How many times have you heard someone say, “If only our city had a transit system like New York City’s. Then lots of people would ride transit!” Everyone seems to take it for granted that New York’s subway system is wonderful. Even the Antiplanner’s faithful ally, Wendell Cox, includes the New York subway among his short list of “urban rail success stories.”
Modern transportation.
Flickr photo by PhillipC.
But there is trouble in Gotham City, and not the kind that can be solved by a batman (unless he is a very, very rich batman). In technical terms, the Metropolitan Transportation Authority (MTA) “is in deep doo doo.” In financial terms, the MTA needs to find $30 billion to rehabilitate its subways over the next five years — and is somewhere around $17 billion short. That’s about $2,000 per New York City resident. Not even Bruce Wayne would be willing to donate $17 billion to the Gotham subway system — especially when it would probably demand another $17 billion or so just a few years later.
Take a quick look at the numbers: In 2006, MTA subways carried about 8.4 billion passenger miles. Fares covered two-thirds of operating costs, but only about 40 percent of operating plus capital costs. The average age of the 6,200-car subway fleet is 22 years, and more than 1,000 cars are over 30 years old.
This raises one of the Antiplanner’s pet peeves, that of calling the replacement of worn-out cars, track, and other equipment a “capital improvement.” Technically, a capital improvement is something that adds to productivity. A cost that merely maintains existing productivity is, by definition, maintenance. But the rail transit industry manages to call most of its maintenance costs “capital improvements,” which deceives voters and appropriators into thinking they are getting some improvement for their tax dollars when in fact all they are doing is subsidizing a cost that should be paid out of fares. But I digress.
Because of the maintenance, er, capital shortfalls, New York subway riders are suffering from increasing breakdowns. Ironically, a recent city report that rated the L train as the least delayed overall was published just a few weeks after the New York Observer described the L train as “bringing New Yorkers together, one service disruption at a time.”
To deal with gas-price-induced ridership growth, MTA is going to offer seatless subway cars during rush hour. To increase the number of people it can cram on a single car, it will force everyone to stand. To add insult to injury (or maybe the other way around), MTA is planning several fare hikes. It is also worth noting that New York City residents spend more time commuting than workers in any other U.S. city, mainly because so many take transit and transit is so slow.
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Flickr photo by DominicVine.
According to a New York Daily News editorial, it is somehow unfair to ask subway riders to pay their own way (or even 40 percent of their own way). The “fare plan” (get it? fare = fair), says the paper, is for the state of New York to “rescue” MTA with increased subsidies.
According to a New York Daily News columnist Michael Daly, this is appropriate because MTA’s problems stem from state budget cuts in 1995 that reduced state subsidies and forced MTA to finance improvements by issuing $10 billion in new bonds. According to MTA’s budget, those bonds along with existing debt means that MTA is spending $1.6 billion this year in debt service alone — an amount that is expected to grow to $1.9 billion by 2010 (see physical page 62). New York Governor David Paterson has appointed a commission to find some solutions to MTA’s problems.
But MTA’s real problem is that transit agencies and supporters feel they are entitled to huge subsidies at everyone else’s expense. Daly, for example, complains that the federal government is neglecting its obligation to the subway system. Why should the feds give $36 billion to corn farmers to make ethanol, he asks, and not give one red cent to operate the subway system? Of course, Congress did give MTA a whopping $1 billion for capital improvements (as the transit industry defines them) in 2006.
Daly’s reasoning is the kind of thinking that led to a $10 trillion federal debt; as in, “somebody over there is subsidized, so why don’t you subsidize me!” Or, as an advocate of turning Lawrence Welk’s childhood home into a national park once put it, “If there is money to be wasted, it might as well be wasted here.” The right answer to Daly’s question is that the feds shouldn’t give $36 billion to corn farmers any more than it should give billions to New York City transit riders.
New York’s Mayor Bloomberg’s solution for MTA was a so-called “congestion-pricing plan” (but really a cordon-charge) in which auto drivers entering Manhattan would get to subsidize subway riders. When that didn’t sell, he proposed to a millionaire’s tax. But as long as we keep promising to bail out ridiculously expensive transit systems, they are going to keep planning insanely expensive new projects such as the 2nd Avenue subway. As if MTA didn’t have enough problems, now it is even talking about building light rail.
According to Wendell Cox, the only rail transit operations in the world that pay their own way are in Hong Kong and Tokyo. By Cox’s calculations, the Tokyo urban area is about three times as dense as the New York urban area, while Hong Kong is 15 times as dense. Maybe rail only makes sense at such high densities.
Why should paying its way be the test for a transit system’s success? Partly because a system that can’t pay its way ends up suffering repeated financial crises, breakdowns, and imposing other indignities (seatless subways?) on passengers.
Beyond that, there is the whole question of sustainability, which is (or ought to be) an economic issue as well as an ecological one. If the U.S. looks unsustainable today, it is as much due to our huge deficits — imposing ever-increasing obligations on future generations — as it is to energy consumption.
So the next time you hear someone laud the New York transit system, ask them if they mean the system that is running a $1.9 billion operating deficit (including bus operations)? Or the one whose 2008 revenues (including all subsidies) are expected to be $900 million less than costs? Or the one that is perpetually in some financial crisis or another? No matter which one you pick, MTA is just one more reminder that rail transit is really, really expensive.
I suppose there is zero talk in NYC of having any private entities operate these lines? Same with no chance of NYC selling them off?
I suppose there is zero talk in NYC of having any private entities operate these lines?
I hear Enron, Bechtel and KBR put out feelers. Nothing yet.
