning it is the only window into how subway performance has changed over time.

For much of OTP’s existence, it was compiled using a very manual process. Dispatchers at terminals recorded the times trains arrived, compared it to the schedule, then phoned the Command Center at the end of their shift to report the number of late trains (a number defined the same as it is today: any train that was more than five minutes late to the terminal or didn’t make every stop along its run).

To answer the question from the report’s title, Flinter’s team conducted two tests. First, they spot-checked the arrival times of 315 randomly selected trains at terminals across the system and compared that to the times dispatchers logged. Second, they looked to see how many trains were made “on time” by dispatchers changing the schedules illegitimately before reporting the number of late trains to the Command Center.

Flinter’s team found “discrepancies” in all respects:

First, dispatchers in the field added running time to schedules so that late trains appeared to be on-time. These adjustments to schedules, in violation of the TA’s [Transit Authority, as NYCT was known then] own rules, made one third of the late trains appear on-time. Second, dispatchers recorded incorrect times for another third of the late trains so they appeared to have arrived earlier than they did. Third, 15 percent of the late trains were not reported at all to the Command Center, even though they were shown as late on the dispatcher’s records. Of all the trains that arrived at their terminals more than 5 minutes behind schedule, the TA correctly reported only 20 percent as late.

In other words, dispatchers falsified records at every step. They:

  1. padded the schedules

  2. forged records with falsified arrival times

  3. simply didn’t report some late trains they did correctly log

This had a massive impact on OTP. For the months examined by Flinter’s team, the TA reported an OTP of 90.8 percent. That’s good!

But the MTA IG calculated the actual OTP was more like 73.2 percent, or “almost 18 percentage points lower than that reported by the TA.” That’s bad.

Surely, this was all just a big mistake? Inefficient, manual record-keeping resulting in errors both ways, right? False positives and false negatives balancing out over time?

Yeah….not quite. From the IG report [emphasis mine]:

However, we found that errors occurred in a definite pattern they invariably served to make timeliness appear better than it was. Not one on-time train was made late by a recording error.

When 100 percent of the errors are in one direction, that doesn’t make them sound like errors at all.

How could this have happened? Basically, the students were grading the test:

The fundamental weakness in this system is that dispatchers, the very employees who are held responsible for regulating train operations and supervising operating personnel, are responsible for reporting OTP data. In addition, TA management places pressure on its line managers, who have authority over dispatchers, to achieve OTP performance goals without enforcing appropriate internal controls to ensure data quality.

In sum, the overwhelming evidence suggests OTP was being logged fraudulently, not by a few bad actors, but as a matter of course.

Still, surely this was the first the TA was hearing about this? And would take drastic, immediate measures to clean this mess up?

Well, see, the thing is, not so much. This 1994 report was, in fact, a follow-up to a 1986 MTA IG report which found pretty much the exact same thing—reported OTP of 80 percent, actual OTP of 62 percent—and the TA did more or less nothing about it [again, emphasis mine]:

In our 1986 report, the OIG recommended that the TA audit dispatchers’ records periodically to check their accuracy and see if they matched official reports. The TA formally accepted this recommendation but never implemented it. To make matters worse, in 1992 the TA reported to us and to the MTA Board that it had implemented the recommendation. In the course of this investigation, we discovered this was not true.

Not only that, but it is fairly common knowledge in MTA circles that TA records from the 1970s were more or less meaningless because of fraudulent record-keeping, so much so that the TA changed the definition of “OTP” so people would stop using the old numbers.

Indeed, there is some evidence to suggest the malfeasance continued after 1994. Let’s go back to that Times chart:

If we are to believe the TA instituted actual reforms that led to honest reporting of OTP after 1994, we ought to expect OTP to fall off a cliff, or at the very least decline. But that didn’t happen.

Instead, OTP got better as the 1990s went on. This leaves us with two options. One is subway service miraculously and drastically improved right as better reporting controls were put into place so much so that it negated the 18 percent the TA was inflating OTP. The other is no such controls ever existed and dispatchers kept lying and NYCT brass kept covering it up. One involves believing a confluence of circumstances that requires lots of independent factors to have suddenly changed all at once. The other involves everything to have stayed exactly the same. I, for one, know which scenario I find more plausible.

