In October 2018, Richard Ravitch invited me to his office for a chat. I had called the former head of the MTA, who is widely credited with rescuing the system from the doldrums of the 1980s, to ask if he remembered a particular MTA board meeting. I don’t remember precisely what he said, but it was something to the effect of I thought no one would ever ask. Please come see me.
Ravitch attended hundreds of MTA board meetings in his career. But this was different. This meeting was in February 2014, long after he had left the agency. In fact, it was his first board meeting in 31 years. And he attended not as the chairman, or a returning hero, but as any ordinary person. He put his name down to submit a two-minute comment.
The issue that moved Ravitch so much that he felt compelled to do this was a $7 million political gambit by state politicians to curry favor with suburban swing voters prior to a pivotal election. They enacted a toll rebate program on the Verrazano Bridge for Staten Islanders. The MTA board had to approve it.
I urge you to listen to his testimony here. It is vintage Ravitch. He was there to remind the MTA board members about a 2010 law called the Public Authorities Reform Act which defined the obligations of the MTA board to be responsible fiduciaries of the agency. Their sole obligation was to the mission of the authority and the authority itself.
“As I understand it,” Ravitch said,
“lowering these tolls will result in reduced revenue and consequently reduce capacity to incur debt for capital purposes in your next five year plan, for which, as I understand from the press, you do not yet have the resources to come close to meeting what the demands of this authority and the demands of the public transportation system in this region are going to require.”
In other words, the board was about to vote to give up money that would make it harder to pay for necessary things it already was struggling to afford, just to appease some politicians.
He continued: “I feel strongly enough about this, remembering all the battles that I fought to eke out every possible penny of revenue for this authority, to urge you to think very hard before you vote to voluntarily reduce the revenues to the MTA,” Ravitch concluded in his speech that day, “for not just the reasons for your fiduciary responsibility, but because of plain, simple common sense.”
Sitting in Ravitch’s office in 2018, I asked him what happened next. The toll rebate program passed with unanimous approval. And Democrats lost the Congressional district on both sides of the Verrazano Bridge by 13 points. It turned out that saving 50 cents per crossing didn’t sway many voters.
And what about the board, I asked? Ravitch laughed. “Nobody gave a crap. Nobody,” he repeated for emphasis, “gave a shit.”
I never intended to send another edition of Signal Problems. But I feel compelled because of the sudden, shocking, and potentially devastating reversal by Kathy Hochul to cancel congestion pricing less than a month before it was set to begin. If Ravitch, who passed away last year, cared enough to go to a board meeting for the first time in 31 years, then an even bigger crisis is important enough for an emergency edition of Signal Problems.
This time, we’re not talking about $7 million, the annual cost of the Verrazano rebate program, an amount even Ravitch admitted at the time was relatively inconsequential on its own. It was the principle of the matter that bothered him so much. Today, we are talking about more than principle: $15 billion in bonds to be issued immediately, and paid off over time with the $1 billion in annual revenues the toll would have created. It is, in essence, the funding for the plan the MTA has to make the system better.
I spent a lot of time in this newsletter poking at the details of how the subway runs. The details, of course, matter a great deal. That is why it is profoundly disappointing each and every time politicians who make consequential decisions don’t understand those details. Hochul said during her press conference Friday evening—a 7:30 p.m. press conference on a summer Friday, lest anyone be mistaken about how desperately she is trying to hide from her decision—that “pausing” congestion pricing is no big deal because it would have taken time for the MTA to accumulate enough toll revenue to spend it on big projects. This is not how issuing bonds works, it is not how the MTA’s capital plan works, and it is not how public authorities work.
To be honest, I can’t adequately assess Hochul’s other statements on the matter because they are so nonsensical. She canceled congestion pricing because some diner customers in Midtown Manhattan told her to? She had two days to think of a better excuse than that.
Signal Problems was not about nonsense. It was about details. And the details are what Ravitch would have wanted me to talk about. Specifically, the details about the Public Authorities Reform Act. I am not a lawyer and, frankly, no lawyer could give a straight answer on the implications of this particular section of this particular law, because it has never been tested in court. But I will tell you what Richard Brodsky, the politician who helped write the law and who died in 2020, told me in 2018. He said they wrote the law “in order to make it absolutely clear as a matter of law that the transportation policies of the MTA are to be set by the board, not by elected officials.” They did this because the entire point of the MTA is to be an independent authority, separated from politics as much as possible, in order to make the best decisions for the agency and for its customers.
