Five Questions: Should The City Take Over the Transit System?

City Council Speaker Corey Johnson will unveil a comprehensive roadmap for a city takeover of its buses and subways on Tuesday.

Council Speaker Corey Johnson may want the city to take over the subway. Photo: Gersh Kuntzman
Council Speaker Corey Johnson may want the city to take over the subway. Photo: Gersh Kuntzman

Wouldn’t it just be better if the city was running its own transit system instead of the governor and his unaccountable MTA?

On Tuesday, Speaker Corey Johnson is expected to unveil a comprehensive roadmap for just that: a city takeover of its buses and subways. After all, city riders, city tolls and city taxes pay for most of the system anyway — and Johnson has already said he isn’t convinced that the governor’s congestion pricing plan would truly put all of the toll money in a lockbox exclusively for New York City’s transit needs.

Johnson is right to be concerned. City residents provide the bulk of the MTA’s revenues, but its expenses hardly reflect that: Nearly two-thirds of the new construction funded by the 2015-2019 capital plan was for suburban commuter railroads, which account for just seven percent of the MTA’s total ridership. And suburban legislators are already angling for that approach to continue.

Still, would withdrawing from the MTA improve the city’s leverage in the never-ending funding debates? We won’t know Johnson’s plan until he unveils it, but we’ve analyzed the basic idea. Could it work? Here’s what you need to know:

What would this even look like?

If Johnson succeeds in his push for city control, a new agency would run the subways and the buses currently constituted as New York City Transit and MTA Bus Company. But any plan is dead in the water unless Johnson’s new agency also gains control of the agency’s fare revenue — and, importantly, the toll revenue from MTA Bridges and Tunnels, which operates entirely within city borders.

Currently, the surplus revenue from bridge and tunnel tolls (after operating and maintenance) is split evenly between NYCT and the MTA — which makes little sense given the breakdown of ridership. That formula is long overdue for a renegotiation, which any city takeover of transit would hopefully hasten. Still, it’s hard to see that happening.

Johnson’s past statements on congestion pricing could hint at what he’s planning to announce on Tuesday. In September, the council speaker suggested that if the state failed to enact congestion pricing, the city could do it on its own. Legal scholars disagree on whether that’s true — but Johnson is one of the few city leaders whose shown any interest in pushing the question.

What’s the case for this?

Let’s phrase that another way: Why the hell not? Given that the current organizational structure has been in place for five decades and counting, and it has led to years of stagnation and decline, Johnson can’t be faulted for wanting to try something new.

By and large, when governments shift control of an agency in one direction or another, operations improve.

“Overhauling the governance structure of a poorly managed place tends to make it better, regardless of which direction the overhaul is in,” said writer Alon Levy, an expert on international best practices for transit system. Of course, Johnson could be using this to give some oomph to his likely mayoral campaign. But a craven political stunt could work in the public’s benefit, Levy argues. If Johnson promises to overhaul the subways and buses, he’ll be far more likely to hire transit leaders to do just that.

“It means that suddenly, you cannot say we have always done things this way,” said Levy.

What would city leadership actually do differently?

Most important: Putting city lawmakers in charge would let every New York City resident know where the buck stops.

At present, the MTA is in the hands of the governor, who more often than not hails from outside New York City. Accountability and oversight, meanwhile, lie primarily with the state legislature, whose members represent the interests of Syracuse, Buffalo, and Rochester as well as the counties of the New York City region.

As a result, questions regarding MTA funding and management are always weighed against the needs or concerns of the rest of the state. So instead of holding hearings on each of the major issues facing the city’s transit system, the state senate’s transportation committee is currently on a region-by-region tour. Despite being the single largest state agency and carrying nearly eight million riders per day, New York City’s transit system is getting the same number of oversight hearings as its counterparts in Long Island, the Hudson Valley, Syracuse, and Buffalo.

“The subways and buses that operate fully within New York City are a New York City local concern,” Second Avenue Sagas blogger Ben Kabak told Streetsblog. “It doesn’t really make sense that the people who are in charge of it and who have the responsibility for it aren’t local politicians.”

Who pays?

Even if the city proved the superiority of its management, however, the state would still control transit funding. The city is unable to levy taxes without state approval. The debate in Albany over who pays and who gets paid would remain mostly intact.

Meanwhile, the city would assume responsibility for New York City Transit and MTA Bus Company’s combined $12-billion operating budget, which represents 13 percent of the $92-billion FY 2020 budget proposed by the de Blasio administration. It would also likely assume responsibility for those agencies’ $40-billion maintenance bill as well as their share of the MTA’s $41-billion debt.

Consider the city’s inability to find the cash to address NYCHA’s $32-billion capital needs — and multiply that by at least two-fold.

“Even if there was a way to basically leave long-term debt behind, the work that needs to be done at transit would require a lot of new borrowing, and that’s going to weigh on the city’s current debt-load,” Citizens Budget Commission infrastructure expert Jamison Dague told Streetsblog. “It’s a huge new expense and capital infrastructure asset that’s going to require a lot of investment.”

