Kruger, Espada, and Diaz Leave MTA Rescue on Life Support

The three city reps who nearly derailed the Democratic takeover of the State Senate have issued a joint statement declaring — transit riders be damned — they’re not going to support bridge tolls. Liz Benjamin at the Daily Politics has the story:

The Three Amigos — Sens. Carl Kruger, Pedro Espada Jr. and Ruben Diaz Sr. — who recently reaffirmed their relationship and started strategizing again
as a team, today issued a joint statement demanding that the MTA go
"back to the drawing board" and do everything possible to avoid tolling
the East and Harlem river bridges.

The three senators are "demanding" that the MTA agree to a forensic
audit conducted by an outside entity and a complete accounting of all
its assets – including real estate holdings, which is an issue other
lawmakers have been hammering on for a while now.

The trio is open to the idea of a payroll tax, which is the other
revenue-generating proposal made by the Ravitch Commission, but called
the tolls a "non-starter."

With the Democratic majority hanging by a minuscule 32-30 thread and Republicans showing no signs of breaking ranks to support the Ravitch proposals, it would take a unified front in the Senate to pass the rescue plan. The brazen disregard for transit riders displayed by these three lawmakers could very well torpedo any chance to stave off drastic fare hikes and service cuts, shore up the MTA’s finances, and keep the subways from slipping into a state of decline.

To better appreciate the fundamental absurdity of their arguments, follow the jump or, better yet, read Liz’s full post.

What the amigos might want in exchange (albeit not formally, because
that’s illegal) for their support of the MTA bailout is unclear.

During an interview yesterday, I asked Diaz Sr. whether he could
ever see his way clear to supporting tolls, and he seemed to be open to
it – but only if someone would "explain to me, please" how camera
technology is going to make sure drivers from out of state pay their
fair share.

"Why should I be punishing my state and the people from my
district?" Diaz Sr. said. "As soon as the people from my district and
the people of New York are protected, I will support anything that
doesn’t punish the need ones."

Diaz Sr. then insisted to me that there are "other ways" to generate
and/or save the revenue necessary to stave off massive fare and toll
hikes. He mentioned two of his own bills – one that would require the
state to buy prescription drugs from Canada and another that would
force ConEd to pay taxes – for starters.

  • Earl Dense

    In fairness to the detractors of bridge tolls, why would anyone want the MTA to mismanage one more dollar? The Authority has shown itself to be completely unable to govern itself (wasn’t there a $900+ million surplus as little as 2 or 3 years back?). I agree that this is a political ploy by the senators, but does anyone trust the MTA with additional revenue? The MTA managed its way into this problem, and more cash won’t change the simple fact that it’s a bloated and poorly run organization. Also, how much would it cost to install and collect these fees? I assume that it would cost several hundred million dollars, but I have no idea.

    None of this is meant to take away from the severity of the problems Mass Transit experiences in New York.

  • Alright people it’s time to contact these gentlemen. Their contact info is as follows:

    Diaz, Ruben , Sr.:
    http://www.nyssenate32.com/32/Contact.aspx

    Espada, Pedro , Jr.:
    http://nyssenate33.com/33/Contact.aspx

    Kruger, Carl:
    http://www.nyssenate27.com/27/Contact.aspx

  • J-Uptown

    The MTA has inherently unstable finances, since it is highly dependent on fees from real estate transactions. For this reason, when real estate booms, the MTA has an unexpected surplus, and when the real estate market tanks, the MTA is in the red. We’ve seen both in the past few years. Since the MTA does not create the laws that determine its revenue sources, blaming the MTA for its structural instability is pointless. That’s like blaming a farmer for a drought.

  • Earl: Oh, please.

    “Does anyone trust the MTA with additional revenue?” Would you like to suggest some revenue-free ways the MTA can keep the subways and buses running without service cuts? Or a way of transferring the MTA’s role in running transit to another agency?

    “The MTA managed its way into this problem…” Actually, plummeting revenues from real estate taxes had a lot to do with it. Not to mention all the revenue lost when congestion pricing went down.

    “…and more cash won’t change the simple fact that it’s a bloated and poorly run organization.” Please defend your implication that less cash would help, and tell us how.

    “Also, how much would it cost to install and collect these fees? I assume that it would cost several hundred million dollars, but I have no idea.” It’s one thing to pose a question without having the data. It’s another to pick a huge number out of your ear and expect us to take it seriously.

    I guess this is the kind of discourse we can expect to see in this forum as the people who opposed congestion pricing try to raise the same fear, uncertainty, and doubt concerning bridge tolls.

