Hochul’s Dilemmas On MTA Congestion Pricing, Fare Increases And Deficits

Governor Kathy Hochul recently said “The M.T.A. is the lifeblood. We will be focusing on ways to generate revenues with congestion pricing. That is back on track after a few hiccups with the federal government. We will have no fare increases planned, because we want people to come back to work.” (Source: “Questions for New York’s Candidates for Governor,” New York Times, Sunday, June 26) did not tell the whole story. Congestion pricing continues to be politically sensitive. Final details of who will pay has yet to be determined by the MTA Traffic Mobility Review Board.

Scott Rechler
(Photo courtesy or RXR Realty)

One year after becoming Governor, Hochul announced appointments to fill her five seats. This was made public at the July 27 MTA board meeting. They include Carl Weisbrod, a former city planning and economic development chief who will serve as Chairman of the MTA TMRB. He currently is employed with the consultant firm HR&A Advisors.
The other four appointees on the board are the former Real Estate Board of New York President John Banks, a past president of the New York Real Estate Board; Scott Rechler, Regional Plan Association chief and the head of developer RXR Realty; MTA Board Member Elizabeth Velez. She was a past chairperson of the New York Building Congress; and Kathryn Wylde, who heads the Partnership for New York City. This organization represents the city’s business community. No union, commuter or environmental advocacy group leaders were appointed.

Elected officials on all levels of government will lobby for discounts or exemptions for police officers, fire fighters, teachers, low income, New York City outer borough residency, seniors, physically disabled. small commercial delivery businesses, users of electric vehicles, residents living below 60th Street in Manhattan or other special niches. These discounts or exemptions will be adopted to placate their constituents when running for reelection in 2023 or 2024. More discounts translates to less revenues. Nobody can predict if anywhere near $1 billion in annual toll revenues will actually appear..
The MTA has scheduled virtual public hearings in August. For months, all of the MTA board and committee meetings held at MTA HQ, in Manhattan have been in person. Why not the same for these public hearings? .

In 2019, fare increases for the MTA NYC transit bus, subway and Staten Island Railway, along with Long Island and Metro North Rail Roads were part of the approval process for the $51 billion 2020-24 Five Year Capital Plan. Former Governor Andrew Cuomo, New York City Mayor Bill de Blasio, the State Legislature and City Council were all in on this financial arrangement. It included 4 percent increases in 2021 and 2023. Continuing to postpone fare increases will add to the MTA financial shortfall. Comptroller Tom DiNapoli just released a devastating report on MTA finances.

Hochul never comments on the ongoing fare evasion averaging several hundred million per year. The loss of farebox revenue due to two million pre-COVID-19 riders failing to return also adversely impacts the MTA budget. The MTA’s own updated McKinley consultants report indicated it will take many more years before ridership ever returns to pre-COVID-19 numbers.

Hochul has ignored the impact of inflation on the MTA. The price of both gasoline and diesel fuel has doubled. The engineers cost estimates for capital construction projects will have to be reevaluated for procurement contracts that will be advertised over the next 29 months remaining in the MTA $51 billion 2020-24 Five Year Capital Plan. The same also applies for the purchase of materials for routine maintenance and state of good repair in house track, signal and other projects performed by MTA employees. Future purchases of buses, subway and commuter rail cars may cost more. Vendors who bid on MTA material purchases and capital projects will inevitably pass on their own increased costs for materials including delivery costs

How will Hochul assist the MTA in making up for billions in previously anticipated congestion price tolling that may not appear until 2024 along with previously scheduled fare increase revenues?. Ditto for additional costs due to inflation, lost revenues due to ongoing fare evasion and upcoming union contracts? Labor will want salary increases that at a minimum keep pace with growing inflation.

Larry Penner is a transportation advocate, historian and writer, who previously worked for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island Rail Road, Metro North Rail Road, MTA Bus along with 30 other transit agencies in NY & NJ.

Larry Penner
Larry Penner is a transportation historian, advocate and writer who previously worked 31 years for the Federal Transit Administration Region 2 NY Office. This included the development, review, approval and oversight for grants supporting billions in capital projects and programs on behalf of the MTA, LIRR, Metro North, NYC Transit, NYC DOT, New Jersey Transit, NICE bus and 30 other NY and NJ transit operators. The opinions expressed are not necessarily those of the publisher or Anton Media Group.

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