This leads to the obvious question: is this still going on?

Let’s cut to what Andy Byford told the Times:

Mr. Byford said that it was unfair to compare the current on-time rate with the early 2000s for several reasons: ridership is higher now, making it harder to run trains on time; a new electronic system to tally delays captures more incidents; and new rules protecting track workers have slowed down trains.

I don’t know if Byford is aware of the extent of previous fraudulent record-keeping, but his answer is not entirely wrong.

Starting about six years ago, NYCT moved over to a new electronic reporting system called ITRAC. It is electronic in the sense that it is using computers, but it is not electronic in the sense that terminal arrival times are automatically logged. Dispatchers still manually collect and input the data. But NYCT does have the ability to audit that arrival time data more easily, and because the process is less labor intensive, dispatchers have less incentive to make shit up towards the end of their shift.

(Now, I’m going to get super-nerdy for a bit. If you don’t care about the specifics of NYCT data collection and train management ops, feel free to skip this paragraph. There are, in many respects, two different subway systems within the subway: the A Division, comprised of the numbered lines, and the B Division with the lettered lines. The cars and tracks are different sizes, the mosaics in the stations have different designs, etc. This is because they were built by different, competing entities. They also have different back-end data systems. Starting around the early 2000s, the A Division got Automatic Train Supervision, which gave NYCT precise knowledge of where all the trains are for better dispatching and provided the data for the countdown clocks. But this system was never linked to the totally separate system used for delays reporting, so that process remained manual even though NYCT had a digital system for tracking every A Division train’s precise location. That only changed under Byford’s tenure—meaning terminal arrival data can now easily be spot-checked and cross-referenced—but dispatchers are still manually inputting that data, even on the A Division. The B Division has no Automatic Train Supervision [yet], but it does have those Bluetooth beacon-based countdown clocks that log when trains enter and leave stations. That data is less reliable than Automatic Train Supervision so its usefulness as a spot-checking tool isn’t as clear. I’m sure there’s much more about the ins and outs of this data-logging process I’m not explaining here; the MTA’s data management process could fill a [supremely boring] book.)

All that said, the warped incentive structure where the students grade the test is still in place.

At this point, you may be wondering what to make of all this, and how it fits into the narrative of subway performance over time. To be clear, I’m not trying to conduct some revisionist history campaign. Of course subway service got way worse over the last decade or so, of course the subway completely melted down around late 2016 and early 2017, and of course subway service has gotten better in the last year or so. But, the magnitude of these shifts are probably not as severe as OTP would suggest, nor was service ever as good as one might think looking at that chart.

In the Times article, City Council Speaker Corey Johnson, who moved to the city in 2001, called that era of subway service “a bygone, nostalgic era of reliable service.” I think there’s more truth to that statement than he perhaps realizes. It likely wasn’t as good as he remembers it. Nothing ever is. But it may just have been good enough, and sometimes it feels like that’s the absolute maximum we can ask from this city’s transportation system.

What bothers me the most reading the MTA IG report is not the crime, but the cover up, and the reminder that the subway crisis was a decades-developing debacle brought about by institutional rot. Decades of warning signs were swept under the rug or merely brushed aside for a future generation of managers, workers, and riders to deal with.

There is one sentence from the MTA IG report that sticks with me the most for its prescience. As the MTA IG predicted it 25 years ago:

The degree of misreporting that we found may well cause TA management to lose touch with the real level of service it is providing, creating an unwarranted sense of confidence.

If I was to sit down today and write one sentence to summarize the failures of MTA management over the past two decades, I would struggle to write a better one than that.

As ever, the issue at hand is what we learn from all this. Will we learn from the past and heed the warnings in black and white right in front of us about the issues facing us today, not because it is easy but because it is right? Or, will we continue the time-honored tradition of brushing those warnings aside, plow ahead, and add to the bill for future generations to pay?


Oh, you didn’t think I was letting you out of here without a dog in a bag, did you?

Photo credit: Caresse Haaser

Oh hey there!

Hello, my dear Signal Problems readers! How are you? I miss you all and your glorious Dog in a Bag submissions.

Even though Signal Problems is no more, I’m still following the goings-on at our beloved MTA. Not quite as closely as I used to, but I find that merely changing jobs has not changed the fact that I care about our mass transportation system.

