December 16th, 2008 4 Minute Read Testimony by Hope Cohen

Testimony of Hope Cohen before the New York City Council

Thank you, Chairman Liu, Chairman Weprin, and members of the Council, for this opportunity to testify on the recommendations of the state's Commission on Metropolitan Transportation Authority Financing, led by Richard Ravitch, who saved our public transit network thirty years ago by convincing legislators, taxpayers, business leaders, and riders that all must share in the costs of building, rebuilding, and operating this system so vital to the region. I am Hope Cohen, Deputy Director of the Manhattan Institute's Center for Rethinking Development. Let me also note that I bring to my testimony the experience of eleven years at MTA New York City Transit, mainly in:

  • planning and budgeting for the capital program overall, as well as for individual capital projects
  • planning and project management for strategic investments in information technology and intelligent transportation systems.

The Ravitch Commission's report addresses a range of issues concerning MTA financing, management, and governance. Mazel tov on its sensible recommendation that fares rise predictably with inflation rather than spawning silly and counterproductive political battles year after year.

The report rightly identifies the "over-reliance on self-supported debt to fund its capital needs" as a structural burden on the MTA's operating budget and recommends as a general rule that "fares and current subsidies should pay for regular operating expenses, exclusive of new debt service [while] growth in capital expenses should be funded separately and exclusively."

Capital expenses really are the focus of the report—closing the gap in the current operating budget was an urgent addition to the Commission's mandate in recent months. The report recommends several long-overdue changes to reduce the costs and timeframes involved in managing capital projects (including streamlining the change-order process and limiting the ability of operating departments to delay accepting completed capital work). Perhaps it is the emphasis on the capital program that explains why the report does not recommend any operational efficiencies or discuss the long-term budget issues related to labor costs.

The Commission recommends two major new sources of revenue to support the MTA's capital program (and plug the operating budget hole this year only): a region-wide "mobility tax" on employer payrolls and tolls on the East and Harlem River bridges currently owned by New York City and operated without tolls.

Of all the items discussed in the report, this question of transferring ownership of these crossings to the MTA, which would impose tolls on them, is most likely to come before you in some way. As you did with congestion pricing earlier this year - a program designed to reduce traffic congestion, rationalize traffic patterns in Brooklyn and Queens, and raise funds for the MTA capital program—you should approve this proposal. It is unfortunate that your colleagues in Albany chose not to approve congestion pricing. We are now in essentially the same situation we were in March concerning capital funding—except that the hole is bigger and the state legislature passed up the $350 million head start the Feds wanted to give the city to provide transit alternatives for neighborhoods with the highest proportion of car commuters. Those transit options were a fine use of Federal funds. New Yorkers need them; now New Yorkers will end up paying for them.

It is time to return tolls to the Brooklyn, Manhattan, Williamsburg and Queensboro bridges. Yes, return tolls. Toll revenue helped finance the construction of the Brooklyn and Williamsburg bridges. These tolls were discontinued—along with those that existed on the Manhattan and Queensboro bridges—in 1911 by Mayor William J. Gaynor, who proposed making up the lost revenue through an annual tax levy. The result? These bridges - along with the others the city operates—compete for funding with all other municipal budget priorities. Over the years, the lack of a dedicated revenue stream has resulted in deferred maintenance and sometimes dangerous disrepair. These bridges are not "free" as they are so often portrayed; it's just that they are paid for in tax dollars, rusting metal, and crumbling stone, rather than by tolls.

Meanwhile, the MTA's tolled East River crossings (the Triborough Bridge and Queens-Midtown and Brooklyn-Battery tunnels)—and the Hudson River crossings, which are all tolled by the Port Authority—are in exemplary condition. Tolls yield enough revenue not only to maintain the facilities to the highest standards, but also to help subsidize the public transit operations of the MTA and Port Authority.

The first new toll revenue will be used to bring the MTA's newly acquired bridges up to the maintenance level of its existing inventory. After that, revenue would be used for the MTA capital program more generally—which, by the way, includes capital work on MTA bridges, which would now include all East and Harlem River crossings. As you've already heard today, it also includes signal-system upgrades, subway car and bus purchases, and much, much more.

Drivers who now cross the East and Harlem rivers without paying will not like the new tolls. But we all like having the buses, subways, and railroads—whether they bring employees and customers to our place of business, provide transportation to people who would otherwise worsen our traffic jams, or, yes, use them ourselves.


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