The way the system is run today, though much derided, is better than most other models.
Next year, at least one leading mayoral candidate is likely to argue that the City should control subway and bus services without the meddling of Albany politicians. Before the last election, both Andrew Yang and Corey Johnson advocated for municipal control, recognizing how essential the subways and buses are for city residents.
If New York City managed to wrest control of the subways from the Metropolitan Transportation Authority — a bureaucracy governed by a 23-member board that defers to the governor — the trains would operate much more efficiently. Stations would be cleaner, trains quieter and fares lower, and every single station would have elevators. And far less money would be wasted.
So the argument goes. But it’s wrong.
Changing how the subways and the MTA are governed will not solve our transit problems. In fact, they are likely to make conditions even worse. Every generation has its politicians and pundits who think that governance reforms will lead to meaningful and fundamental improvements. The unfortunate reality is New York City’s subways have been perpetually and woefully underfunded for more than a century, and unless and until new sources of funding are found, the problems are not going away, no matter who is in charge.
First, a little history to understand how we have gotten to where we are.
Across the U.S., many metropolitan areas have followed a similar path. In the early 20th century, after the widespread use of automobiles made operating transit unprofitable, cities took control of private sector bus and rail companies. In some cities, mayors were given control, while in others, public authorities were established.
The next major shift occurred in the 1960s. As more workers moved to the suburbs and relied on commuter railroads to get to work, regional transportation authorities were formed, and they typically swallowed up the intracity transit networks.
New York followed this path. As far back as 1917, when private companies ran the subways, city residents were frustrated by train services and crowded cars. The newly elected mayor — John Francis Hylan — promoted public ownership, promising that a City-owned subway system would earn a profit that could be used to fund new schools, parks and highways. The private companies, who were forced to keep the fare at five cents, eventually went bankrupt, and a City agency, reporting to the mayor, took them over in 1940.
Alas, even though the City raised fares, it could not overcome the same financial pressures faced by the private firms. In the 1950s, state legislators became increasingly concerned about both the subway’s physical deterioration and its financial problems. They lost faith in the City’s ability to operate and modernize the subways.
So, legislators established the New York City Transit Authority, which would be governed by a board of quasi-independent, publicly appointed directors. The board, composed of corporate and civic leaders, was expected to operate the subways like a business, leading to better and more efficient services. However, the Transit Authority was put in an impossible situation: Its revenues could not cover the system’s operating costs, let alone pay for necessary upgrades to stations, tracks and signals. In fact, the Transit Authority still ran hundreds of subway cars purchased between 1904 and 1905.
To fix and modernize the region’s beleaguered transit system, the state created the MTA in the 1960s. Our much-maligned regional transportation authority now controls the city’s subways and buses, as well as the nation’s two busiest railroads (Long Island Rail Road and Metro-North). Although governors formally nominate all the MTA’s board members, Kathy Hochul and her successors do not have total control of the MTA’s leaders. To ensure local input and legislative oversight, the mayor and suburban county executives recommend some members, and all the nominees need State Senate confirmation.
When it was formed, the MTA was merged with the Triborough Bridge and Tunnel Authority, which owned the Brooklyn Battery Tunnel, Whitestone Bridge and other intracity toll crossings. Tolls from these profitable bridges and tunnels were expected to provide the subsidies that the subways, buses and commuter railroads needed to thrive. But toll revenues have never been sufficient to operate and maintain the MTA’s transit agencies adequately, because their needs are so vast and their infrastructure so old.
Looking back, New Yorkers have been disappointed under four different governance structures. First with the private companies, then with the City, next with a transit authority and now with a regional authority.
The unfortunate reality is New York City’s subways have been perpetually and woefully underfunded for more than a century, and unless and until new sources of funding are found, the problems are not going away, no matter who is in charge.
Various options to reform the MTA and the city’s transit system have been proposed, but they all have their downsides. Let’s start with returning control back to the City of New York.
Option 1: Let the City control the subway system
If the MTA is broken up into several independent organizations, the City could take back control of the subways. In theory, a smaller agency would be less bureaucratic and more responsive to the city’s needs.
However, the subways would not be able to tap into all the resources that the MTA has at its disposal. Because two-thirds of the state’s population live in areas served by the MTA, the state has come to the MTA’s rescue numerous times. If the MTA were broken into smaller agencies, the individual ones would not be nearly as influential in Albany.
More to the point, if the subways could not tap into the tax revenue from wealthy suburban residents or the toll revenue generated by the city’s bridges and tunnels, they would face an immediate and insurmountable financial crisis. Note that the median household income in Westchester County is $115,000 compared to $75,000 in the city. Suburban residents, most of whom do not use transit, pay numerous taxes to support transit including payroll, parking, fuel, sales, ride-sharing and real estate transfer taxes.
Option 2: Expand the MTA
Expanding the MTA by giving it control over additional modes of transit might be anathema for those who already think of it as an overly large bureaucracy. After all, it has about 70,000 employees. But consolidating transportation agencies has benefits. Buses, trains, subways and ferry schedules can be better coordinated, and discounted fares offered to riders who use more than one agency’s services.
In the Greater London metropolitan area, the mayor controls — via Transport for London — nearly all the highway and transit services, and can therefore ensure that new development is built near transit services. If the New York metropolitan area had a similar structure, new commercial and residential developments in New Jersey, Long Island and the Hudson Valley would more likely be built near transit services and a series of bus lanes would connect communities across the region.