So, I thought it might be fun to send you a quick update on some of the work I’ve been doing, share a few MTA-related thoughts, and see if you’ve spotted any Dogs in Bags recently. Maybe I’ll do this semi-regularly if it seems to go over well.

A Quick Update On Where to Find the S/P Dog in a Bag Collection

Reader Michael Pollack suggested I make the Dog in a Bag collection easier to find, which was a great idea. So you can now find the Signal Problems Dog in a Bag collection at my personal website, aaronwgordon.com, where you can also find my bio, clips, things of that nature.

On that site, there is now a dedicated tab for Dogs in Bags. But that is mostly a portal to the public Google Photos album I created. Hopefully, this will help you access those when you’re in need of some dogs in bags. If you have fresh ones, send them along, and I’ll add them to the album.

Tearing Down Urban Highways

As for the work I’ve been up to, a lot in my first few months has been getting up to speed with how the automotive industry works. I’ve found it both fascinating and, often, infuriating. But I’ve learned a lot that has deeply affected my thinking on the future of transportation in this country and where we go from here.

In general, I find urbanists and public transportation experts do not understand (or come to grips with) how the automotive industry works, how it affects policy at the local, state, and federal levels, and how it impacts individual behavior in profound ways. Until we start to reckon with that, it will be very difficult to implement change.

Along a similar vein, I thought some of you might be interested in a feature I just published about the role of urban highways in America. It’s an issue I’ve had my eye on since the BQE debate began anew earlier this year. But this article is not about the BQE, at least not directly. It’s about a 1.4-mile stretch of highway in Syracuse. Like the BQE, that stretch of elevated highway is at the end of its useful life. Something has to be done about. And it’s been at the center of a fight between the city and its suburbs for almost a decade, dredging up old wounds about racial discrimination, white flight, urban renewal, and the decline of American cities.

The second I heard about this story, I knew I had to write about it, because it’s about so much more than a transportation project. It’s about how we have to acknowledge the sins of the past in a more meaningful way in order to make progress on the issues affecting us today. I hope you’ll take the time to read it. I hear it’s all the talk around the presidential debate podiums.

MTA Gets Business Consultant’d

The big story around MTA parts recently—other than the fact that we were all lied to about the real reason why Joe Lhota resigned—has been the reorganization plan recently passed by the board.

Nobody seems to be a fan of it. Even some board members voted for it on the assumption that it can be changed later. Far be it for me to tell board members how to do their jobs, but that doesn’t seem to be what voting for something means. Either way, this is a pretty standard MTA board member cop out maneuver. If I had a nickel for every time I heard “I have problems with this, but I’m voting for it anyways” I wouldn’t have needed to seek full-time employment. Despite the plan’s unpopularity, only one board member, Veronica Vanterpool, voted against it.

So what actually is this plan? You can read the full plan here, which was put together by the consultant firm Alix Partners. Personally, I find the plan itself too vague to analyze with any degree of certainty. It’s only 36 business school jargon-laden pages heavy on charts and light on details, a pittance for a plan that will in theory transform a 70,000 person organization with almost $17 billion in annual expenses.

I don’t want to be too alarmist about this plan. It could turn out mostly harmless, it could also be a disaster, or be anywhere in between; it largely depends on how management implements the bullet points.

I do, however, feel confident in saying it doesn’t address the fundamental problems I have spent many a Signal Problems documenting.

But I do see one aspect of this plan broadly speaking that, to me, attests to why the MTA struggles to be productive as an organization year after year, generation after generation. The problem is that this is is a business plan for an organization that is fundamentally not a business.

The MTA was founded in the 1960s during an era where our leaders tended to believe all problems could be solved through dispassionate pragmatism. This was the Whiz Kid era, when this optimization model was applied by our best and brightest to everything from building cars, foreign wars, nuclear war game-planning, and fighting fires (not to spoil the plot, but it didn’t work out great).

The MTA was created in the midst of this dispassionate pragmatist craze by then-governor Nelson Rockefeller to achieve numerous goals—one of which was to neuter Robert Moses—but a key one was to bring this businesslike approach to public transportation. The idea was the MTA, like all government, should be run like a good business.

