It has been a few years since I downloaded and compiled mass transit finance data from the Federal Transit Administration’s National Transit Database, so I redid the analysis to see if anything had changed since 2012. Boy, it sure has. Between 2012 and 2013, based on that data, the reported operating cost of the New York City subway soared by 27.2% in just one year, an increase of more than $1 billion. There were no similar spikes among other major transit agencies in Metro New York. Suddenly the share of the subway’s operating costs that is covered by the fare is merely somewhat better than Metro North and the Long Island Railroad, instead of much, much better. And the wages and benefits of NYC subway workers, per hour worked, are the second highest behind PATH among major U.S. rail systems, instead of lower than those of NYC bus workers.
I’m not saying the figures for either year are false. In fact, as you’ll read, I have a possible explanation. But the new figures sure solve a lot of political problems. For TWU head John Samuelsen, who came out of the bus division and might have been catching heat from subway workers. For Governor Cuomo and suburban politicians, who might have been catching heat for the vastly higher level of subsidy for the suburbs. And for LIRR workers and their unions, who might have been concerned that featherbedding and graft would become more of a public issue, despite their control of – actually I’m not sure which politicians they control. But let’s take a look at what the data now shows, for 2015 and over the past 25 years. This post will cover operating costs, and the next one revenues.
The National Transit Database may be found here.
Click on “NTD Data” in the upper right box, and then “NTD Data Reports” to see the long list of spreadsheets available.
For 2012 and the years before, there were spreadsheets with ratios that allowed a reasonable comparison between transit systems. The operating cost per ride, per vehicle revenue hour, and per passenger mile, and the share of operating costs covered by the fare, for example. Tab through to the 2012 spreadsheets and check out the one identified as “Table 26,” for example. Matching up with other disappearing data about government, and President Trump’s tax returns, these ratios are either no longer there or are in a place where I can’t find them.
So I had to use the base data from multiple NTD spreadsheets to re-create the ratios. Thus it took me quite some time to create two spreadsheets, including this one with data, tables and charts for 2015.
With the table set to print out on five pages, landscape, although I don’t know what your spreadsheet program will do to it. Down the rows are large transit systems by type, including most of those in metro NY. To the left of the table are selected data items extracted from multiple NTD spreadsheets and matched by row (a possible source of error). The charts are for selected transit systems among metro New York – large ones elsewhere will be mentioned in the text when relevant.
The second spreadsheet has selected data for all years from 1991 to 2015 for the New York City Transit Subway, New York City Transit Bus, the Long Island Railroad, Metro North Railroad, PATH, New Jersey Transit Railroad, and New Jersey Transit bus.
With a few charts to show how things have changed over time. The data appears twice – with and without an adjustment for inflation. The charts are based on the inflation-adjusted data.
In both spreadsheets, “Read Me” and the “Data Dictionary” are as downloaded from the NTD spreadsheets. Note that in the table DO means “directly operated” by the organization’s employees, while PT means the service is contracted out “purchased transportation.” For contracted out services, data on employee hours and wages is often not available.
Comparing across transit modes, one needs to keep in mind that their varying characteristics makes them look better or worse from a cost perspective.
For example, the New York City subway moves at an average of 18.2 miles per hour, while the Metro North commuter rail trains move nearly twice as fast. This makes Metro North appear more cost efficient per passenger mile. But since the average subway ride is only 4.1 miles compared with an average of 27.3 miles on Metro North, the subway seems far more efficient per unlinked trip. New York City buses travel at just 7.1 (NYCT) or 8.6 (MTA Bus Company) miles per hour.
I believe the cost per revenue vehicle hour is the best comparison across modes, but even this fails to adjust for the different number of passengers different types of transit vehicles can carry. The per-hour cost of operating a Staten Island Ferry boat is huge, but so is the number of passengers for each vehicle. Meanwhile, the operating cost of a rail system includes the cost of maintaining its right of way and stations. For buses, that cost is borne by the separate government agency that maintains the streets – the Department of Transportation of the City of New York, for example.
Given these caveats, what do we find out about cost of mass transit in metro New York compared with other places?
The operating cost of the New York City Subway was $274.63 per vehicle revenue hour in 2015, far less than the $560.45 for the PATH Train, the $606.00 for the Long Island Railroad, the $558.30 for Metro North, and the $492.56 for New Jersey Transit rail. (However, New Jersey Transit workers had been long been working without a contract at the time, and the gap between their costs and the other commuter railroads may have closed). The Staten Island Railroad came in at $302.57.