Here, Johnson may get creative by finessing some sort of home rule power denied to two centuries of New York City governments, which leads to the most important question…

Is there even a political path?

Many politicians have suggested a city transit takeover over the years. As far as Streetsblog can tell, no one has ever actually ventured to make it happen. Likely for good reason.

Ultimately, any attempt to wrest control of the transit system from the state forces the various counties and jurisdictions to defend their fiefdoms. The suburban counties, for example, actually need the MTA in the hands of the state to keep their railroads running. They don’t have the borrowing power to do it on their own.

Johnson’s forthcoming proposal is expected to including some sort of funding mechanism, which will need the approval of the very same state legislators unwilling to fund NYCT today. It’s hard to see how the city running the subways and buses would make suburbanites less protective of state coffers.

The political path is made even more difficult with Governor Cuomo newly emboldened to take more control over the transit system, and Mayor de Blasio now in his corner. Perhaps stubbornly, the governor seems to want to right the mess he let fester over his first eight years in office.

So why doesn’t Corey Johnson just let him? It’s possible that he does. All politics is performance, anyway.

Perhaps the goal here is simply to expose the interplay between the needs of the city and the rest of the region — and compel elected officials outside of the city to care about the city’s transit system.

And if congestion pricing doesn’t pass in Albany, Johnson’s city takeover moonshot may present itself as the only way out of this mess.

  • Larry Littlefield

    If the city wants to assume a burden, it should take over the bus and paratransit system as I suggested. Unlike the trains, the buses run on city streets. The operating deficit would be a massive hit to the city budget, but DeBlasio has been begging to raise taxes, and this would be an excuse. Federal capital aid would be used first and foremost to buy buses, limiting the capital hit.

    In exchange, among other things, the city could demand that it no longer get screwed with regard to the local share of Medicaid and municipal aid.

    And as a new state run “Metropolitan Railroad Authority” is formed, the grifting by the LIRR be ended by having, in effect, NYCT take it over and their employees replaced.

    One thing is for sure. New York City politicians should stop going along with city residents being sneered at by those riding our our backs. As I said in the post linked above, the entire fiscal relationship between NYC and the rest of the state should be re-examined. Not because it is going to be changed in our favor — they re going down. But because they need to be forced to acknowledge what it is, not only now, but also in the past when NYC was down and in need.

  • Sassojr

    Unfortunately, even if the city got everything in wanted/needed to secure fair state funding for a city takeover, how long would that last? One election cycle? I don’t know if the numbers work out, I suspect they do; but, the only way I see this working is through full separation which will NEVER happen. Upstate hates NYC, but they love our money.

  • sbauman

    If the city wants to assume a burden, it should take over the bus and paratransit system as I suggested. Unlike the trains, the buses run on city streets.

    Paratransit and buses are the loss leaders with respect to the fare recovery rate(FRR). It’s around 30% for buses. It’s about the same for most of the buses in this country. The subway FRR is between 65% and 70%, depending on the year. Sticking NYC with the losers doesn’t appear to be a bright idea.

  • If the truly just goal of secession is out of the question, then perhaps some measure of home rule is attainable.

  • Larry Littlefield

    New York City is paying for it any event.

  • Larry Littlefield

    Most people Upstate don’t hate New York. Sleazebag politicians stay in office by playing the tribal game. If it isn’t race, religion, class, they’ll find something to distract attention from the diverging interests of insider predators and the rest of us.

    Look at what goes on in the city. “I’m in favor of people like us against those people from Manhattan” where half us work every day.

    What our representatives — if we had them in the state legislature — would need to do is throw any and all unfairnesses back at them, and make them respond. Same thing as with Generation Greed. It won’t make things any better. But confronting rationalization and entitlement might at least stop things from getting worse.

  • Fifty First State

    “Is there a political path?” No. None, nada, zero. This is as likely as NYC becoming the 51st state. It’s not happening. The governor, senate and assembly would have to pass a law giving Transit Authority to NYC. Why would they do that? The MTA is by far the biggest unit of state government and Transit is the biggest part by far of the MTA. This is completely unlike NYC Schools, which never operated as part of state government and only served NYC residents. Corey might as well call for independence for NYC, it’s just as likely.

  • Joe R.

    While we’re fantasizing about things which are unlikely to happen, I think a better path for NYC would be to secede from NYS and the US, becoming a city-state like Singapore. Since NYC sends far more in taxes than it gets back in spending to the feds and NYC, this would allow NYC to have an overall lower tax burden, while still providing enough money to fund the city budget. Honestly, the idea makes too much sense, which is why it’ll never happen. The red states and suburbs of NYS would lose without NYC to bankroll them.

  • Hari Seldon

    It’s like taking a rubik’s cube from one monkey and giving it to another monkey to solve. The best case scenario, it won’t be solved, worst case scenario the monkey will through it in your face. It needs to be de-unionized forcefully, and then privatized. I know unions and all, but the system is broken here, and it needs radical changes.