  • vnm

    If there are any upstate Republican Senators reading through this thread, listen up:

    The 12-county payroll tax and the bridge tolls are collected FAR from your districts. The Ravitch plan represents Downstate money taking care of Downstate issues. Isn’t that exactly what you want? Your constituents will appreciate it.

  • “Why should I be punishing my state and the people from my district?” Diaz Sr. said.

    Yes, that’s what we’re all trying to figure out.

  • Earl Dense

    smart managers realize that these funding streams are cyclical and that when you have a surplus, you pay down your debt, save, etc. (you don’t give a christmas discount), because eventually the boom slows and the money will come in at a slower rate. Look at the board of the MTA see how many of those people know anything about transportation, and see how many of them have vesting pensions, drivers, etc. for doing absolutely nothing except screwing new york city. The answer to this issue isn’t more money for some connected contractor to fleece the state, it’ll hinge on making the right choices. I’m all for congestion pricing (that is appropriately calculated), a vmt tax, etc., but asking for more money obscures the broader problem, which is bad management.

  • Streetsman

    Simply suggesting the MTA needs to be audited neglects the fact that there is complete collapse in many of their key sources of revenue. An audit isn’t going to find a billion dollars. You can go ahead and audit the MTA’s finances anytime you like if you feel there is waste or bloating, but that’s no reason not to shift the balance of their financing from less stable sources (real estate, property taxes) to more stable ones (auto tolls).

    An audit does not solve the problem. The MTA needs cash now or hundreds of thousands of voters in these districts won’t be able to get around. And what’s worse, those who can afford to will probably have to start driving and that’s bad for everyone. Thanks a lot.

  • Earl: I’ve taken a few deep breaths, and thought you raised a lot of great points in your last post. The only part that worries me is this: “asking for more money obscures the broader problem, which is bad management.” That shouldn’t be an either/or proposition. The MTA needs more revenue, and riders need the money to be spent responsibly. Anything less won’t do us any good.

  • Earl Dense

    I agree that the MTA needs more stable revenue streams, and maybe even more money (though i’d like to see the MTA managed properly). When the MTA was awash with money, we allowed the inefficiencies to go by without any comment, but now that money is tight, we should use this as an opportunity to re-structure the agency. The MTA needs our money to survive and we should use that as a chip to improve the Authority’s performance. Just giving them money without any restrictions is like trusting Citigroup, Ford, GE, or, AIG to manage their money better the next time around. Like those institutions, they don’t have the credibility to make that claim, and that’s my main issue with giving them more money. Why should good people who recognize that the MTA is terribly flawed be forced to go to bat for this institution? Let’s blow it up and make something better! (yes that’s crazy.)

    The MTA has had full control of NYCT for 40 years and hasn’t added much new capacity (save buying out private bus companies in queens) in that time. How is that acceptable?

  • vnm

    Earl, the MTA has an annual operating budget of $11 billion and is $26.3 billion in debt, in large part because Pataki didn’t fund the 2000-2004 capital budget so they borrowed. How far is $0.9 billion going to go over two or three years?

  • vnm

    Earl, Not adding capacity in 40 years is most certainly NOT acceptable, but again, you’re blaming the wrong entity. The problem is chronic underfunding for mass transit ever since the post war “autotopia” planning mindset took hold. Every time the MTA runs a train, it loses money. (Fares cover about half the cost.) How are they going to expand service when there is a monumental challenge is just paying for service that already exists.

    Blaming “management” is exactly the crutch politicians lean on when they don’t want to do anything about the real problem. Let’s focus on the broader problem, which is chronic underfunding of mass transit in this country.

    Awash in money? Ha! They had temporary surpluses (of pennies on the dollar of what it costs to run the system) during the real estate boom. Their real estate tax revenue is tied to the health of the business cycle instead of being steady and predictable (like, ahem, toll revenue).

  • When the MTA was awash with money, we allowed the inefficiencies to go by without any comment

    Speak for yourself. Some of us didn’t.

    Are you seriously suggesting holding the entire transit-riding public hostage just because you’ve decided that now is the right time to reform this agency? Gee, thanks.

  • Earl: I hear what you’re saying, but how would you improve the MTA’s governance? As I understand it, the MTA is a state agency with board members appointed by the governor and approved by the state senate.

    Do you propose to put pressure on the governor and the legislature to make better appointments? If so, how would you go about this, and who would you like them to appoint?

    Or would you prefer to restructure the agency into something different with an improved form of accountability? And what are your ideas on that?

  • Ian Turner

    Earl,

    I guess what you’re saying is that the MTA should have raised fares three years ago in accordance with increased operating costs and despite the surplus at the time. I agree, but do you seriously think that politicians would allow such an action? Can’t you hear the complaints of “why are you hurting the riders when there is a surplus?”

    The MTA is not some private company, its leaders are appointed by our elected representatives and those representatives are accountable to their appointee’s actions.