Compared with other “heavy rail” (HR) systems, the operating cost per vehicle revenue hour for the New York City subway is pretty middle of the pack, more expensive than Chicago ($143.56), although perhaps only due to pension underfunding there, metro Boston ($251.00), though perhaps only due to lousy maintenance, Philadelphia ($214.25), and Atlanta ($254.72) but cheaper than Washington ($287.36), San Francisco’s BART ($302.00) and Los Angeles ($398.08). Most commuter rail (CR) service is contracted out. While expensive compared with similar metro New York operations, the Long Island Railroad is similar to the Bay Area’s Caltrain ($593.76) and the Los Angeles Metrolink ($610.33).
The overall operating cost per vehicle revenue hour is generally lower for local bus systems (MB) than for heavy rail systems. But the picture is different if the cost of maintaining the infrastructure and stations is excluded, and only the cost of maintaining and operating the vehicles is considered.
By this measure, the New York City subway operating cost per vehicle revenue hour is $148.72, compared with $144.13 for the Staten Island Railroad, and $265.63 for the PATH. That is still vastly lower than the LIRR ($403.02), Metro North ($323.10 and New Jersey Transit rail ($342.99), with their many conductors per train. But it is also lower than the $177.51 for New York City Transit buses and $164.89 for the MTA Bus Company (the former private bus companies taken over by NYCT in the 2000s). New York City Transit’s bus rapid transit (RB) program, Select Bus, had a cost of $133.17 per vehicle revenue hour.
Elsewhere around metro New York, taxpayers seem to catch a break by contracting out. Directly operated New Jersey Transit buses cost $124.37 per vehicle revenue hour, less than for New York City buses, but the contracted out New Jersey Transit buses cost just $57.35. The suburban counties all contract out their service, with Nassau Intercounty Express ($106.58), Westchester County Bee-Line System ($94.96), Suffolk County DPW ($90.17) and Transport of Rockland ($73.40). The cost per vehicle revenue hour of New York City’s bus system is also higher than that of any other large local bus system (MB) around the country. The San Francisco Municipal Railway buses, an agency infamous for absenteeism, and Boston’s buses come closest at $148.29 and $150.82 per vehicle revenue hour respectively.
For a few years before 2013, the total operating cost per vehicle revenue hour of the New York City subway including the cost of maintaining the infrastructure and stations was about the same as that of New York City transit buses. That was before New York City subway operating costs jumped by $1 billion in 2013. As a result, when adjusted for inflation and measured per vehicle revenue hour, the cost of the subway jumped from $205.60 in 2012 to $254.81 in 2013 before rising to $274.62 in 2015. The cost per vehicle revenue hour of the NYC subway was 53.1% higher in 2015 than it had been in 2005; the cost of New York City transit buses was 27.1% higher. The cost of the PATH was 67.5% higher, and the cost of New Jersey Transit rail was 18.9% higher. The cost per vehicle hour for the Long Island Railroad and Metro North, while high to begin with, changed relatively little from 2005 to 2015 after adjustment for inflation.
Recall that the pay of the median New York City worker has been falling after adjustment for inflation, as I showed here.
It is out of those falling incomes, and after paying for rising taxes and rising rents, that city residents get to spend what’s left on, among other things, increasingly costly and unreliable mass transit.
Aside from the subway, the general trend had been gradually falling costs through 1990s and then gradually rising costs since 2000. Metro North’s costs started out very high and have not changed much in long term sense since 2000. So what is going on? Here is my theory.
This chart shows the total operating cost of the New York City subway, adjusted for inflation, by function over time. In dark and light green are the total cost of operating and maintaining the subway cars. That cost fell in the late 1990s and has been increasing ever since, despite (according to a tip I got) a cutback in scheduled maintenance and whatever real productivity gains have been achieved. That is similar to the trend one sees among other New York area transit agencies.
I believe the reason has to do with pensions. New York State’s politicians used the 1990s stock market bubble as an excuse to reduce taxpayer contributions to the New York City and New York State pension plans during the late 1990s, and then retroactively increase benefits in 2000, as described here.
Pension contributions by employees plunged as a result, and pension benefit payments by NYCERS, the pension plan that includes New York City Transit workers, soared by 31.3% more than inflation over a few years.
Rather than have MTA taxpayer/farepayer pension contributions soar immediately to make up for this, the cost was deferred at the price of making it larger. Pension costs have been increasing by far more than inflation across all New York governments and agencies as a result ever since, with the total compensation of public employees increasing compared with that of the private sector workers who pay for it.
The big increase from 2012 to 2013, however, was in the “non-vehicle maintenance” (infrastructure and station) and “general administration” categories. Reported “general administration” costs increased by $360 million, nearly doubling in one year from $432 million to $792 million, and reported non-vehicle maintenance costs increased by $404 million, from $965 million to $1.369 billion. That is three quarters of the total cost increase. What happened?
Perhaps the National Transit Administration discovered New York City Transit’s “reimbursable expenditures” scam accounting policy, and demanded that at least for purposes of the National Transit Database, all operating costs be included.
