Of course, given an operating deficit of $994 million projected for 2008, efficiency gains alone won’t balance the books. But to persuade riders or Albany politicians to fork over more cash, the MTA must first convince them that it won’t blow the funds.

It would also help if the agency made itself more transparent and accountable, which would entail a significant change in its culture. In 2002, for example, the Authority shifted $513 million from its budget for that year to its 2003 budget. The move wasn’t illegal, but it was sneaky: It effectively shrunk the MTA’s 2002 operating surplus—yes, there was one then, before the debt service skyrocketed—to almost nothing and thereby bolstered the Authority’s pleas for a fare increase. Predictably, when Hevesi found out, he issued a report blasting the existence of “Two Financial Plans: One Public, One Secret.” Another furor erupted in January, when Lapp admitted to Assemblyman Richard Brodsky, the chairman of the Committee on Corporations, Authorities, and Commissions, that the MTA had received an appraisal for the West Side rail yards, which the Authority wants to sell to the Jets, but had not and would not share the numbers with state legislators. Brodsky had to subpoena the document to get a look at it. “Peter and Katie have been better than what came before,” Brodsky says of Kalikow and Lapp. “Where they fail, they fail because they become secretive.”

Cut the bloat, end the secrecy, open the books. Only when the MTA puts its own house in order will its pleas for help register as more than crying wolf.

Get buses in new private hands. Remember those Caribbean van drivers the MTA worked so hard to put out of business in the mid-nineties? The agency should tell them to get together and form a bus company. Transit systems have all kinds of unique operations that should not be fobbed off on the private sector; we don’t need a Halliburton subsidiary switching subway signals. But bus service certainly is one area ripe for some free-market competition.

The MTA is currently in the midst of taking over the city’s buses from City Hall and buying out the seven private companies that run the lines. There are solid reasons for this switch. The private firms haven’t operated efficiently, largely because they didn’t compete for their city contracts—they just inherited old deals, and have kept lining up year after year for subsidies. And the takeover will allow the MTA to upgrade vehicles and coordinate service throughout the entire system.

But once the MTA has control of all the lines, it should put them up for bid. Nothing ever changes easily when the Transit Workers Union is involved. But other cities have realized huge savings through competition—once companies realize they can lose a franchise, they find ways to cut costs without reducing services (like paying workers less generous benefits packages). In Denver, for example, routes bid out by the city cost 46 percent less than municipal-run lines, according to a 2002 report by the Manhattan Institute. San Diego reduced its transit costs by 33 percent after contracting out 44 percent of its bus lines. “Different cities do it different ways, but the idea is that even though private companies would lose money if they had to pay for entire bus systems themselves, they can still competitively bid for the right to operate the lines,” says E. J. McMahon, co-author of the study. “That way, you don’t end up just having one big monopoly [the MTA] dealing with another [the union]. There aren’t that many ways to save on operating costs. This is one.”

Hold a giant yard sale. The MTA needs to consolidate, sell, develop, and license properties from its vast archipelago of holdings, wherever possible. For example, the authority had wanted to move employees from a handful of buildings it owns to 2 Broadway. But after renovating 2 Broadway turned into a disaster—more than $300 million in cost overruns, a series of criminal indictments against MTA contractors—the Authority shelved those plans. It should put them back on the drawing board and sell its Madison Avenue buildings; the capital plan needs the cash more than the MTA needs offices adjoining Grand Central Terminal. “I’ve got people coming to me every day,” Kalikow says about developers who want chunks of MTA property. To their credit, he and Lapp are in the process of finding a company to evaluate the MTA’s holdings and figure out which aren’t necessary for the Authority’s operations. “There’s probably a degree of excess value,” he says. “We’re going to try to determine that.”

The MTA has also hired two marketing companies to sell sponsorship rights to its properties, another good idea, if it’s executed with a modicum of taste. “You don’t want to rename Times Square after the Delta Shuttle,” says Neysa Pranger, who heads NYPIRG’s Straphangers Campaign. “But advertising already accounts for almost five percent of MTA revenues. That’s money riders won’t have to pay.”

But when it comes to the most valuable real estate the MTA has for sale—the West Side rail yards—the agency is in a tough bind. Mayor Michael Bloomberg and the governor both want the MTA to hand over its property to the Jets at a huge discount.

At one point, the MTA sought to have the West Side rail yards condemned, which would have led a judge to assign a value to the property and made it easier for the Authority to get a fair price for it. That might have been a smart move. But “it came back to me through the governor’s staff that [condemnation] was not an appropriate way to deal with this issue,” according to Kalikow, so that plan died.

Now, Cablevision, which has invested millions in its fight against the stadium, has stepped in with a competing offer and a plan to build housing and offices. The MTA, in turn, has promised to open the process to all comers, if there’s anyone else out there brave enough to bid against the mayor’s dream.

Even with this latest roadblock, Pataki and Bloomberg seem set on the stadium, and will make it difficult for anyone else to proceed. So what should Kalikow do? If Ravitch or Kiley had ever found themselves in this situation, they would have caused a major media ruckus, possibly involving a resignation threat or two. But while Kalikow has made noises that suggest he’s had almost enough, so far he has remained loyal to Pataki. He should insist that the Jets pay more for the property or lose it. A Manhattan stadium would be a bonanza for the team, so let’s see how much they’re willing to share with subway riders. Among other things, playing hardball for a fair price would set a fine precedent for when the MTA restarts negotiations with Bruce Ratner for the rights to build his basketball arena at the Atlantic Yards in Brooklyn.