    –Ian

  • Niccolo Machiavelli

    You guys have done a pretty good job separating the wheat from the chaff in Earl’s comments. There is some wheat there but generally he buys into the canard that mismanagement caused the operating and capital deficits. Mismanagement should surely be rooted out and stomped on whenever possible. But in this case most of the mismanagement has been message mismanagement so that apparently well-meaning individuals like Earl for some reason think that “see how many of them have vesting pensions, drivers, etc. for doing absolutely nothing except screwing new york city”. Well the answer to that would be none, if anyone cares at this point.

    Yeah, lots of the board commissioners are rich people, many appointed by the prior governor. Several own trucking companies (that generally means they know something other than nothing about transportation). CEO Sander gets a driver, but the driver is really a body-guard, and I personally think that is very justified unless Earl is calling for whacking Lee Sander.

    The MTA is an enormous agency, 67,000 employees 8.5 million daily customers, that is entirely open to public scrutiny. There is no bigger lie in American politics than the MTA is not “transparent”. It is so transparent that its real problems have become invisible. It is a big slow moving target for hack journalists because of its mandated transparency. If the cable company or Exxon had the sort of public meeting sunshine requirements the MTA operates under they too would be simple headline makers for the tabloids and maybe they should be, it would give Pete Donahue something else to mislead the public about.

    There is fat in every enterprise worldwide, sometimes it is called profit. Efficiencies should be sought out. But I think in Earl’s comments we see how good the MTA really is at their real role in the NY political economy and that doesn’t have anything to do with moving 8.5 million people to work each day 95% on time for a fair price (that little detail somehow eludes the critics). The real job for the MTA is to let the politicians take credit for success and hand out blame for failure. This little financing legislation exercise just shows how great they are doing their job.

    Choices have to be made. When the real estate was booming and a surplus was being pumped in by the MRT the MTA planners made very clear, public projections that when the business cycle turned down not only would the surplus disappear but also a substantial deficit would occur. Their margin of error on those charts was not nearly as great as the hee-haw Wall Street Yahoos who were pumping up the price of derivatives. Actually the MTA projections have been remarkable for their accuracy. And right now the $1.2 Billion operating deficit could easily turn into $2 Billion without anyone on the MTA turning a single knob.

    That’ll make great headlines won’t it? And people can go on believing that with a little tighter management by those shrewd private sector thinkers at the Manhattan Institute they can wish away a decade and a half of politicians using the MTA for a cash cow to deliver tax cuts at campaign time.

  • Felix

    The Republicans supported congestion pricing, why don’t they support bridge tolls? Is it because Bloomberg isn’t lobbying them?

    Also, the Tri State Campaign had an interesting post on their blog showing the number of upstate districts that have MTA subcontractors in them.

  • Larry Littlefield

    Kruger, Espada Diaz Sr. are doing what the majority of their generation has always done — take, take, take and refuse to kick in. Today the MTA, tomorrow public services and benefits in general.

    I’ll say it again — they and people like them have already done so much damage that all that is left is for the blame to be assigned, and I will be happy to have the entire NYS legislature take it.

    If the MTA shuts down the economy tanks. If the economy tanks, the state goes bankrupt. If the state goes bankrupt, they don’t get their pensions. They have something to lose. In the long run, everyone else no longer does.

    There will be general strikes in this country. I said it several years ago. They are desperately trying to direct the anger at someone else. Everyone who has made out over the past 15 is doing so.

  • Larry Littlefield

    And, by the way, I’m still opposed to the payroll tax. The only acceptable solution as far as I’m concerned it to tax retirement income, and use the funds to pay back all those debts and unfunded retirement liabilities. After they mugs are through sucking us dry, they’ll be living off us and not contributing a dime in tax.

    The MTA could then use its existing revenues for transportation.

  • Shemp

    There was never a surplus. Earl, you need to stop reading the Post and Daily News as if they convey actual information. There was more revenue from transit funding sources than anticipated during some years, but the MTA never came remotely close to operating in the black. It does not do that and never will.

    The agency’s main problem is ballooning debt service on its capital programs. vnm, it wasn’t only the 2000-2004 capital program, it was also the 1995-1999 capital program, and to a large meausure, much of the current capital program that together amounted to an unbelievably massive borrowing binge by a Republican governor who ran on fiscal responsibility and tax cut platforms. Democrats in the Assembly went along with it 3 times running.

