For as long as I can remember, I have heard in the media that the United States doesn’t spend enough on infrastructure. And for as long I as can remember, more and more money has been spent on other, more immediate priorities, even as federal, state and local government debts have risen.
On the other hand, I have come to see all such statements, by all interests, as essentially self-serving. “Studies” are produced by interest groups seeking more for themselves, and pretending that they will be paid for by money dropping out of the sky, not by having other people left with less, now or later. These are replicated by a media seeking an easy story.
So how much has the United States spent on infrastructure? How has this changed over time? And how does New York City, where the transportation infrastructure is smaller than it was 70 years ago as a result of the loss of the West Side Highway, and the 3rdAvenue and Myrtle elevated rapid transit lines, compare with the national average? Census of Governments data will be used to find out.
This is yet another post based on a tabulation of data from the U.S. Census of Governments. The first post, which explained where the data came from and how it was tabulated, is here.
This post, and the next one, are on infrastructure. One characteristic of infrastructure is that it is a long-lived, capital-intensive public service. So what is important is not really how much is spent on it in just one year, but rather how much is spent on it over the decades – expanding, maintaining, improving, and eventually replacing roads, rails, bridges, stations, control systems, power systems, communications systems and the like. And not just how much is spent, but how much value is received in return.
In late 2018 I used government finances data from the Census Bureau to compare 44 years of state and local government infrastructure construction expenditures through FY 2016 with the state and local government debt levels that year. The result of that analysis was reviewed in this post.
New York City’s 1982 to 2016 state and local government infrastructure construction expenditures averaged 1.09% of city residents’ personal income, slightly higher than the U.S. average of 1.08% of personal income. That still came to a deficiency of $30 billion dollars over the years, however. The Rest of New York averaged 1.27% of personal income, for a total deficiency of $16 billion.
But there is a dark side for New York to even this story. For the city, the merely typically insufficient infrastructure investment starting in 1982 came after two decades of massive disinvestment. Disinvestment that had left the city’s infrastructure a wreck, and subsequent reinvestment as the city recovered has not been nearly enough to catch up. Moreover, much of that investment was in water and sewer infrastructure as a result of projects mandated by the federal Environmental Protection Agency. So for transportation, the city’s gap compared with the already inadequate national average was far worse.
Then there is the question of how much in actual infrastructure was received in exchange for the infrastructure spending that New York has done in recent decades. Politically influential construction contractors, consultants and unions have worked the system to vastly inflate the cost of every thing that has been built and rebuilt, compared with anywhere else. Which means that far less investment has taken place than even the dollar figures would imply. A ride on the subway is enough to know what that has meant in reality.
This post uses 2017 Census of Governments data to examine transportation operating and capital expenditures together, and will include a brief update of that analysis as well.
The spreadsheet with the tables and charts used in this post is here.
Another characteristic of infrastructure is that its extent varies from place to place, in total, per person, and compared with the taxable value of property. I’ll provide a link to a Granola Shotgun blog post that explains this with pictures.
All across America local governments have become dependent on state and federal transfer funds to pay for things that used to be covered by local revenue. Those external funding sources are becoming increasingly unreliable. At a certain point locals are going to need to pay their own bills again – one way or another.
The federal and state money was used to build the suburbs, which are very expensive from an infrastructure point of view. This is a point also made by the Strong Towns movement.
The suburban development pattern has a massive amount of very expensive elongated public infrastructure compared to relatively skimpy taxable value. This is a monumental municipal money suck with no end in sight.
If you think commercial property and sales taxes will pay ever higher rates to plug the growing gap you don’t know chain retailers or manufacturers very well. They actually work the system to pay as little tax as possible while squeezing subsidies out of pro-business local governments and economic development programs. They’ll pick up and move in a heartbeat and leave behind a trail of empty concrete boxes on the side of the road.
Prior to the federally-subsidized building boom after WWII, communities were built in ways that require far less land and infrastructure to service the same population.
Here’s what the historic downtown looks like. From a municipal accounting standpoint there’s a small amount of public infrastructure serving a good deal of private taxable property. This is a financially stable arrangement.
People are even more spread out in rural areas, but aside from electric power and telecommunications – also extended to such areas with deep federal subsides paid for by city dwellers – they don’t require as much infrastructure.
This farm has its own private well and septic system. This form of land use requires almost no public infrastructure at all. It may rely on the adjacent county road, but if the county ran into serious financial difficulties and let this road revert to gravel the farm would continue on more or less unfazed (with a bit of pissing and moaning, of course.) A rural land use pattern is very cost effective. Taxes are low and so are government obligations.
Highways and streets are the public infrastructure everyplace has. So how much have state and local governments spent on them?
A table for all 50 states is here.
In FY 2017, U.S. states spent $6.47 per $1,000 of personal income on the Census Bureau’s Highways function, while local governments spent $4.39 on this function and on Parking. The Highways function also includes local streets and ferries. That’s a total of $10.86 per $1,000 of personal income, or 1.1% of the personal income of everyone in the country. Recall that the average state and local government tax burden has been around 10.0% of income.