DS
Then how about Mary Peters recent taking of transit funds to be spent on roads?
Antiplanner,
It doesn’t matter if the NY-MTA doesn’t have its finances in order, because the taxpayers will always bail the agency out. They may have plenty of rail cars that are nearing the end of their useful life and plenty of track in need of rehabilitation, but that isn’t stopping the NY-MTA from getting around to finishing the infamous $1 billion+ per mile 63rd Street tunnel to nowhere under the East River that was started 30+ years ago, but was then abandoned. The tunnel, as has been noted, truly is a testament to high aspirations and low finances.
highwayman said:
Then how about Mary Peters recent taking of transit funds to be spent on roads
———-
Where did the transit funds come from?
Transit user fees?
Transit taxes?
Windfall profit taxes on transit?
Antiplanner wrote:
“In financial terms, the MTA needs to find $30 billion to rehabilitate its subways over the next five years  and is somewhere around $17 billion short. That’s about $2,000 per New York City resident. ”
That’s one way of looking at it. Another is, that to use the cheaper freeways the average cost of the family car is going to be the thick end of $10,000/year (?). $100/yr (@5%) is a bargain by comparison. The total costs (vehicle/infrastructure/time) need to be compared.
“But as long as we keep promising to bail out ridiculously expensive transit systems, they are going to keep planning insanely expensive new projects such as the 2nd Avenue subway. As if MTA didn’t have enough problems, now it is even talking about building light rail.”
It does seem that they’ve not fixed one problem, before they’re spending money that they don’t have.
“According to Wendell Cox, the only rail transit operations in the world that pay their own way are in Hong Kong and Tokyo. By Cox’s calculations, the Tokyo urban area is about three times as dense as the New York urban area, while Hong Kong is 15 times as dense. Maybe rail only makes sense at such high densities.”
It’s not really population density that counts, but trip density – how many people who are prepared to use the subway live/work/etc. close enough to a subway station. J.H. Crawford has written a flawed but interesting book called ‘Car Free Cities’ (very much recommended). The point is that his proposed urban development system uses subways. This part of his system, at least, should work, since the citizenry can walk or use the subway. That’s the choice. Under those circumstances, trip density will be very high, and a subway will be the best choice.
In his proposals, the subway will be free, since it is as much a public utility as are roads…
“Beyond that, there is the whole question of sustainability, which is (or ought to be) an economic issue as well as an ecological one. If the U.S. looks unsustainable today, it is as much due to our huge deficits  imposing ever-increasing obligations on future generations  as it is to energy consumption.”
Yes, I agree that this is very important – not least, because under the democratic system a new government or administration can decide to cut off a system if they think it is too expensive, even if the original team was very enthusiastic.
Those funds came from the same pot where you get your funds from.
All taxpayers!
FrancisKing wrote at no. 6:
“In his proposals, the subway will be free, since it is as much a public utility as are roads…(emp. added)”
Because you don’t pay for it, doesn’t mean it’s free. BTW, an unlimited-ride monthly subway pass runs $81/month; for regular riders it’s actually cheaper to ride the subway now than in 1983.
For all the complaining of Michael Daly and the straphangers.org lobby, NYC transit did very well under the current administration. In addition to the MTA’s regular skim, the $1.3 billion of federal pork for the Second Ave. subway came via Sec. Mary Peters back when the MTA Chairman was a major Rep. party fundraiser and Mayor Bloomberg was still nominally a Republican.
Politically, the future is not all that dim for NYC transit — considering that NYC will shortly have a Democrat as Mayor, two Democrats as senators, Sen. Obama will become President, and “congestion pricing” will pass this time (Richard Ravitch put it on the table yesterday), there should be enough $$$ to keep the MTA at its present level of incompetence. As Ravitch is firmly tied to the public benefit corporation model of public transit and was Chairman of the MTA 25 years ago when it went the bonding route that’s about the best that can be expected, any real reforms being politically impossible.
FrancisKing wrote at no. 6
“In his proposals, the subway will be free, since it is as much a public utility as are roads…(emp. added)
Because you don’t pay for it, doesn’t mean it’s free.”
Indeed. His arguments were as follows – A large proportion of the costs of running the service doesn’t come from the farebox. The apparatus to collect the fares takes up space, and costs money. It also means that the subway cannot be made closer to the sidewalks, since a money collecting hall is required. Since everyone is using it (in his car-free city), no-one can object to paying for it. The last point, of course, is not generally true of transit.
I’m curious as to how Crawford deals with free riders.
Theodore Kheel, former chief labor arbitrator for NYC and a well-known political figure in the city, has been advocating a no-fare subway for over 40 years. However, the problem in NYC is not getting people to use public transit, but how to pay for the transit they use. Given that NYC’s public transit system will most likely never be privatized, and FWIW I don’t believe that it should be, it should be brought back into the city administration. As it stands, the Authority has neither financial nor political accountability.
Given that NYC’s public transit system will most likely never be privatized, and FWIW I don’t believe that it should be, it should be brought back into the city administration.
Bear in mind though, that this is a city that went bankrupt during the 1970s and became a ward of the state.
MJ wrote above:
“…this is a city that went bankrupt during the 1970s and became a ward of the state.”
True (although BK was never filed it was close). My suggestion would require the public transit system to go on a very strict budgetary diet: not likely to happen.
BTW, I checked the the walkscore(tm) for the Bronx version of TOD pictured above and got a score of 75 — Very Walkable!
Well New York’s rail was once almost 100% private, but since roads today are not ran at a profit or loss basis, in a funny way why should transit?
Private entities running MTA, what! Have you rode SEPTA?
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