“Reimbursable” operating expenditures were invented as a way to balance the budget in the deep early 1990s recession. Like many policies to raid the future in the desperate late Cuomo-Dinkins years, presumably thought to be temporary at the time, it continued through three economic booms. Basically the cost of operating transit service in an area where a capital program is going on was reclassified as “reimbursable” by the capital project – using borrowed money, and federal money. As were the cost of the whole engineering, telecommunications, and similar departments, and the cost of renting and outfitting 2 Broadway, the New York City Transit headquarters. In 2012, according to budget documents on the MTA website, New York City Transit had $883.5 million in “reimbursable expenditures.” Volia.
While National Transit Database reporting may have changed, the MTA is still paying for cash current workers with borrowed capital dollars to the tune of $1.25 billion in 2017. That’s 13.3% of total operating costs that year (page VI-138).
Can you imagine if New York City Transit had paid about $1 billion extra (in today’s money) out of taxes and fares for the past 25 years, and covered all operating expenses? More would have paid then, but less would have to be paid now, because of all the debt that would not have been incurred, and because those federal dollars would have gone further.
Now that we know why subway operating costs exploded, let’s compare transit agencies based on operating cost per passenger mile in 2015.
Even with the big increase from 2012 to 2013, and even though subway trains travel far fewer miles in an hour than commuter rail trains, the New York City subway’s cost per passenger mile, at $0.48 in 2015, was about the same as Metro North, at $0.49, and lower than the Long Island Railroad, at $0.58. New Jersey Transit was lower at $0.43. Among heavy rail systems the New York City subway was middle of the pack, higher than Chicago ($0.39), San Francisco’s Bart ($0.32), Philadephia’s SEPTA ($0.43) but lower than the Washington Metro ($0.62) and Los Angeles ($0.54). Among commuter rail systems, the Long Island Railroad’s cost was among the highest. It was exceeded by commuter rail in metro Boston ($0.60) and South Florida ($0.65) among others, both systems where the service is contracted out.
Given the slow pace at which they move, it is no surprise that New York City buses are very expensive on a per passenger mile basis, at $1.71 for New York City Transit and $1.73 for the MTA Bus Company. The only relatively large bus system with a higher cost is metro Pittsburgh, at $1.79. New York’s Select Bus is cheaper at $1.33, as are the express buses at $1.53. So are Nassau Intercounty Express at $0.74 and Westchester’s Bee Line at $0.90. The Staten Island Ferry costs $1.22 per passgenger mile. The real expensive service by this measure is New York City paratransit at $8.04 per passenger mile.
With some variations, notably for the Staten Island Railroad, the trend in operating cost per passenger mile is similar to the trend in operating cost per vehicle revenue hour. Generally down until sometime after 2000, and then up. For the New York City subway, the cost was $0.63 per passenger mile in 1993, falling to just $0.35 in 2000 as ridership boomed and pensions were underfunded, and then jumping from $0.37 in 2012 to $0.45 in 2013. Note that the National Transit Database operating cost data is not supposed to include interest on debts. As part of the MTA ledgerdemain, while some capital costs are really operating costs, some operating costs are actually interest payments on capital plan borrowing.
For New York City buses, meanwhile, falling ridership and ever-slower speeds have mean the cost per passenger mile has soared. For New York City Transit buses, the cost per vehicle revenue hour (adjusted for inflation) increased 27.1% from 2005 to 2015. The cost per passenger mile increased 52.6%. And the cost per unlinked trip increased 56.2%. Only the cost per vehicle revenue hour can be attributed to the cost of the workforce. To get the costs down by other measures would require either less service, matching the decrease in ridership, faster speeds, and/or more passengers.
That isn’t likely, given that the average length of a ride on a New York City bus is just 2 miles for New York City Transit and 3 miles for MTA Bus, and the buses more at just 7.1 and 8.55 miles per hour. A reasonably healthy adult, one who wanted to remain healthy, could easily ride a bicycle at 8 to 10 miles per hour, and cover those distances in 15 to 20 minutes. It would mean time spent outside, but no more and perhaps less than a bus rider would face walking to and from bus stops and waiting for the bus. The wait alone is often 15 to 20 minutes for the unlucky. And those willing to spend more now have ever more ride-sharing, car service app and outer-borough taxi services to choose from.
According to the FTA, the number of “unlinked trips” is “the number of passengers who board public transportation vehicles. Passengers are counted each time they board vehicles no matter how many vehicles they use to travel from their origin to their destination.” Including those transferring from one subway line to another, or one bus line to another. The cost per unlinked trip in 2015 was $3.58 for New York City Transit buses, $5.12 for MTA Bus Company buses, $2.39 for NYCT Select Bus – and a huge $69.52 for NYCT Paratransit. New York City express buses cost a whopping $18.79 per unlinked trip as well.
