https://www.newsday.com/opinion/commentary/guest-essays/mta-metropolitan-transportation-authority-lirr-yte5q4zn
Concerns about insufficient revenues to support the Metropolitan Transportation Authority are widespread, but the MTA doesn’t have a revenue problem. It has a spending problem.
State leaders have employed numerous gimmicks, including unprecedented borrowings and huge fare and tax hikes. The latest money grab is the paused congestion pricing proposal which will likely be reintroduced after November’s election.
The only way to prevent the ultimate collapse of MTA finances is to impose a state-authorized financial control board with authority to restructure contracts, onerous work rules, and wasteful overtime policies that led to a budget gap of $2.5 billion in 2025 and 2026 and a tripling of subway service delays between 2012 and 2017.
Remember: This is the MTA that gave us engineers and conductors earning $283,000, and $10,000 per month pensions. More than 1,100 employees doubled their salaries in 2023 as the agency’s overtime bill skyrocketed to nearly $1.3 billion. One year, one MTA employee earned $344,000 in overtime alone.
Such inefficiencies led to a cost of $2.5 billion per mile to construct the Second Avenue Subway, eight to 12 times more expensive than similar subway projects in Italy, Sweden, Paris, and Spain.
The MTA also is not collecting money it is owed: The agency lost an estimated $690 million in unpaid fares and tolls in 2022.
Control boards have been implemented numerous times throughout the nation to stabilize governments on the verge of fiscal collapse. Instituting a control board is similar to declaring bankruptcy in that control over financial affairs is given to a third party. Most trimming measures available through bankruptcy are available to the control boards, such as eliminating cost-of-living adjustments in labor contracts and shaving health care and overtime benefits.
While New York State law prevents the MTA from filing bankruptcy, the state can impose a financial control board.
In the 1970s, the state and federal governments imposed on New York City a financial control board which wielded authority to approve or reject the city’s budget and borrowings, ultimately restoring fiscal discipline and rebuilding investor confidence.
Long Islanders are familiar with Nassau County’s control board, but may not know that in 2003, Buffalo faced a severe fiscal crisis compounded by an expensive new labor contract. That led to a state-created control board with authority to disapprove budget proposals, borrowing plans, and labor contracts and that reviewed every expense over $50,000, which helped the city recover.
In states that allow bankruptcies, measures similar to those employed by control boards helped other municipalities through tough times. Examples include Jefferson County, Alabama, which filed in 2011 for the largest municipal bankruptcy in U.S. history; San Bernardino, California, which entered bankruptcy in 2012; and Detroit, which declared bankruptcy in 2013 and ultimately shed $7 billion in debt, restructured $7.8 billion in retirement costs, relieved the city of $4.3 billion in unfunded health care obligations, and reduced cost-of-living adjustments.
To achieve similar results, state leaders should place the MTA under a financial control board that would allow for the restructuring of the MTA’s contracts and costly spending practices.
The structural imbalance within the MTA is so far gone that promoting congestion pricing is like placing a Band-Aid on a cancer sore. Restructuring through a financial control board is the only logical solution.
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October 16, 2024https://www.newsday.com/opinion/commentary/guest-essays/mta-metropolitan-transportation-authority-lirr-yte5q4zn
Concerns about insufficient revenues to support the Metropolitan Transportation Authority are widespread, but the MTA doesn’t have a revenue problem. It has a spending problem.
State leaders have employed numerous gimmicks, including unprecedented borrowings and huge fare and tax hikes. The latest money grab is the paused congestion pricing proposal which will likely be reintroduced after November’s election.
The only way to prevent the ultimate collapse of MTA finances is to impose a state-authorized financial control board with authority to restructure contracts, onerous work rules, and wasteful overtime policies that led to a budget gap of $2.5 billion in 2025 and 2026 and a tripling of subway service delays between 2012 and 2017.
Remember: This is the MTA that gave us engineers and conductors earning $283,000, and $10,000 per month pensions. More than 1,100 employees doubled their salaries in 2023 as the agency’s overtime bill skyrocketed to nearly $1.3 billion. One year, one MTA employee earned $344,000 in overtime alone.
Such inefficiencies led to a cost of $2.5 billion per mile to construct the Second Avenue Subway, eight to 12 times more expensive than similar subway projects in Italy, Sweden, Paris, and Spain.
The MTA also is not collecting money it is owed: The agency lost an estimated $690 million in unpaid fares and tolls in 2022.
Control boards have been implemented numerous times throughout the nation to stabilize governments on the verge of fiscal collapse. Instituting a control board is similar to declaring bankruptcy in that control over financial affairs is given to a third party. Most trimming measures available through bankruptcy are available to the control boards, such as eliminating cost-of-living adjustments in labor contracts and shaving health care and overtime benefits.
While New York State law prevents the MTA from filing bankruptcy, the state can impose a financial control board.
In the 1970s, the state and federal governments imposed on New York City a financial control board which wielded authority to approve or reject the city’s budget and borrowings, ultimately restoring fiscal discipline and rebuilding investor confidence.
Long Islanders are familiar with Nassau County’s control board, but may not know that in 2003, Buffalo faced a severe fiscal crisis compounded by an expensive new labor contract. That led to a state-created control board with authority to disapprove budget proposals, borrowing plans, and labor contracts and that reviewed every expense over $50,000, which helped the city recover.
In states that allow bankruptcies, measures similar to those employed by control boards helped other municipalities through tough times. Examples include Jefferson County, Alabama, which filed in 2011 for the largest municipal bankruptcy in U.S. history; San Bernardino, California, which entered bankruptcy in 2012; and Detroit, which declared bankruptcy in 2013 and ultimately shed $7 billion in debt, restructured $7.8 billion in retirement costs, relieved the city of $4.3 billion in unfunded health care obligations, and reduced cost-of-living adjustments.
To achieve similar results, state leaders should place the MTA under a financial control board that would allow for the restructuring of the MTA’s contracts and costly spending practices.
The structural imbalance within the MTA is so far gone that promoting congestion pricing is like placing a Band-Aid on a cancer sore. Restructuring through a financial control board is the only logical solution.
Steve Levy
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