State governments spending in this category is generally on major highways, while local government spending is on local streets. According to the U.S. Department of Transportation…
IN 2018 there were about 4.2 million miles of public roads in the United States, with 29.3% classified as urban and 70.7% classified as rural. Within urban areas, 70.9% of the mileage consisted of local roads, generally paid for by local governments with local property taxes. Within rural areas, local roads accounted for 68.5% of the total. The most expensive roads to build and maintain, and the most heavily used, are grade-separated, limited access highways. These accounted for 2.6% of the urban mileage, and 1.2% of the rural mileage.
Many of the states with the highest state and local government Highways spending in FY 2017 per $1,000 of state residents’ personal income were among those with the lowest population density. These include North Dakota at $43.87 per $1,000 of state residents’ personal income, Alaska at $33.65, Wyoming at $27.51, and South Dakota at $23.28. High spending states also included Delaware ($21.30), where a major limited access highway was under construction that year, Wisconsin ($19.43), where a major new highway interchange was being built, Vermont ($19.40) and Iowa ($18.55).
New York State ranked 42ndamong states at just $8.84 in state and local government spending on Highways, Streets, Ferries and Parking in FY 2017, but only because of New York City. The city, which also maintains the federal and state highways within its boundaries with state aid money, spent just $5.30 per $1,000 of city residents personal income on this function, which would have ranked dead last if the city was a separate state. The rest of New York State stood at $12.10, just 34thamong states but still above the U.S. average of $10.86. That’s because most U.S. personal income is concentrated in a small number of highly populated urban states, where Highways spending is lower as a share of that income. Spending is also low in some low-tax and slow-growth states.
The actual last place among states was held by California at a mere $6.77 spent per $1,000 of state residents’ personal income. Other states below the U.S. average include Rhode Island ($8.11), Indiana ($8.13), Massachusetts ($8.28), Connecticut ($9.00), New Jersey ($9.86), Maryland ($9.40), Georgia ($9.40), Michigan ($9.45), New Hampshire ($9.75), and Washington ($9.82).
While many of these are slow-growth states, Georgia’s population increased rapidly until recently, and in an auto-dependent pattern. It received the tax benefit of the growth but apparently didn’t absorb the cost of the related Highways spending. That is a Red State version of New York City promising the Second Avenue Subway in the 1950s, floating a bond to pay for it twice, getting the property tax revenues from a high-rise development boom on the Upper East Side, but then diverting the money and not actually building the subway – until just three stations were added in the 2010s. No wonder no new buildings were added on the Far West Side of Manhattan until the promised Flushing Line subway extension was nearly finished. Metro Atlanta’s traffic is among the nation’s worst.
Just based on local government Highways, Street, Ferry and Parking expenditures alone, the $5.30 for New York City in FY 2017 was above the U.S. average of $4.39. This is not only because the City of New York’s expenditures include what would be classified as state government expenditures elsewhere, but also because as a city of islands, it operates a large number of major bridges that are expensive to maintain. NYC expenditures, in this tabulation, include all of the spending by the Triborough Bridge and Tunnel Authority, and half of the Highways expenditures by the Port Authority of New York and New Jersey, with other half assigned to New Jersey. They also include the city’s ferry system.
The highest local government spending area of the state was the rural Rest of New York State counties at $11.15 per $1,000 of personal income. That compares with the $7.89 spent by local governments in Vermont, the $5.15 in Maine, and the $3.88 in New Hampshire. Maine and Vermont, however, have higher state Highways expenditures per $1,000 of personal income than the portion of New York State outside New York City. Adding in an allocation of state government expenditures puts the rural Rest of New York at $18.10 spent per $1,000 of personal income, compared with $15.94 in Maine and $19.40 in Vermont, but just $9.75 in New Hampshire.
New York City’s local government Highway, Street, Ferry and Parking expenditures were also higher in FY 2017, per $1,000 of city residents’ personal income, than most of the counties containing the nation’s largest and most prominent cities, and other older central cities. The $5.30 for NYC compares with $3.20 for Los Angeles County, $3.46 for San Francisco, $4.13 for Cook County (Chicago), $4.32 for Philadelphia, $2.99 for Dallas County, and $3.67 for Harris County (Houston). The District of Columbia, a place where the local government also does what would be state government Highways work elsewhere, was higher than NYC at $8.82.
As noted in prior posts, only about half of the expenditures on New York City’s Police Protection, Fire Protection, and Corrections functions are captured as such by the Census of Governments, because pension contributions are not counted at all, other benefits are lumped into General and Unallocated Expenditures Not Elsewhere Classified (code E89), and interest payments are lumped into General Interest on Debt (I89). For most of the rest of the city agencies, however, retirement benefits are less rich, and more money is spent on contracts with outside parties such as construction contractors, all of which is captured by the Census of Governments. A total of 67.6% of the other agencies, as a group, — including the city’s Department of Transportation — are assigned to individual functions by this data. If anything the figure would be higher for the DOT.
