TWO BIRDS WITH ONE TOKEN (via Tom Morin):

How to Save the Subways—Before It’s Too Late (Nicole Gelinas, City Journal)

As New Yorkers learned in January, when a fire in a signal-relay room knocked out service for the half-million people who ride the A and C trains daily, Gotham’s subways are in deep trouble. Bad enough that the inferno showed that any bum (or terrorist) with a lighter could paralyze New York; worse still was New York City Transit chief Larry Reuter’s announcement that this critical lifeline for Brooklyn and Queens residents would be out for three to five years. When transit officials responded to riders’ outrage by getting most service up and running within two weeks, public relief mingled with anxiety that transit brass didn’t understand how their system worked or that they were responsible for keeping it going, no matter what.

Perhaps most troubling of all was the revelation that this essential element of the region’s economy depends on fragile technology that predates the Great Depression. And further, though all this equipment desperately needs updating, the Metropolitan Transportation Authority (MTA), the state agency that runs New York City Transit and the region’s commuter trains, doesn’t have the money to replace it or even maintain it properly, and will have even less wherewithal for vital infrastructure investments over the coming decade. The MTA faces bills now coming due for decades’ worth of poor operational and financial management—for which not just the bloated and clueless MTA but also Governor Pataki’s political leadership are ultimately to blame.

Below all these ills lies a still more fundamental problem, also the fruit of politics. State and local pols ensure that the price of a subway ride falls far short of the actual cost, but refuse to make up the difference with reliable subsidies. Meanwhile, the political clout of the Transport Workers Union (TWU) ensures that that cost is outrageous, thanks to lavish labor contracts and pension benefits. So the MTA, squeezed from both the cost and the revenue sides, runs chronic operating deficits that are about to become unsustainable.

Here’s why the numbers will never add up. The MTA will rake in $3.5 billion in mass-transit fares this year, plus $1.1 billion from its bridge-and-tunnel tolls. That $4.6 billion covers less than half the agency’s $9.4 billion in expenses. Correspondingly, the $2.8 billion in fares that 1.4 billion subway riders will pay this year is barely half of what it costs to run the trains. So dedicated taxes must provide a $2 billion dump into the MTA’s coffers each year. State and city subsidies add another $600 million, along with the bridge-and-tunnel profits. And it’s still not enough.

Just hike the tolls generally and charge a congestion fee during business hours.

Posted by Orrin Judd at May 20, 2005 5:09 PM