The Cuomo era made a mockery of that law, which is why I ended up talking to Ravitch and Brodsky about it, although I regret never publishing their remarks until today. I became convinced, wrongly I now believe, that Brodsky, Ravitch and I were the only three people who gave a shit about this obscure state law.
If I could summarize Signal Problems’ purpose in one sentence—other than its tagline “What the hell is going on with the subway”—it was to elucidate the contradictions between the MTA being an independent authority while also utterly beholden to Albany and the Governor in particular. Signal Problems was about how this contradiction makes the MTA work in the only way it can: poorly, but just well enough.
I could never have imagined a clearer example of that contradiction than what we have before us. On the one hand, we have an MTA board that has approved a program to fund the five-year capital program with $1 billion in annual congestion pricing revenue, a power granted to it by the state legislature and governor in 2019. On the other hand, we have a governor saying “don’t do that” with no alternative. The board has a choice. It can keep the congestion pricing money or it can give it up. The board and the MTA hierarchy, for all practical purposes, answers to the governor’s office. But what if the governor tells them to violate plain, simple common sense?
Does the governor have the actual power to do this is a real question, with an answer that is basically “no” but also “yes.” So the more practical question is: Does the MTA board have the power to refuse?
I don’t have the answer to that question. The law is clear, but laws are just words written on paper. You might recall another time when a governor, with no warning, suddenly canceled a major MTA project to everyone’s shock and surprise. I speak, of course, about the time Andrew Cuomo canceled the L train shutdown. Even the origin story for that one—the infamous unnamed assailant who supposedly shook Cuomo by the lapels—bears a Regular Joe resemblance to Hochul’s diner customers. But there was one big difference. I don’t recall anyone seriously doubting that Cuomo had the power to cancel the L shutdown. Everyone knew the board and the MTA would do as they were told.
With the L shutdown reversal, the board held an emergency meeting that didn’t settle much of anything. Ultimately, of course, the plan went through, as everyone knew it would. Here’s what I wrote at the time:
Those in favor of the plan, including Cuomo himself, hail it as innovative, as if this word alone can assuage all doubts. But innovation is not a magic wand that can be used to cast away uncertainty. It is not a puff of smoke into which doubts disappear. It is just a word, a particularly vapid one at that, frequently deployed by those who wish it was all of those things. In the infamous “L shutdown averted” press release, the MTA used the word “innovative” four times.
But there is something innovative about this whole mess. This plan three years in the making got reversed on a dime. Nobody could stop it. Nobody could challenge it. And the person who made it happen, the only person whose opinion truly matters, says he doesn’t even control the MTA. To exercise complete control over something you don’t actually control? That must have taken some serious innovation.
I don’t know what the future of congestion pricing looks like, but I do know this is no L shutdown and Hochul is no Cuomo. The whole reason Cuomo passed congestion pricing—and make no mistake, Cuomo got it done—was to fund the capital program. He would never have killed it with no alternative. Not because he gave a crap about subway riders, but because he would need a plausible alternative so it didn’t look like he was punching the MTA in the gut, pulling its underwear over its head, and taking its lunch money. Hochul’s pathetic political mistakes are what opens the very real possibility that this isn’t over. As unpopular and problematic as congestion pricing was, reversing it with no notice and no plan is even less popular. Her obvious weaknesses as a politician and a leader make it possible for important people to stand up to her. The mere fact there’s a live debate about whether Hochul can do this goes a long way towards answering the question.
And most critically, the unprecedented support from everyday New Yorkers who refuse to accept Hochul’s decision gives politicians the political backing to challenge her. New Yorkers have been flooding the phone and fax lines of virtually every politician in the state. Multiple outlets have reported that the cancellation of congestion pricing has resulted in some of the highest call volumes New York politicians ever experienced, almost entirely pro-congestion pricing. State politicians refused to go along with Hochul’s plan, for now at least, by not supporting other tax hikes to temporarily plug the MTA’s fiscal gap. These politicians were able to do this because of those calls and faxes, because of that outrage.
This is what I suspect Ravitch would have wanted me to say to you all. He would have been thrilled that we were no longer the only New Yorkers making phone calls about the Public Authority Reform Act and demanding the MTA actually act independently for once. I think he would have been overjoyed to see New Yorkers give a shit about this.
This is how it often feels to live in New York. You think you’re all alone. And then, all of a sudden—as someone on a stalled Q train once told me—we’re all in this together.
Aaron
PS: You didn’t think I was letting you out of here without dogs in bags, did you? (Pro tip: click the button on the top right to change to thumbnail view for easy scrolling)