Budgeting By Credit Card: How The NY MTA Got Into Debt And Why It Must Get Out
Thursday, August 25, 2011 - 02:12 PM
(Colby Hamilton -- New York, NY - The Empire) Jay Walder’s resignation as head of the NY Metropolitan Transportation Authority last month caught city and state officials totally by surprise. The man that had guided the transit agency through the fiscal crisis fallout by implementing harsh but largely unavoidable cutbacks—fare hikes, and budget gouging—was leaving. He’s taking a gig in Hong Kong that pays three times as much, running a system that is posting sizable profits.
A few days later, Walder and the rest of the MTA board dropped the latest budget numbers on riders. The agency’s five-year capital program—the money pool that pays for big projects like the 2nd Avenue subway line and the 7 train extension, as well as overall maintenance—was underfunded by $9 billion for the final three years. The agency is adding a fare hike in 2015, on top of the scheduled fare increase next year. It also wants to borrow $6.9 billion to help cover these costs.
This is a sorry song that New York straphangers have been listening to for years now. The public response was less of an outrage than an exhausted sigh. Given the perennial state of crises the MTA finds itself in, and the continued financial burdens being passed along to riders, it’s worth remembering the immortal words of David Byrne: “You may ask yourself, ‘Well, how did I get here?’”
How DID we get here?
There are many factors that have led to the abysmal fiscal situation of the MTA. Tax receipts vanishing in the wake of the 2008 financial crisis didn’t help. Neither does Albany legislators’ stealing funds from the agency to pay for other things. The agency’s debt obligations alone take 20 cents from every dollar it pulls in.
Likewise, many people could—and should—be held responsible, from elected officials to appointed board members, unions to business leaders. But out of this pool of transit tragedy one person bears a disproportionate responsibility for the current mess the nation’s largest public transit system is in.
That person is former Governor George Pataki.
Understanding how the Pataki administration is culpable for today’s problems requires heading back to the beginning of 1980. To be fair to the Pataki people, the former governor was in many ways just following the trail blazed by his predecessors. For the 20 years prior, the MTA had borrowed to finance its upkeep and improvement, a decision that saved the system. But what started as a fiscal pill to quiet the immediate pain of a system nearing collapse turned into a budget addiction that has torn the agency apart.
For more, go to this story on WNYC's Empire blog and continue reading after subhead, "An Initial Rescue."