In 2009, the MTA was in a fiscal crisis—hardly the only ones at the time—and threatening massive service cuts and fare increases, up to 30 percent, unless it got more state funding. A commission, led by former MTA chairman Richard Ravitch, wrote a report that recommended a number of measures to both fund the MTA and ensure it didn’t get into this mess again. One of its key findings included:
Fundamentally the MTA’s deficit is rooted in a structural budget imbalance driven by years of over-reliance on self-supported debt to fund its capital needs. This has led to large and growing debt service payments made through the operating budget that have placed extraordinary pressure on the farebox.
In other words, they borrowed to much to pay for long-term capital needs, and now that debt service is crippling their annual budget.
The commission understood it was hardly the time to be asking taxpayers to dig deeper “before demanding that MTA management do everything within its power to control expenses, maximize productivity and invest capital prudently.” Nevertheless, it assured the public, they had discussed with MTA management how to “control both operating and capital costs. Especially noteworthy are new initiatives to reorganize management of the subway system, restructure bus operations, and to consolidate back office functions agency-wide.”
The service cuts and draconian fare increases never happened, but neither did the operating or cost efficiencies. Rather than control spending on the capital budget, it spiraled even further out of control. If any subway management changes occurred, they brought us the leadership which oversaw one of the most egregious unforced errors in modern public transportation history.
What about the goal to “consolidate back office functions agency-wide?” Time is a flat circle. The first point of the Cuomo-De Blasio 10-Point Plan, announced in February, promises to consolidate “all common functions such as construction management, legal, engineering, procurement, human resources, advertising etc.” into “a central operation.”
In the first half of 2009, after months of haggling in Albany, the MTA got its money, for the most part. The biggest chunk came from a new payroll tax of .33 percent (33 cents per $100) from employers and self-employed individuals in the MTA counties. That tax still exists. It yielded $1.5 billion last budget.
This time, a decade after the Ravitch report, it is not a payroll tax but congestion pricing that will save the day. As with the 2009 haggling, the late-hour focus has shifted to the issue of carve outs. In 2009, it was schools, which were exempted from the payroll tax at the urging of Albany Republicans.
In 2019, it’s looking like a whole host of motorists may be exempted from congestion pricing. Motorcycles, motorists over certain bridges or through certain tunnels, people from New Jersey, the disabled, low-income people, those attending medical appointments, and farmer’s market trucks have all been floated as potential candidates for carve outs. As of this writing, no deal has been reached—indeed, essentially none of the details regarding congestion pricing as a whole have been determined—so only time will tell which, if any, of those stick.
Some of those exemptions are less defensible than others, but all of them fundamentally undermine the principle of congestion pricing, from when the idea was about far more than an MTA revenue scheme. Driving into the Central Business District, one of the densest places in the country where space is among the most expensive in the world, has costs. The people taking up the most space on on the roads should bear some of that cost. Merely because someone is going to a doctor’s appointment, selling tomatoes at a farmer’s market, or coming from New Jersey doesn’t alter that fact. If you’re in the traffic, you are the traffic.
It’s easy for electeds to demand carve outs when congestion pricing is being put forth as a revenue generator first and foremost, a way to bail out the MTA’s debt problems. In that case, each carve out is not a violation of the concept’s core principle, undermining its fundamental fairness and prompting all sorts of people to step forward demanding me too, but merely a little less money in the pot. It doesn’t sound so bad until it all adds up.
While Albany hashes out the details, scant attention is being paid to the part of the equation that will make or break this pivotal moment in MTA history: the actual reform that must take place to ensure we’re not right back here in another decade, or even sooner. Money can come from anywhere, but reform can only come from one place, the same place that has failed so many times before.
Cuomo gave a token “yeah, we haven’t forgotten about that” comment Friday evening, but it hardly inspires confidence given how few details have been presented and the budget deadline of April 1 looming. As good governance watchdog Reinvent Albany noted, reform is a complicated, detail-oriented process that deserves at least some discussion and oversight. We haven’t gotten that.
Liz Benjamin @CTLizB.@nygovcuomo won't accept congestion pricing without reform of MTA. Also: "Campaign finance reform is a priority for me in this budget. I would be very disappointed if we don't get it...I don't see any reason why we can't...everyone says they support it. Well, then, let's do it."
Why should we believe this reform process will go any better than the last one? Why should we believe congestion pricing revenue will have a bigger impact on the authority’s debt than the payroll tax? Why should we believe this time is any different?
Should it pass in any form, congestion pricing will almost certainly leave New York City better off than it is today. The degree of that improvement, and for how long it sticks, depends entirely on the details currently being hashed out in Albany back rooms by a group of people incentivized to prioritize a very narrow set of interests rather than what’s best for the metropolitan region as a whole. It’s not about the people, but the structure, the process, the same one that has landed us here time and again. Don’t worry, though. This time is different. They promise.