  • Earl Dense

    No one disputes that the mass transit is poorly funded or poorly represented. The issue is that the MTA is a terrible authority, and before we give them a check or another revenue source let’s get something in return. I agree that a lot of my points dovetail with politicians who are generally mass transit obstructionists. While that’s unfortunate for me, I don’t see why re-structuring the current board wouldn’t be useful. Why is the one-member who is there as the riders’ advocate a non-voting member? The members of the Board who move freight don’t know much about mass transit, and don’t really care about the City’s buses and subways. The Chairman and Vice-Chairs of the MTA work in real estate and retail. While some may view operational critiques as a red herring, I think that it’s related to the broader effectiveness and efficiency of the MTA.

    I don’t think anyone who uses the MTA’s service on a consistent basis would argue that it does an especially good job. There’s a reason why a city like paris, which has a 1/4 the population of New York serves almost an equal number of rides. I know that when I go to work, I usually miss at least one train a week due to over-crowding, more often than not, my train gets stopped at the approach to the Manhattan Bridge (a terrible choke point), and then again on the Manhattan Bridge, and on the weekends, it’s fairly difficult to get reliable service. If another option of equal or lesser cost existed, i’d gladly try that (i do like biking).

    Solutions are hard to come by, and assuming that more money will be hard to come by, I’d like to see more lay-offs, public-private partnerships to build more capacity in the city (fingers crossed on stage one of the second avenue subway), a re-structuring of the MTA that gives more power to the ED/CEO of the MTA. He has so little authority that he cannot do any of the things he wants to fix the MTA. In an ideal world, NYCT would be it’s own entity that was governed by folks from the city.

  • Larry Littlefield

    “The agency’s main problem is ballooning debt service on its capital programs. vnm, it wasn’t only the 2000-2004 capital program, it was also the 1995-1999 capital program, and to a large meausure, much of the current capital program that together amounted to an unbelievably massive borrowing binge by a Republican governor who ran on fiscal responsibility and tax cut platforms. Democrats in the Assembly went along with it 3 times running.”

    So did the MTA Board. And the Democrats pushed all those “free” retirement enhancements, and the Republicans went along with those.

    So how do you reverse 15 years with the same people in charge, looking to make a few more scores before leaving the city and state in ruins? How do you come up with funding when the senior citizens who benefitted from all this in the past don’t even pay taxes? You don’t.

    What the last three capital plans and the 2000 pension enhancement did to the MTA, the 25/55 pension for the teachers will do to the public schools — which were barely beginning to recover from two prior rounds of defunding.

    You think the MTA is mismanged, Earl? Our Medicaid spending is the highest in the country by far, adjusted for everything. It isn’t that high for children and younger people; it’s sky high for seniors.

    Public school spending in the part of New York State outside New York City is ridiculously high, previously funded by low spending in NYC, now funded by nothing.

    Pensions and debts are bankrupting us.

    Our police forces is 2 1/2 times the national average, relative to inflation.

    Meanwhile, the NYC subway covers a higher share of its operating costs from fares than any transit system in the U.S. The LIRR doesn’t do as well, mostly because it is full of the kind of political grifters who plague our state, but don’t blame MTA management, because they are protected by Albany.

    These are facts, I don’t make them up, I compile the state from teh Census of Governments and other sources and tell people what it says.

  • Niccolo Machiavelli

    Earl I do seriously want to hear how you propose to restructure the Board. One thing about the present board, I thought you misunderstood this from one of your prior posts, is that it is an unpaid board with political appointments from specific jurisdictions, some voting, some non-voting. Do you propose an elected board (I suggest there would never be another fare increase if that is what you want), or a paid professional board presumably hired by elected officials? What, more precisely, do you suggest as an alternative form of governance? There are many different forms of choosing and empowering controlling boards all that yield different results. The MTA is far from perfect but its chief role is to insulate the politicians from the difficult decisions that often cut differently between jurisdictions. Thats what transportation does, it moves people and goods between and through different jurisdictions. Are you running for Chairman if they created a board election?

  • “There’s a reason why a city like paris, which has a 1/4 the population of New York serves almost an equal number of rides.”

    There certainly is, and the reason is that New York (considering all the boroughs, not just Manhattan) does much more to accommodate and promote automobile use than Paris.

    If I wanted to be clever, I could say that the reason has a name: Robert Moses.

  • Paris proper may have a quarter of the population of New York, but the Paris urban agglomeration has more than half the population of New York’s. So the fact that ridership is the same is more plausibly due to funding than anything else.

  • All of the remaining 3 amigos might have primary opponents this year!

    Against Carl Kruger, Russian-American attorney, judge, and public transit enthusiast Igor Oberman is already campaigning.

    Check out: http://www.streetsblog.org/2010/05/03/kruger-challenger-igor-oberman-campaigns-on-support-for-transit/

    Then please go to http://www.igoroberman.com and volunteer for the campaign or contribute, it’s only with your help that Igor will get and stay on the ballot!

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