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New York Post

 

MTA Baby Steps

July 31, 2007

By Nicole Gelinas

Fare Hike, Yes With Fixes At The Top

LEE Sander, chief of the Metropolitan Transportation Authority, took some spirited criticism from his never-shy constituents - subway riders - last week at Grand Central, where he tried to gather support for a fare hike next year. But riders might temper their words for now, despite their justified skepticism of everything the state-controlled public authority says or does. The proposed fare increase may be a small step in the right direction.

The Spitzer-era MTA inherited a mess from former Gov. George Pataki - though that mess remains mostly invisible. To keep the MTA in OK shape while avoiding up-front costs, Pataki's people refinanced billions in authority debt and made sure that most of the bills wouldn't come in until after he left.

The result: MTA spending on debt will nearly double in the next three years, to about $2 billion a year - or about half of expected fare revenues by then. That's more than 20 percent of all of the money the MTA gets each year from tunnel and bridge tolls, fares and taxes.

And that's why it's smart of Sander to propose that the MTA use much of this year's continued temporary cash windfall to pre-pay some debt costs, as well as pension and health-care benefit costs for workers, that would otherwise come due in future years.

The source of that windfall is mainly the funds the MTA gets from real-estate-related taxes downstate. Those receipts have tripled over the last five years amid a real-estate boom, to about $1.5 billion this year. It makes good sense to use this bonus money - a revenue geyser that's likely to peter out - to ease tomorrow's inevitable bills.

Some MTA critics would rather that the agency use the cash to avoid a proposed 6.5 percent fare hike - but that's misguided. The increase isn't even enough to match inflation since the last broad fare hike.

Of course, one reason the MTA has never really budgeted rationally is that its political stewards are always terrified to raise fares regularly and reasonably as normal operating costs go up. That could change: Even more boldly, the MTA last week proposed to end once and for all the ridiculous regular political and public wrangling over raising fares, by indexing future hikes to cost-of-living inflation every two years.

But the MTA may be making a big mistake by expecting to reap $600 million a year more, starting in two years, in "new government revenue" (likely congestion-pricing proceeds). Sure, the MTA wants to pressure the Legislature and City Council into approving this fee - but if they don't go along, the authority will be in a tough position in a couple of years. It will have to either drastically cut capital spending - because congestion-pricing money is supposed to go toward new construction and upgrades of existing infrastructure - or explain to the public why its fare hike, and its indexing of the fares to inflation, wasn't enough.

In fact, the public should expect this small step toward rational fare-setting to be accompanied by more rational management - and better service.

First, the MTA still must modernize its pensions and health benefits so workers share the burden, as they do in the private sector. The MTA's health-care costs, for one, are up nearly 40 percent in the past 2½ years. And it's not a good sign that the agency expects labor to make only a "modest contribution" of $82 million a year in cost-savings - little more than 1 percent of expected labor costs - starting in 2010.

Second, the MTA should learn, through better management, that the answer to labor woes isn't to cut workers where they're actually needed. It's obvious, for example, that New Yorkers don't like waiting on isolated platforms where there's no MTA clerk, or getting stuck in lines because tourists are confused by the turnstiles and there's nobody there to tell them how to go through. Private-sector firms manage to keep labor costs in check while maintaining reasonable customer service; the MTA should do the same.

Third, the MTA should think about new ways to achieve efficiency.

At last week's board meeting, board member Norman Seabrook suggested inviting a private-sector firm to pay for floor-to-ceiling advertising at a high-profile station like Times Square. But that wouldn't change how the MTA operates; it already lets single advertisers blanket whole subway cars.

What would change things would be if the MTA were to put out requests for bids to private-sector infrastructure firms to take responsibility to rehab a few high-profile stations. The firms could then operate and maintain those stations under a 30- year contract, using their own, more flexible, management and labor practices to do the work, receiving bonuses for fast renovations and for exceptional maintenance and service (and penalties for the opposite, of course).

International firms accustomed to taking responsibility for performance on public-sector infrastructure projects in places like London and Amsterdam want to do more such business in America. What better way for them to show the public what they can do - or can't do well, if that turns out to be the case - than to ask them to try it in one of the highest-profile spots in the world?

Original Source: http://www.nypost.com/seven/07312007/postopinion/opedcolumnists/mta_baby_steps_opedcolumnists_nicole_gelinas.htm

 

 
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