Progress Derailed: The Cause & Effect Of NYC's Transit Funding Crisis

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Rush hour at the Atlantic Avenue-Pacific Street station in Brooklyn. Service cuts and far hikes reflect deep structural flaws in how New York finances its transit that could pose serious challenges to the city's economic stature.

Photo by: Marc Fader

Rush hour at the Atlantic Avenue-Pacific Street station in Brooklyn. Service cuts and far hikes reflect deep structural flaws in how New York finances its transit that could pose serious challenges to the city's economic stature.

If one day's events can illustrate the spectacular low point of disrepair that the New York City subway system reached in the 1980s, that day might well be January 8, 1981, when 1,000 passengers crowded into a broken train at Hoyt-Schermerhorn station collectively refused to leave for it to be taken out of service. Many said they had already been ordered off of other broken trains, and besides, the platform was too crowded to hold many more people.

The impasse finally eased, after police had arrived, when Metropolitan Transportation Authority workers handed out tokens for free transfers. The congestion pricing plan that Mayor Bloomberg supported—in which drivers would pay a fee to enter Manhattan on weekdays—would have provided a stable, predictable and sizeable revenue stream for mass transit : about $420 million a year by Petro's estimate.

After the state Assembly failed to take up that proposal in 2008, a commission headed by former MTA chairman (and now lieutenant governor) Richard Ravitch formulated a series of recommendations to stabilize the agency's finances. One of those, involving tolls on the East River bridges, also fizzled in Albany. Another, a regional payroll tax, was implemented, but has generated lower-than-expected revenue, while facing tepid support and outright opposition from local elected officials.

Henderson, for one, says some of those tax opponents, particularly those from outside the city, have a point: The tax places a burden on many people in the region who don't use much transit. Others, like Russianoff, argue that even those people benefit indirectly, by being within the orbit of the huge (and transit-dependent) economic engine that is Manhattan. But either way, both men say, congestion pricing would have been a neater solution, generating revenue for one, more efficient mode of transit while discouraging its less efficient counterpart.

A bill will come due

No large mass transit system makes enough money from rider fares to pay for itself; every system needs subsidies from somewhere. And the subsidies are worthwhile, transit advocates say, because of the greater benefits transit brings to a region.

Finding someone willing to pay the subsidies is the hard part. In the MTA's case, the absence of that special someone has hurt the agency two times over. First was when the state and city governments stopped directly funding the capital plans, forcing the agency to borrow money to expand and repair itself. The second time was when potentially stable funding sources were dismissed as politically unpalatable.

Pondering the MTA's future, transit analyst Yonah Freemark, writing at The Transport Politic, compared New York's transit system to the system in Paris. Both are dependent on tax revenue, he noted, but in Paris, the money comes from regional income taxes, which are more stable than New York's real estate-based taxes. Even if that stability should fail, he said, Paris has a safeguard: There, if the need for transit service expansions outstrips tax revenue, local governments are mandated by national law to pay the difference.

In New York, obviously, there is no such mandate. In the absence of a viable plan from state elected officials to keep the transit system in good health, Petro argued, the MTA's troubles will continue.

“They're really just kicking the can down the road, and it's going to mean more pain for riders,” he said, adding, “All the tinkering we do and belt-tightening is not really going to address the problem. Hopefully voters will realize that the source of their grief is not this nameless, faceless authority, but the people that they vote for.”

This is the third and final part of a series on the implications of recent MTA service cuts. To learn about how much more crowded some trains are going to be, click here. To see the impact of bus cuts on some New Yorkers, click here.