Many regions in the world have an integrated fare system, but not New York. Think about all the passes, apps and fares needed to navigate the short trip between Kennedy Airport and Newark Airport. There are no free transfers, discounts or regional passes between the Long Island Rail Road, New Jersey Transit, PATH train and subway.
This is an attractive possibility — but do not hold your breath that transit agencies will merge and help direct land-use decisions. Local governments will resist ceding any of their land-use powers, and merging transportation agencies together would only make sense if it includes new sources of revenue.
Option 3: Shift to the private sector
Another option, privatizing the MTA, might sound good on paper, but keep in mind that virtually every single transit operator in the U.S. needs substantial government subsidies to run its buses and trains, let alone pay for capital improvements. For example, in the U.S., passenger revenue from city bus riders typically covers less than one-quarter of the expenses incurred by transit agencies to provide those services. Private companies would need enormous subsidies to operate and maintain buses and trains, and they would try to shed their most unprofitable routes, even if they are essential.
Option 4: Give the governor clearer control
The fight over congestion pricing revealed the confusing nature of current MTA governance: The board purports to have independent fiduciary responsibility but in fact winds up doing the governor’s bidding.
The MTA could operate like other state agencies rather than continuing to be a publicly owned corporation with its own board. One advantage of this approach is that voters would have a clearer understanding of the state’s responsibility, and that might make the governor and Legislature more responsive to voter concerns. It was for similar reasons that the City turned its Board of Education into a Department of Education reporting directly to the mayor.
However, an independent board serves as a valuable buffer from electoral politics. The MTA’s board members, in theory, can focus on the transit system’s long-term needs and not obsess over how their policies will affect the next election.
Option 5: Elect board members directly
The board members of the MTA could be elected by New Yorkers. That is how board members are selected in the San Francisco Bay Area for the BART system. Each member must live in the district they represent.
If New York were to adopt this model, the MTA board would be similar to a legislature or a city council where members, representing different political parties and geographic areas, vie for control. This model could succeed, but only if the MTA were given the ability to raise taxes; otherwise it offers few benefits. Today, BART is certainly not in an enviable position. Ridership has plummeted because so many of the Bay Area’s tech workers are working remotely and BART has historically relied on fares to cover most of its operating expenses.
No one best way
There is no one best way to structure a transit agency. Every region takes a different approach to transit governance and funding based on its own history, laws, growth, geography and economic development.
If the MTA were broken into smaller agencies, the individual ones would not be nearly as influential in Albany.
If you visit Seattle, you will see how the Puget Sound region is undertaking the most ambitious transit expansion in the U.S. It is able to do so not because the county executives are responsible for bus and train services, but rather because the region’s economy is booming and Seattle does not need to spend billions of dollars every year to maintain an aging and obsolete infrastructure.
Similarly, the governance structures in Seoul and Tokyo are not the reason for their remarkably clean and reliable train services. Those cities are blessed with much more favorable national urban policies, and the transit agencies do not need to incur extraordinary costs associated with vandalism and graffiti.
Some changes that do not require a dismantling or wholesale reform of the MTA would provide meaningful benefits with only minimal risk. The following six ideas would increase revenues, cut expenses and enhance transit services.
Wrestle honestly with fare evasion. A transit agency’s reputation is a critical factor in its ability to obtain more resources from legislators. Right now, the MTA is having a hard time convincing people it needs more money when fare evasion on subway and buses is so rampant and mostly ignored. The MTA and the City need to change the sense of entitlement held by many fare abusers and enforce the law. The lost revenue is real, at least $700 million per year. With nearly half of bus riders failing to pay, we have to start seriously considering two options. One is to have the MTA and the state take the lead in enforcement. The other is to raise taxes and follow the Luxembourg model, where buses (and trains) are free.
Tap into new revenue sources. Another way the MTA can obtain more resources is by tapping into some of the toll revenue collected by the New York State Thruway Authority. That won’t be very popular for drivers crossing the new Tappan Zee Bridge, but those drivers are better off paying a few extra cents rather than driving in a region with a crumbling transit system.
Cut pension expenses. One way to reduce MTA’s future expenses is by reforming the pension system. To provide some context, the MTA will collect about $4.7 billion this year in fares from railroad, bus and subway riders while it spends about $1.3 billion on pensions to its former employees. Here is one example of how pensions can be overly generous: MTA employees who earn $75,000 for 22 years and then $150,000 for three years, are given an annual pension of about $75,000 upon retirement. If they live long enough, they can receive pension payments for more years than they work.
Give the City its proper input. The New York City mayor’s appointments to the board should not be subject to the governor’s approvals. Right now, the governor can nix the mayor’s recommendations and keep the mayor’s seats vacant after a member’s tenure is complete.
Be more responsive to customers. When well-heeled board members do not use transit, they are out of touch with the needs and desires of their customers. Some transit agencies require some or all of their board members to regularly use their services. The MTA should also.
Foster cooperation. The region’s transit agencies are competing with two seamless travel options: driving and ride-sharing. Drivers use one electronic tag and one app to get to their destinations. Uber and Lyft have raised the bar on how easy and convenient travel can be. Transit will continue losing riders to its competitors unless and until the transit agencies do a better job coordinating information, schedules and fares. The region can start by offering discounts to riders who use multiple transit services.
The best and fastest way to improve our transportation system does not require reforming any government agencies or amending any state laws. Political courage is required, though. If Gov. Hochul could just press the unpause button on congestion pricing, she would provide the MTA with desperately needed resources, and also improve air quality, reduce traffic, speed up buses and encourage more people to use transit for generations to come.