The best news in the joint, ten-point plan to fix New York’s transit agencies from Mayor Bill de Blasio and Governor Andrew Cuomo is that de Blasio has finally endorsed congestion pricing. This policy of charging drivers for the privilege of driving in Manhattan below 61st Street will serve three important goals: generating revenue to support transit, reducing traffic congestion, and encouraging more transit ridership.
I’m enthusiastic about this. Unfortunately, the mayor is not.
“I still believe a Millionaires Tax is the best, most sustainable revenue source for the transit improvements our city needs,” he said in a statement. “But the time to act is running out, and among all alternatives, congestion pricing has the greatest prospects for immediate success.”
This reluctant statement shows the mayor still doesn’t really get the issue: A tax on high incomes isn’t a substitute for congestion pricing because it serves only the revenue goal of congestion pricing. Plus, the Metropolitan Transportation Authority is already reliant on revenue sources that swing heavily with economic cycles, such as taxes on mortgage originations, real-estate transfers, and corporate income. These boom-and-bust revenue sources tend to force subway and bus service cuts when the economy falters, as we learned the hard way in the last recession. A key factor that makes congestion pricing a sustainable revenue source is that traffic volumes do not swing with the economy as much as high earners’ incomes do.
The mayor has insisted on some “hardship” exemptions to the congestion fee, which hopefully will not be so extensive as to gravely undermine its effectiveness.* But even with this caveat and even with palpable reluctance, de Blasio’s support for a congestion charge is good news that makes it much more likely to become law.
The rest of the ten-point package, I am not sure what to make of. Some of the points don’t seem that important: A 2 percent annual cap on fare increases is roughly in line with the fare increases the MTA has already been imposing in recent years without an explicit cap. Others depend on details that aren’t laid out in the announcement, like what “station design modifications” would be used to prevent fare evasion.
Besides congestion pricing, the most important plank of the plan would centralize many MTA functions. Currently, the MTA operates as a “holding company” over essentially separate entities like NYC Transit, Long Island Rail Road, and Metro-North Railroad. This separated structure leads to excessive costs because the different entities have duplicate functions, and because they fail to play nicely together and share existing infrastructure. The inability of LIRR and MNR to share, in particular, has led to billions of dollars in excess construction at Grand Central Terminal.
So, greater centralization among the MTA’s constituent agencies might eliminate some duplicate costs and lead to better coordination on matters like scheduling, fares, procurement, and facilities. That would be good.
On the other hand, as Stephen Smith points out, the MTA’s most centralized aspect — MTA Capital Construction, a centralized agency serving the various operating agencies — is probably its most dysfunctional, routinely spending multiples of what it should on major construction projects.
And greater centralization could make it harder to fix two big problems with the MTA’s existing structure. One is a lack of accountability: Most voters don’t know who’s in charge, and the governor, who is in charge, likes to pretend he’s not in charge. The other is that the MTA’s status as a state agency takes issues that are fundamentally the business of New York City and makes them subject to the whims of faraway legislators. At a budget hearing earlier this month that addressed the congestion fee issue, a state senator from Oneonta (which is between Binghamton and Albany) asked if there would be an exemption to the Manhattan congestion fee for farmers who need to bring their produce to farmer’s markets. De Blasio for some reason called that a “good example” of who should be exempt.**
Centralization entrenches these two problems because it makes it more difficult to address them by returning control of New York City’s subways and buses to the city. If we did that, everyone would know who to blame when the subway doesn’t work — the mayor — and the system could be governed with an eye solely to the city’s interests. Unlike in the 1970s, we have a sufficient fiscal base to handle the subway ourselves; most of the taxes collected to finance it come from here anyway, even under state management. But if you further integrate subway and bus operations with those of the commuter railroads, a future divorce will only become harder.
Ultimately, I think Yonah Freemark is right that more centralization is not necessarily a good idea or a bad one. Instead, the MTA needs clarity about who is in charge, a customer focus, and a willingness to adopt international best practices. Those goals could be achieved — or not — under either style of org chart.
In fact, I want to do something unusual and praise the MTA for having gotten somewhat better on these three matters — accountability, customer focus, and best practices — over the last 18 months.
While the MTA’s capital construction program has long been a cost-bloated disaster, its reputation for operational deficiency is only a few years old. And there are signs that Andy Byford, the relatively new head of NYC Transit, is having some success in getting his agency to operate better. His program to speed up subway service by fixing faulty speed traps and reevaluating speed limits seems to be having its desired effect of reducing delays. The MTA is also about to make a long-overdue move to a new contact-less payment system, which will make it possible to significantly speed bus boarding, again making service faster.
Byford has put himself out, publicly, as the accountable figure for service quality at NYC Transit. He has pushed the agency to adopt foreign best practices in the interest of improving customer service.
Even Andrew Cuomo’s ham-fisted interventions, like his last-minute cancellation of the yearlong Canarsie Tube closure, have the perhaps unintended consequence of reminding the public that he is ultimately in charge of the MTA. If he meddles enough, he’ll have no choice but to bear political responsibility for what the agency does, which gives him more reason to focus on making it work well. This is accountability of a sort.
The MTA needs more money, which it will get if a congestion fee is imposed, but it also needs continued operational improvements that ensure the money is spent in a way that benefits customers. Byford has presented a model of how those improvements can be implemented at one agency. What will determine if this turnaround plan can work for the whole MTA is whether that accountable attitude can be sustained and extended beyond the issue of reducing subway delays.
* The mayor seems especially fixated on people who have to travel to Manhattan for medical appointments. The thing is, it can cost money to go places, even doctor’s offices. A lot of people take the subway to the doctor, and that doesn’t mean they get to ride for free. But, whatever. People driving to medical appointments do not make up a large fraction of Manhattan traffic, and if this is what it takes to get the political support necessary to relieve congestion and fund the subways, fine.
** Not to beat a dead horse, but this further demonstrates how the mayor does not understand what congestion pricing is for. The point is not to punish people for driving into the city for bad reasons. It is to charge people for the costs they impose by increasing traffic congestion. Farmers’ trucks, like all other vehicles, increase traffic congestion. If those farmers have good reasons to come here — and it seems to me they do — they can pay the congestion fee and build it into the price of the produce they sell. That’s what the supermarkets trucking food into the city will do, as will the wholesalers making deliveries to restaurants. Ultimately, New York consumers will bear the cost of congestion fees paid by businesses; that’s okay, because those consumers also benefit from the transit services financed by the fees.