This is the lie on which the MTA is built: that public transportation can be a self-sustaining business if run well enough. But, as decades of experience here and around the world have proven, this is simply not true. With the exception of places like Hong Kong that are in essence real estate companies that happen to run trains, public transportation systems require large government subsidies to function well. (Even Hong Kong gets indirect subsidies by exemptions to all kinds of property and tax laws.)

New York has, in practice, done away with this fiction by subsidizing the MTA with billions of dollars every year. But it has never completely shed the lie. For one, the agency is legally obliged to balance its budget every year. This is paradoxically something no actual business has to do yet meshes with the idea of government that should be run “like a business” and not lose money. It is, of course, deeply ironic that many, many venture-capital funded businesses now give the MTA a run for its ability to bleed cash.

The MTA is hardly the only government agency hand-cuffed by similar ideological confusion; the Post Office and Amtrak are two that come to mind.

Nevertheless, the MTA meets this requirement every year in part through the aforementioned subsidies and also a large amount of budgetary rejiggering that occurs on an annual basis.

The point isn’t that the MTA should be able to run a deficit—although I’m here for that suuuuper nerdy conversation—but that the reorganization plan’s biggest flaw, to me, is it buys into this lie big time.

Alix Partners is a business consultant, not a public transportation consultant. In fact, they seem to have little to no expertise in public transportation. The “transportation and infrastructure” section of their website is almost entirely about global shipping. There is scant evidence they have done any serious work in the public transportation sector prior to this $4.1 million contract.

Nor did they spend very much time on this reorganization plan at all; 12 weeks or so. These quick turnarounds are part of the company’s sales pitch, which is all well and good when tearing apart for-profit business after for-profit business. The implication here is Alix Partners did little to adjust their approach or strategy or even acknowledge the MTA might be a fundamentally different beast than, say, Enron.

This is a super important point because the MTA’s structure, governance, function, and even purpose are codified into law and cannot be changed as a business’s can. That is why we are here, trying to fix the MTA. And assuming it can be run like a business is why we keep ending up back here, trying to fix the MTA, every few years.

To take just one of many examples, consider labor, the single biggest cost driver for the agency when including both salary and benefits. Negotiations between labor unions and MTA management do not work like those in the private sector, because the labor unions are also a key constituent (and donor) to MTA management’s boss, the governor. In other words, the unions can, and do, play both sides.

“The governor has been the best governor for the trade union movement ever,” TWU president John Samuelsen told the New York Times after attending a Cuomo fundraiser earlier this year. This was mere months before contract negotiations between TWU, which has more than 40,000 MTA employees, and the MTA began.

This is emphatically not how labor negotiations in the private sector work. I’ve been a part of one collective bargaining negotiation committee and now work at another union shop, which just concluded its own round of negotiations with management. Suffice it to say, negotiations would have gone very differently if we somehow had a back channel to management’s ultimate boss with non-trivial leverage over his professional future. And these negotiations determine not only salaries and benefits but work rules and all kinds of requirements that drive up costs.

But that is just one example; an important one, but just one. Everyday issues like service cuts, fare hikes, and implementing faster buses become instantly politicized in a way no business has to contend with. Bus network redesigns take years not because it takes years to figure out optimal routes but because it takes years to convince politicians and the people why their bus stops will change.

A business consultant might look at these delays as inefficiencies—indeed, it is “inefficient” from a time-spent metric—but it’s not inefficient when considering these changes can only be successful with careful community-based coalition building, something Alix Partners’s other clients hardly have to contend with.

So what is the MTA if not a quasi-business? It is, as I have argued before, a public good. The fundamental problem at the MTA’s core, generation after generation, is it is not allowed to function like one, always shrouded in the faux-principles of businesslike pragmatism. The Alix Partners reorganization plan makes this confusion worse, and, as such, reduces the chances any fundamental issues will be fixed.

Dog in a Bag

MTA Rules of Conduct Section 1050.9 Subsection (h) Paragraph 2: no person may bring any animal on or into any conveyance or facility unless enclosed in a container and carried in a manner which would not annoy other passengers.

Have a dog in a bag photo? Reading this on the subway and see a dog in a bag? Take a picture and send it to signalproblems@substack.com.

Photo credit: Jody Avirgan

If you want me to send out more of these occasional S/P’s that keep you in the know of my recent work and include some MTA thoughts, let me know.

