Want a Clean Bill of Health for the MTA? Call Obama.

Former MTA CEO Lee Sander spent the last two-and-a-half years doing his best to make the MTA a transparent, accountable public agency, and in doing so restore its reputation. He let the sunshine in, but was unable to undo the damage to the agency’s image caused by years of attacks from transit advocates, unions and politicians.

In politics, reputation matters. The scapegoating of the MTA has undermined the political case for
transit funding and given cover to the hypocrites in Albany who blame the
MTA, instead of themselves, for the agency’s funding woes. Looking forward, it
is critical that the MTA burnish its reputation as an effective and
accountable public agency and excellent investment for public funds. There are many political forces that benefit
from keeping the MTA as a scapegoat, its reputation besmirched. So, a clean
bill of health for the MTA requires an unimpeachable, politically formidable force
far above the gutter of the New York political fray. How about President Obama?

The president has
spent enormous energy restoring public confidence in the banking
system. A key
part of his efforts has been the Treasury Department’s careful scrutiny of bank
management and finances. Mayor Bloomberg and Governor Paterson should
ask President Obama to help restore public confidence in
the MTA by ordering the Federal Transit
Administration to send in a team of management, finance and policy
experts. The MTA
receives millions in
federal support and the U.S. government has a strong interest in seeing
that money well spent. The FTA team would definitively and publicly
the state of the MTA, detailing both its good and bad management
practices while clarifying and vetting agency finances.

Most transit experts
believe the MTA is a relatively well run public agency which compares favorably
with other big American and foreign transit systems. The agency’s biggest problem is that the state
and city have spent the last two decades reducing their financial support,
loading the agency with debt, and making it overly dependent on volatile, cyclical
funding like the mortgage recording tax. The FTA’s assessment would bring these
facts to the fore and lay the political groundwork for a stronger case for
transit funding.

10 thoughts on Want a Clean Bill of Health for the MTA? Call Obama.

  1. The public authority structure is still not the most transparent. There’s not much downside to making the MTA a cabinet-level state Department of Metropolitan Transportation – and it would wipe out the main weapon that free-bridge warriors have against it.

  2. I fully agree. I’d like to add that the Governor’s comments yesterday were disgraceful and added to the significant damage already done to the agency by Malcolm Smith and Richard Brodsky. Instead of heralding a new era of reform and innovation in transit as they should have, the Democrats have so far trashed the system and left it even weaker than it was under the Pataki era.

    As for a leader who can help continue the process of reform that Lee Sander started, and who has experience building the public standing of a major transit agency with aging capital stock, I nominate Jay Walder.

  3. “The damage to the agency’s image caused by years of attacks from transit advocates, unions and politicians. In politics, reputation matters.”

    I absolutely agree, of course, but would go further.

    Attacks by transit advocates, unions and politicians are popular because they tell people what they wanted to hear, that they ought to get something for nothing. And, frankly, the MTA responded by delivering, and paying for it with debt.

    “Transit advocates” got (given the discounts) far lower fares (particularly adjusted for inflation), and didn’t worry about the future consequences. Even the very enlightened ones on this board don’t want to hear the fare has been too low and higher fares are the long term result. This is a repeated cycle in transit history: “save the fare” followed by debt and deterioration — and then even higher fares.

    As for politicians, one has to ask who got the money the MTA didn’t get?

    I can tell you that the organizations that spend the most on lobbying in Albany are the Greater New York Hospital Association, Local 1199, the nursing home industry, and the New York State United Teachers, representing teachers outside NYC.

    And the categories in which NY’s spending is far higher than anywhere else in the country (adjusted for everything, including the higher cost of living and need for higher wages in Downstate NY), are Medicaid (particularly for seniors) and public schools outside NYC (which have been on a hiring binge since Pataki was first elected). In addition to costs shifted from the past such as debt service, pensions and retiree health care, of course.

    The TWU got pension enhancements in 2000 and, in some cases, avoided productivity gains. Recall the MTA, now that there are Metrocard machines, wanted the station agents to move out of the booths and, when there is a newspaper on the platform, pick it up before it blew onto the tracks. That was stuffed to the sound of “Hallelujah.” I’ll bet a close look would show more non-TWU workers too. The TWU must be disappointed. Its retirees got a MUCH bigger cut of the spoils when the system was destroyed in the 1960s and 1970s than they did this time.

    The truth is what people with power don’t want to hear, even if it is what “most transit experts believe.” Even President Obama chooses to talk in vague terms about responsibilities that were shirked in the past without calling anyone out, which means that those doing the shirking feel just as entitled as they used to.

