Subway City #2: Civics and Threats of a Public Good
My faith in government is strengthened by public officials who follow the creed of handling the public’s money like a sacred trust. My faith fades rapidly when they act without a strategy to long-term fiscal health. MTA seems to be a government agency run by those with a bad habit of borrowing money—the kind of borrowing that leads to more borrowing.
Currently, 12 percent of MTA’s annual budget is for interest payments on carry-over debts from previous years. By 2008, interest payments are projected at 21 percent. Planned capital investments for 2005-2009 will cost $27.8 billion, including $10 billion for new projects. Outside of a $5 billion federal subsidy, no revenue sources yet are identified for these investments.
To me, this feels like a looming threat to this nation’s most intrinsically efficient metropolitan transportation system. Fewer new subway cars and station-upgrade projects would be bad enough. But the system’s problems are deeper. It operates on equipment that is obsolete, unreliable, and hazardous. Furthermore, the system remains frightfully vulnerable to terrorist attack. It is vital that the New York subway system be “brought up to code” and become fiscally solvent.
The obvious approach to slashing operating costs would be to turn operations over to a private contractor. MTA chairman Peter Kalikow should openly discuss this idea at the public forum. The experience of other cities that adopted this approach, such as London and Copenhagen, suggests remarkable savings can be achieved.
In addition, MTA revenue must increase. Raising fares would be the obvious revenue enhancer. But the subway system, like most public transit systems, has built-in limits to fare rate hikes. This is primarily because an individual’s choice to take public transit often comes after weighing clear, obvious advantages over taking a private car. Substantially hiking up fares tends to diminish the consumer’s assessment of public transit. At worse, high fares could mean fewer riders and more cars in the traffic lanes, a result contrary to public transit’s mission.
Effective systems of public transit like New York’s subway system are public goods because they increase possibilities for public association in the urban landscape. Maintaining lower fares does not mean that affordable public transit is a civil right—there’s no such thing as an inherently endowed right to a cheap ride downtown. Rather, it is a policy goal that conforms well to the wider purpose of a free society which thrives upon human exchanges which drive the forces of creativity and entrepreneurship.
MTA should look to other sources for new revenue by identifying other beneficiaries of the subway system. For example, retailers and food establishments are beneficiaries because the subway delivers much of their customer base. However, these types of businesses already pay their share into the system by collecting state and local sales taxes on all the prepared food and goods they sell.
Employers who are not retailers—businesses that rely on commuting office and industrial workers—are a different story. In several ways public transit is sized and operated chiefly according to their needs. Most working people commute during morning and afternoon peak hours so that businesses can schedule their operations during the same busy timeframe. In this way, rush hour is a good thing from the perspective of business. Operating during the same daily hours as other businesses is essential for efficient commerce.
New York’s subway system has remarkable flexibility to increase and decrease service to efficiently correspond to busy and slow periods of usage. It is a transit system designed to the task of moving rush hour traffic quickly. But the subway’s value to Manhattan’s businesses goes far beyond moving workers back and forth when it counts the most.
In most cities, new floor area for growing businesses happens only by also turning over additional real estate for parking. Sometimes the developer might pay a parking mitigation fee to a public agency to furnish public parking. Subsequently, public parking might happen only by eminent domain condemnation of a neighboring landowner’s property. This Darwinistic development cycle is one way that cities outside New York struggle with the overabundance of parked cars.
In Manhattan, on the other hand, subway riding employees don’t need parking facilities upon arrival. Manhattan real estate remains available for development rather than for vehicle storage. The vertical heights of Manhattan were built upon the network of subway lines in more ways than one. Business development reached skyward because workers left their cars at home. A scale of urban density was achieved to allow a level of public association and business activity that befits New York’s global stature.
MTA has a deplorable habit of borrowing to meet expenses. New York’s array of global, national, and local businesses relies on MTA’s ailing subway system. It is time for MTA to turn to this thriving business community for a serious discussion about how both can better meet their civic responsibilities.
Currently, 12 percent of MTA’s annual budget is for interest payments on carry-over debts from previous years. By 2008, interest payments are projected at 21 percent. Planned capital investments for 2005-2009 will cost $27.8 billion, including $10 billion for new projects. Outside of a $5 billion federal subsidy, no revenue sources yet are identified for these investments.
To me, this feels like a looming threat to this nation’s most intrinsically efficient metropolitan transportation system. Fewer new subway cars and station-upgrade projects would be bad enough. But the system’s problems are deeper. It operates on equipment that is obsolete, unreliable, and hazardous. Furthermore, the system remains frightfully vulnerable to terrorist attack. It is vital that the New York subway system be “brought up to code” and become fiscally solvent.
The obvious approach to slashing operating costs would be to turn operations over to a private contractor. MTA chairman Peter Kalikow should openly discuss this idea at the public forum. The experience of other cities that adopted this approach, such as London and Copenhagen, suggests remarkable savings can be achieved.
In addition, MTA revenue must increase. Raising fares would be the obvious revenue enhancer. But the subway system, like most public transit systems, has built-in limits to fare rate hikes. This is primarily because an individual’s choice to take public transit often comes after weighing clear, obvious advantages over taking a private car. Substantially hiking up fares tends to diminish the consumer’s assessment of public transit. At worse, high fares could mean fewer riders and more cars in the traffic lanes, a result contrary to public transit’s mission.
Effective systems of public transit like New York’s subway system are public goods because they increase possibilities for public association in the urban landscape. Maintaining lower fares does not mean that affordable public transit is a civil right—there’s no such thing as an inherently endowed right to a cheap ride downtown. Rather, it is a policy goal that conforms well to the wider purpose of a free society which thrives upon human exchanges which drive the forces of creativity and entrepreneurship.
MTA should look to other sources for new revenue by identifying other beneficiaries of the subway system. For example, retailers and food establishments are beneficiaries because the subway delivers much of their customer base. However, these types of businesses already pay their share into the system by collecting state and local sales taxes on all the prepared food and goods they sell.
Employers who are not retailers—businesses that rely on commuting office and industrial workers—are a different story. In several ways public transit is sized and operated chiefly according to their needs. Most working people commute during morning and afternoon peak hours so that businesses can schedule their operations during the same busy timeframe. In this way, rush hour is a good thing from the perspective of business. Operating during the same daily hours as other businesses is essential for efficient commerce.
New York’s subway system has remarkable flexibility to increase and decrease service to efficiently correspond to busy and slow periods of usage. It is a transit system designed to the task of moving rush hour traffic quickly. But the subway’s value to Manhattan’s businesses goes far beyond moving workers back and forth when it counts the most.
In most cities, new floor area for growing businesses happens only by also turning over additional real estate for parking. Sometimes the developer might pay a parking mitigation fee to a public agency to furnish public parking. Subsequently, public parking might happen only by eminent domain condemnation of a neighboring landowner’s property. This Darwinistic development cycle is one way that cities outside New York struggle with the overabundance of parked cars.
In Manhattan, on the other hand, subway riding employees don’t need parking facilities upon arrival. Manhattan real estate remains available for development rather than for vehicle storage. The vertical heights of Manhattan were built upon the network of subway lines in more ways than one. Business development reached skyward because workers left their cars at home. A scale of urban density was achieved to allow a level of public association and business activity that befits New York’s global stature.
MTA has a deplorable habit of borrowing to meet expenses. New York’s array of global, national, and local businesses relies on MTA’s ailing subway system. It is time for MTA to turn to this thriving business community for a serious discussion about how both can better meet their civic responsibilities.
posted by Paul Cogley at 11:44 AM
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