Can New York City Afford Its Subways?

This is a question the Antiplanner asked almost exactly one year ago, but it comes up again because New York governor Andrew Cuomo and mayor Bill de Blasio are still arguing who should pay to repair the subways. Those subways are contained entirely within New York City. They were built by New York City. They are owned by New York City. Yet New York City mayor Bill de Blasio argues that all of the projected $37 billion cost of restoring the subways to a state of good repair should be paid by the state, not the city.

de Blasio’s reasoning apparently is that, although the city owns the subways, it has leased them to the Metropolitan Transportation Authority, a state agency that also manages commuter trains and other transit lines that connect New York City with suburbs in Connecticut and New York. de Blasio claims to fear that, if the city gives any money at all to the MTA, it will spend some of that money on transit outside of the city.

New York governor Andrew Cuomo is willing to meet de Blasio halfway, agreeing that the state will pay for half the cost if the city picks up the other half. “We’ve lost a year because the city wouldn’t pay” its share, he says. Comments on the Gothamist article reporting Cuomo’s statement show that New York City residents don’t think much of this argument.

New York is the one city in America that even the Antiplanner agrees depends on rail transit. But if the city couldn’t exist without its subways, and it refuses to pay to maintain them, then maybe the answer is that it shouldn’t exist, at least not with two million jobs located in seven square miles on Manhattan. New York City residents claim they already pay more than their share of taxes, but that’s just a matter of demographics: high housing prices have pushed low-income people out of the city, so the ones who are left tend to pay more taxes. That doesn’t excuse them from paying the full costs of the transportation services they use.

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Don’t believe it? In 2016, MTA spent $32 per vehicle mile running New York City transit buses. That’s twice the cost of the next-most-expensive operator in the New York area, and many spend as little as $4 to $6 per mile. If privatization could cut costs in half, the subways — which currently cover 60 percent of their operating costs — would earn an operating profit, and some of that profit could be used to restore the system.

Still, I doubt that the system could earn enough profits to pay the $37 billion maintenance backlog plus the $18 billion unfunded pension and health care obligations. So fares would have to increase, and increased fares would reduce ridership. Some employers might decide to move out of Manhattan, which would make New York City a less-congested, less-expensive place to live.

I am dubious that the subway is affordable. After all, ridership is declining even without raising fares. I suspect the city and state will come up with band-aid solutions to the subway’s problems. They certainly aren’t going to do anything drastic, like halting construction of the Second Avenue Subway — the second-most expensive subway line in the world (the first being the East Side Access line, which technically is for commuter trains, not subways, so maybe the Second Avenue Subway really is the most expensive). Instead, it will be politics as usual, and the result won’t be good for New York transit riders.