Travel speedily,

Aaron

This Is The Last Stop On This Train

Everyone please leave the train. Thank you for riding with Signal Problems.

Shortly after I became a subway reporter in the summer of 2017, I ordered a four-foot-by-six-foot subway track map. Unlike the traditional subway map, this one is geographically accurate. It also shows the terminals, individual tracks, and all the points where trains can transfer from one track to another. I hung it behind my office chair so I could easily consult it.

It’s hard to believe now, but less than two years ago, right around the time Governor Cuomo declared the MTA in a “State of Emergency,” appointed former MTA Chairman Joe Lhota to re-take the reins, and launched the Subway Action Plan, I knew little about the subway. Like every New Yorker, I knew it didn’t work very well, but I didn’t understand why. I hate not understanding why things are the way they are, especially when that thing makes millions of people miserable on a daily basis.

So, I decided to find out.

Track map. Photo credit: vanshnookenraggen

I felt like I was being dropped into a strange world, one using words and technology unfamiliar to me. But the more I learned, the more I realized that few people, even transit experts, truly grasped why the subway was so much worse than it used to be. And that, to me, was very interesting indeed.

For the first few months on the beat, I had a routine. As soon as a service alert was issued, I’d swivel to my track map and trace the lines to see where the problem was, what the re-routing possibilities consisted of, and which option NYCT chose. I did the same for every weekend service advisory. I had a rule that if I didn’t understand something, no matter how seemingly trivial, I had to find the answer.

Sometimes, I spent days locating a boring answer to an inconsequential question. Other times, that question, which likewise appeared inconsequential at first, proved the key to unlocking a vault of enticing details. Perhaps it contained a key phrase used in an important document—ISIM B was an exhilarating rabbit hole—or someone else had asked that same question years ago who was glad to be hearing from someone asking it, too. You just never knew.

At its core, Signal Problems was about my quest to answer these questions, to find out why things are they way they are. Or, as I put it in the tagline: “What the hell is going on with the NYC subway.”

It was a newsletter about a very specific subway era, one I have occasionally described as The Great Slowdown.

This era is over. Subway performance is improving. Although some of those improvements are due to schedule adjustments, the number I tend to hear most often is that roughly half of the improved on-time performance is a result of running the trains better. It’s far from perfect, but it’s much closer to the performance New Yorkers became accustomed in the late 2000s and early 2010s, probably the single best era for subway riders in the city’s history when balancing operational efficiency and creature comforts. As long as Andy Byford remains in charge, I expect those improvements to continue.

I also wrote many articles about the Project Formerly Known As the L Shutdown. Repairs are still happening, but the (minimal) service issues resulting from the new plan—as well as potential long-term ramifications—are not the same as the ones I covered as a full-time subway reporter.

Yes, The Great Slowdown is over, but a new era of the MTA is beginning. It is one where Andy Byford is no longer the face of MTA reform as he was for much of 2018, thanks to what appears to be a deliberate effort from Albany to supplant his achievements with the efforts launched by Governor Cuomo. Pat Foye has taken over the MTA, giving the authority a full-time leader for the first time since I’ve been reporting on it. The board has experienced significant turnover. It is still very much the MTA, but a slightly different one.

What will this new era bring? So far, it has been replete with promises of reform, including the passage of congestion pricing. If all goes according to plan, this will provide sustainable funding for the MTA so whether the MTA receives checks is no longer subject to Albany's whims.

Some of these so-called reforms, however, are already having a deleterious impact. The MTA is running the risk of missing out on a generation of young, passionate employees. A number of my sources, or coworkers of those sources—people I generally believe to be smart, capable individuals that wanted to help make NYCT a better organization—have left for other jobs, fed up with an authority hamstrung by an asinine hiring freeze that was never formally announced or instituted in any transparent way. Further, they perceive Governor Cuomo’s constant interventions as undermining their efforts rather than aiding them, a dynamic exacerbated by his frequent childish ridiculing of the very authority he controls. Another cohort of young, eager potential employees can’t get hired at all, because of either Kafkaesque HR hoops or the aforementioned hiring freeze.

