MTA

Last week, the city's Independent Budget Office released a report on the MTA's revenue structure [PDF] which has been getting a bit of play. At Second Avenue Sagas, Ben Kabak focused on the report's main thesis: that the volatility of dedicated taxes and fees threatens the financial stability of the transit agency. Steven Higashide of the Tri-State Transportation Campaign picked out a graph showing that the recently enacted payroll mobility tax already makes up 30 percent of all dedicated revenues, or around one-eighth of all operating revenue.

Who's up for the challenge of managing the nation's biggest transit system at a time when state government has left it with a pile of debt and two already-scheduled fare hikes? The person who takes over the MTA from Jay Walder after his resignation takes effect October 21 will have the marquee transit job in the United States, but also perhaps the most difficult.

Can you spot the flaw in this excerpt from the New York Times' Saturday backgrounder on MTA chief Jay Walder’s pending departure for Hong Kong?

Jay Walder's surprise resignation announcement last week overshadowed some important news about the MTA's finances: The agency has identified $2 billion in savings in its capital program [PDF], which maintains and expands the transit system, but expects $1 billion less in federal assistance. That brings the total gap in the five-year, $26 billion capital plan to $9 billion that must be accounted for by the end of the year. This enormous deficit will define the political context in which Governor Andrew Cuomo chooses Walder's replacement.

In his relatively brief time at the helm of the MTA, Jay Walder earned widespread plaudits for introducing technological innovations while guiding the agency through increasingly perilous financial straits. His departure comes at a critical moment for the transit agency. With a $9 billion deficit facing the MTA's capital program at the end of this year, whoever replaces Walder will need political skill and technical expertise to spare transit riders another round of enormous fare hikes or service cuts. Even the most competent transit executive will have a hard time pulling it off, and leadership from the governor's office and the state legislature will be absolutely necessary.

After a two-year tenure during which he earned the praise of transit advocates as a skilled and innovative leader, MTA Chair Jay Walder has announced that he will step down effective October 21. Walder, who was appointed by governor David Paterson in July 2009 and took the CEO position that October, will be taking the reins of the MTR Corporation, a Hong Kong-based rail company.

Last week we wrote about how the looming $10 billion deficit in the MTA's capital plan could lead to a $3.00 fare and $137 monthly pass within three years. That's not the only way the transit authority could decide to respond to a lack of funding, however.

With each passing month, the MTA comes closer to the day of reckoning on its unfunded capital plan -- the maintenance work that keeps trains and buses running and the expansion projects that provide more access to the system. While the first two years of the 2010-2014 capital budget were funded, there is a $10 billion deficit in the remaining three. So far, there doesn't seem to be any plan from the city, state, or federal government to find this funding. In fact, between the State Senate's goal of repealing the MTA payroll tax and the House GOP's budget-slashing, there may be more obvious paths to the MTA losing revenue than gaining it.

It's sad because it's true.