    Sander/Spitzer didn’t call anyone out when they took charge. They made it seem like everything was fine for the better part of a year. Neither did the Ravitch report. No honest tabulation of how we got here. Therefore no willingness to make any sacrifices to avoid (rather than defer) an institutional collapse.

    The reputational reality of this awful bailout is that everyone who works in the outlying counties and drives or rides a cab feels cheated by transit riders, and they enjoy feeling that more than they would enjoy the alternative.

  4. A Federal takeover would be worse I fear. Better for Weiner & Rangel to fight for more capital funds than have the Feds move in altogether.

    But if Paterson wants to really save the MTA, he needs someone with impecable financial credentials that can also explain how investment in the system pays off in the long run. I’ve suggested Carl McCall before, but maybe even Spitzer himself, long known for his public ethics (rather than for his private ethics)

  5. Carl McCall is a future seller.

    He is someone who trancends the public sector pension ripoff (he pushed through the 2000 deal to get backing for Governor and said it would be free) and the private sector corporate ripoff (on the board of the NYSE he approved outrageous pay packages). Right down there with Pataki in my book.

    Spitzer had his chance, and disappointed.

    How old is David Gunn anyway? You want to know who the transit buffs with a long-term perspective respect most of all? It’s him — the Paul Volker of transit. Told the truth and pissed a LOT of people off doing it.

    The likelihood is someone who plays ball. But ideally it might be best skip a few generations and bring in someone in their early 30s with Gunn as a mentor. Too many in between advanced their careers while creating an institutional collapse.

    The FTA, by the way, has staff in New York that attends lots of construction meetings on individual capital projects and gets to scrutinize every MTA report, including those internal. They never asked the right questions. I know — for a while it was my job to answer some of them.

  6. To #1 — that would kill the funding. The public authority structure keeps the bondholders safe from annual appropriation risk.


    I am not totally sure what is with the cultish fervor over “transit experts.” Transit is just running some cars in a straight line. The same with buses. We have done this for 150 years. The person at the top doesn’t have to be an “expert” in this. The agency heads need this expertise, but not necessarily the boss.

    So, I never really thought that Sander was a “transit expert,” but I’m not sure that he needed to be. He just needed to know that transit was important, which he did, and know that it’s a general goal to have faster commutes (which he did, via the new bus service rollout with DOT).

    What the MTA needs is a finance expert who knows when his staff is trying to screw him over because they want jobs at banks later (this is not really being an expert, either, just having common sense).

  7. To #1 — that would kill the funding. The public authority structure keeps the bondholders safe from annual appropriation risk.

    Isn’t that what we need to do? It was the funding that got us into this mess. If the government isn’t willing to properly fund transit, we might as well know sooner rather than later.

  8. Yes, it’s easy to attack the MTA. But anyone who has dealt with the agency knows that it is easy to attack in large part because, over the years, it has dealt with the public arrogantly and, often, foolishly.

    There has been some progress at the MTA in recent years, but Sander and the MTA chairman and others mostly just complained about how the agency didn’t get credit for the great job they were doing. Not exactly the way to win back public confidence.

    At the same time, Paterson’s comments about cleaning up the place by getting rid of the guy who fought hard for the agency are laughable. As for the Obama administration, I’d prefer that they just send money — they’ve got enough management problems on their hands in Washington. There’s little they have to offer us on that front.

  9. Scapegoating the MTA? While we all agree that transit is underfunded, it in no way helps that we’re dealing with an organization that screams poverty every chance it gets.

    Remember $500 million surplus they hid to justify a fare raise? What about the silly give backs to transit riders when we knew trouble was on the horizon?

    Better yet, show me one capital improvement that hasn’t spiralled out of control?

    Fulton Street? nope
    MTA headquarters? Outright fraud with MTA employees going to jail
    L Train Switches? uh uh
    Security improvements with Lockheed? nah
    South Ferry Terminal? yawn
    2nd Ave Subway? To be completed on the Greek calends

    At some point we need to realize that the MTA doesn’t operate in an open fashion and is more concerned with greenlighting boondoggles in Manhattan than actually making improvements and repairs that maintain, repair and enhance transit for the majority of riders.

    BRT could be completed for a fraction of just the overruns of these capital projects. Frankly there is no trust in the MTA because of their actions and the perpetual threat of service cuts gets old as they grandstand to justify an ever increasing black hole of unaccountable funding.

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