Not only is a hiring freeze a clumsy tool for addressing bloat—it requires no actual reckoning with where the bloat is and how it became thus—it plugs the talent pipeline, meaning in five, ten, or 15 years’ time, it will be harder to find the next generation of capable transit employees to make the leap to a management position. This problem has the potential to evolve into a crisis as each agency—particularly Metro North, but certainly not exclusive to them—faces a glut of retirements in the coming years. Cuomo may be winning the battle about changing the way the MTA operates, but by scaring away the most talented and dedicated young employees, he’s losing the war.

In addition, none of the reform efforts enacted to date have seriously addressed the biggest drivers of the MTA’s bloated expenses. Until the very recent hullabaloo around LIRR overtime expenses—to call it the MTA’s worst kept secret would demonstrate a profound misunderstanding of the concept of a secret—not a peep had been made from the current administration about reforming labor costs, including health and pensions. Health care and pensions combined account for more than 20 percent of the authority’s annual budget, which like many aspects of American health care can be rationalized without noteworthy cuts to the actual benefits employees or retirees receive.

I have zero expectation these problems will be addressed, as the union and the current administration sing each others praises weeks before their contract expires. This, along with the MTA’s debt load of approximately 16 percent of its annual operating budget, leaves the authority vulnerable in the case of a recession, something three-quarters of economists believe will happen by 2021.

On the construction front, reducing costs to merely “very expensive” and timelines to merely “very slow” would be a triumph. Promises have been made. This is not the first time. Should those promises be kept, that would indeed be a first. Early signs are not encouraging; the Second Avenue Subway Phase II, up to 125th St and Lexington, is slated to eclipse the Second Avenue Subway Phase I as the most expensive subway per mile on Earth.

Which is all to say, the next era of the MTA will likely consist of permutations of familiar problems. Readers of Signal Problems, and all New Yorkers, deserve diligent watchdogs holding all responsible parties accountable.

The single biggest reason I am shutting down Signal Problems is because I can no longer be that. Hopefully, someone else can.

For all the little factoids about the subway I’ve accumulated over the time I’ve written this newsletter, the most important lesson I’ve learned has been just how complacent we all were about the goop of inefficiencies at nearly every level of the MTA before they coagulated into a viscid bureaucratic molasses. It is my sincere hope that the MTA, state and local politicians, journalists, activists, and we, the riding public, do not make the same mistake again. Otherwise, we’ll be back in crisis before we know it. We built the vast majority of this epic wonder that sustains our city in a mere 40 years. What will the next 40 years bring?

I always struggle to articulate the subway’s importance without veering into hyperbole. But after staring at the track map for so long, I realized the map does that better than any words of mine could. Instead of the subway being the city’s hidden arteries and veins, the layers are flipped. The empty white spaces appear barren. The gray airports are insufficiently linked to life, like a comatose patient desperately needing a feeding tube.

Between it all, the lines and connections, the depots and abandoned tracks, is a story of a city, a great city that has become less great in large part because its commitment to this tremendous system has wavered. That commitment cannot be measured merely in dollars. It must also be measured in our determination to wrestle with the forces of selfishness, greed, and thirst for power that have long perceived the subway as a mere bargaining chip. It is a commitment that speaks to the very essence of who we are and what we, as a city, want to be.

To be sure, this would be a break from our past. It is also very much in contrast with the current political moment, where the glorification of unabashed, naked selfishness is the grand unifying trait of modern American society. But if New York is truly as exceptional as many of its most fervent boosters believe it to be, the Greatest City In The World™, then we ought to be up for the challenge. Whether that task yields success, failure, or the vast dark tunnels in between those two terminals, I’ll be following along, hoping for the best.

Finally, I have a parting gift for you, my dear, dear Signal Problems readers.

I received pictures of dogs in bags on the subway at a far higher rate than I could publish them. Sometimes, I would receive these photos during difficult days. But every time I got one, I couldn’t help but smile. The randomness with which I would receive these glorious treats made me realize that, at any given moment, there is probably a dog in a bag on the subway. Therefore, there is always something to smile about.

So, as a small token of my appreciation for all the wonderful support you have provided during such a difficult yet fruitful time in my career, here are 152 dogs in bags, including dozens that I never got around to publishing and all of the ones I did publish. May they be a source of joy and comfort during the longest of delays.

Speedy travels,

Aaron Gordon

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