Winter 2004, p.25

Sensible Transportation
NYC Subways and Buses Speeding Towards Budget Disaster

The MTA is projecting a crisis-level budget deficit that will only get worse unless the State increases its funding.
The MTA is projecting a crisis-level budget deficit that will only get worse unless the State increases its funding.

According to top MTA officials, New York City subways and buses are bleeding an ocean of red ink, which means that transit riders will face a double whammy of a steep fare hikes and service cuts unless the state legislature comes up with big money. Katherine Lapp, the MTA’s Executive Director, told the legislature that the MTA will have a deficit of $688 million in 2005 and that this deficit will grow to $1.4 billion by 2007. Lapp said that state funding for the MTA has not kept up with the 40% increase in ridership since 1996.

The transit budget crisis is made doubly serious by both the fact that the state faces a $5 billion budget deficit this year and that the state budget is already busting records at $100 billion. So requests for more transit funding are not going to be met with much enthusiasm in Albany.

The MTA Debt Bomb is Exploding

According to fiscal experts, Governor Pataki helped create the MTA’s budget woes by directing it to borrow tens of billions of dollars by issuing bonds (a form of debt) backed by rider fares. Historically, the MTA backed its bonds, which pay for capital improvements like new cars, new track and new signals, with toll revenue and state taxes. Rider fares paid for ongoing subway and bus service. This system ensured that, as ridership grew and fare revenue with it, the agency could increase service. It also meant that state taxes would help subsidize transit. Now however, the MTA must use more and more of rider fares to pay interest on the bonds, leaving less money for day to day service. Experts fear that the MTA now faces a choice among providing good service, keeping the existing subway and buses in a good state of repair or adding to the system by building new lines like the Second Avenue subway. And the budget situation could be much worse if interest rates go up. The MTA and transit riders have been very lucky that interest rates have been at historic lows.

City Subway and Bus Riders Get Shafted

Aggravating the woes of New York City subway and bus riders is the historically inequitable distribution of state transit aid. New York City MTA buses and subways move 84% of the state’s transit riders but get only 63% of aid. In contrast, Long Island Rail Road and MetroNorth move 5% of the state’s riders, but get 23% of state transit aid. Additionally, New York City transit riders pay nearly 60% of the cost of running the subway and bus system, whereas riders on the Long Island Rail Road pay only 44% and those on MetroNorth 54%; the national average is about 40%.
Transit advocates have suggested a number of new funding sources for city subways and buses. Foremost is the reinstitution of the commuter tax, which, this time, the MTA would dedicate solely to transit funding. Another option is imposing tolls on the City’s East River bridges or, better yet, congestion pricing in Midtown Manhattan. Unless the state legislature takes bold action, New York City transit riders should
prepare themselves for less frequent service, dirtier subways and
buses, more breakdowns and higher fares.

Elected and City officials and community groups are optimistic about the creation of Bus Rapid Transit.
DOT/MTA and East Side Pols See Promise of NYC Bus Rapid Transit

Interest in the fast bus service known as Bus Rapid Transit (BRT) continues to grow in New York City. Elected officials from Manhattan’s East side, transit advocates, top MTA bus officials, Assemblyman Peter Grannis and Councilmember Phil Reed gathered to talk about BRT at a January 16th meeting co-hosted by Commissioner Iris Weinshall and NY State Senator Liz Krueger at the New York City Department of Transportation. The specific focus of the meeting was speeding up service on the M15 bus, which travels on First and Second Avenues. City Department of Transportation and MTA officials told the gathering that the agencies would soon seek a consultant to help them identify and help design at least five good New York City routes for BRT service. The new service would likely feature bus lanes, bus mounted lane enforcement cameras and equipment that adjusts signal timing to speed buses.

New York City transit riders should prepare themselves for less frequent service, dirtier subways and buses, more breakdowns and higher fares

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