Paratransit costs more per trip in New York than in other places. Among the systems with the most ridership, the only other paratransit system with a cost of more than $50.00 per ride is New Jersey Transit, at $60.61 per ride. New York City Transit buses are middle of the pack by this measure, but Select Bus, at just $2.39 per trip, is low, presumably because the service is only present on heavily used lines. Measured per unlinked trip, meanwhile, the New York City subway cost $1.95 in 2015, compared with $5.85 for the Staten Island Railroad and $4.55 for the PATH. The only system with a lower cost per ride than the NYC subway was SEPTA at $1.87.
Still, the subway was a lot cheaper not long ago, according to data reported to the FTA. In today’s money, the cost of a subway ride fell from $2.97 in 1993, a time of much lower ridership off peak (though perhaps not much less service), to a low of $1.45 in 2007. It has soared since, jumping from $1.50 in 2012 to $1.82 in 2013 to the current $1.95. While the cost of a New York City bus ride was 56.2% higher in 2015 than it had been in 2005, after adjustment for inflation, the cost of a subway ride was just 6.8% higher, having fallen and then risen again. That is only because passengers are squeezing on the subway, offsetting the soaring cost per vehicle revenue hour, as service and maintenance were cut. The cost of a New Jersey Transit ride also fell per trip despite rising costs per vehicle hour, only because more passengers have been squeezed into less service with less maintenance.
While I last looked at National Transit Database data, the average cost of a New York City Subway worker was relatively low compared with other area transit agencies. Which made sense based on what I know from anecdotal evidence. That rail workers doing the exact same job – operating trains, serving as conductors, selling fare media in stations, maintaining the infrastructure – are paid more in cash on the LIRR, MetroNorth, New Jersey Transit and the PATH. Which would also lead to richer pensions, all else equal. And the large number of moderately paid station agents brought down the New York City subway average pay per worker, compared with New York City buses with their highly paid bus operators.
But the data for 2015 show something completely different. The combined wages, salaries and benefits of New York City subway workers totaled $82.60 per hour, compared with $69.81 for the LIRR, $76.08 for Metro North, $68.27 for New Jersey Transit, $62.68 for the Staten Island Ferry, $77.71 for New York City Transit bus, and $61.47 for MTA Bus.
The only rail system with a higher labor cost per work hour than the New York City subway was the PATH at $86.79. Among other major transit systems only San Francisco’s BART, at $78.02, and the San Francisco light rail system, at $74.22 come close. The only other local bus systems with a labor cost per hour over $60.00 are Seattle at $71.96, San Francisco at $63.12, and Oakland at $80.84 – all less than the New York City Transit buses.
If LIRR wages and benefits per hour are lower than for the New York City subway and Metro North, how come LIRR costs per vehicle hour are so much higher? Low productivity, featherbedding, work not done.
It isn’t so much the wages that were responsible for New York City Transit’s relatively high labor cost. The average wages and salary cost for a New York City subway worker was $41.55 per hour, which at 7 hours a day per and 220 days a year, works out to about $64,000. The cash wages per hour for Long Island Railroad and MetroNorth workers were similar at $38.59 and $41.45, with New Jersey Transit Rail at $36.43 (though with a long-expired contract) and the PATH at $49.59. BART was $42.85, but the averages for other rail systems were lower, typically around $30.00 per hour.
New York City Transit bus workers received $39.09 per hour in cash wages and salaries in 2015, also in the vicinity of $40.00, compared with $35.42 for the MTA Bus Company. Aside from high cost Seattle, $30.00 per hour seems about average for large urban bus systems elsewhere. Still, given the high cost of living in New York, the cash wages per hour for New York City transit workers don’t seem out of line. The cash wages of public employees seldom are, because everyone can see them.
What is out of line, and vastly more expensive than it once was, is the cost of employee benefits. The average New York City subway and workers had benefits whose costs nearly equaled their cash pay in 2015, at 98.8% of it. While per hour benefit costs equaled 60.0%, 70.0% or even 80.0% of wages and salaries for other major transit systems, few anywhere have benefit costs anywhere close to New York City Transit. Two systems where benefit costs are a higher percent of wages and salaries than for New York City Transit are Niagara Frontier in Buffalo (107.5%) and Centro in Syracuse (123.4%).
Other than the cost of pensions, it is for others to explain why New York City subway costs have soared, or if they were in fact under-reported in the past. What can be said based on National Transit Database data is that New York City’s per vehicle revenue hour subway operating costs have jumped, its per passenger mile bus costs have soared, and its per employee work hour they are higher than just about anywhere.
The next post will review data on revenues. But the data to be used in that post is already in the spreadsheets linked above.