High incomes and recently-built roads and streets depress spending on the Highways function in affluent suburban counties around the country. Most have not yet reached the point where their infrastructure will need to be rebuilt, the way New York City’s urban infrastructure has been partially rebuilt over the past 40 years, but they approaching it. The result will be deterioration or added costs, as in the cities after 1960.
Local governments in New York’s Downstate Suburbs spent $3.18 spent per $1,000 of their residents’ personal income on Highways and Streets in FY 2017, less than the national average of $4.39, less than the $3.45 for Orange County and $3.33 in San Diego County in California, and less than the $4.21 in Monmouth County in New Jersey. But otherwise, the Downstate Suburbs spent more on average than any of the other affluent suburban counties I chose for comparison. Among New York’s Downstate Suburbs, the highest Highway and Street spending per $1,000 of county residents’ personal income was in exurban Putnam County $5.61, and the lowest was in affluent Westchester County, which includes the cities of Yonkers, Mount Vernon, New Rochelle and White Plains, at $1.84 – less than half the U.S. average.
As noted, limited-access, grade-separated highways are the most expensive type to build and maintain, and carry the most traffic. Metro New York’s network of such highways has a feature that is unique in the United States – a large share of this very expensive, scarce and valuable resource is off limits to freight, other commercial and service vehicles, and mass transit (buses).
This map doesn’t even capture all of it, because it excludes the Palisades Interstate Parkway and Garden State Parkway in New Jersey, the Merritt Parkway in southwest Connecticut, and Playland Parkway in Westchester, along with the large number of major New York City streets that are off limits to trucks and buses, including Eastern Parkway and Ocean Parkway in Brooklyn and parts of Park Avenue in Manhattan.
A few “national parkways’ were built in the 1930s, when New Yorker and father of the Taconic Parkway Franklin Roosevelt was President, but otherwise only New York has so much transportation capacity reserved for the exclusive use of private passenger vehicles. Among other things, this means the freight network in Brooklyn is very constricted, and in large part located on local streets.
Like major cities, many of the Upstate Urban Counties have aging roads and streets in need of repair, replacement or removal, a situation suburbs across the country will be in soon. At $5.09 per $1,000 of area residents’ personal income in FY 2017, local government Highways and Street spending in the Upstate Urban Counties were above the U.S. average of $4.39, with high snow levels adding to the cost. That was also above the average for most of the Rustbelt urban counties chosen for comparison.
Stagnant incomes and populations Upstate are adding to the burden of maintaining and rebuilding a highway system built long ago with federal money, as Granola Shotgun predicted. In Onondaga County (Syracuse), where local governments spent $6.17 per $1,000 of state residents’ personal income on Highways and Streets in FY 2017, a deteriorating elevated stetch of I-81 through downtown will be removed, like the West Side Highway in New York City in the 1970s, with the traffic diverted around the city.
Similar removals have taken place in Downtown Milwaukee, downtown Providence, Rhode Island, and in San Francisco, after the 1989 earthquake damaged another elevated highway.
In Metro Rochester, the lightly trafficked Ontario State Parkway is deteriorating and has been closed during the winter to save money on snow clearance.
Monroe County (Rochester) local governments spent $4.38 per $1,000 of county residents’ personal income on Highways and Streets in FY 2017.
Niagara County local governments spent $9.22 per $1,000 of county residents’ personal income on Highways and Streets in FY 2017. The portion of the Robert Moses State Parkway through the city was being removed at the time.
Comparing three Census of Governments years, the data shows that state government Highways expenditures per $1,000 of personal income fell 12.1% from FY 2007 to FY 2017, as pension costs increased and federal assistance fell with the ascendance of the Tea Party in Washington. The decrease was 22.5% for New York State and 5.6% for New Jersey and Connecticut, after previous decreases from FY 1997 to FY 2017. There were also big decreases in Michigan (-29.7%) and California (23.5%). Massachusetts has a 22.5% increase, but still spent less per $1,000 of state residents’ personal income than it did in FY 1997, when the “Big Dig” was going on in Downtown Boston.
At the local government level, from FY 2007 to FY 2017 there was an 8.8% decrease in U.S. Highway, Street, Ferry and Parking Expenditures per $1,000 of personal income. The decrease was 5.2% for New York City, 17.6% for the Downstate Suburbs, 9.6% in and Upstate Rural counties. There was a 6.6% increase in Upstate Urban Counties, along with a 14.6% increase in New Jersey and 13.7% in Connecticut. Highway and Street expenditures per $1,000 of personal income fell by 21.2% in Los Angeles County, 27.8% in Cook County. There were increases in some major urban counties that saw large decrease from FY 1997 to FY 2007.
In Metro New York the airports and seaports are operated by the Port Authority of New York and New Jersey, classified as a New York City local government by the U.S. Census Bureau. I used a rough allocation to allocate some of those expenditures to New Jersey. These airports and seaports are operated mostly by private companies under contract. New York, therefore, shows very little local government employment for these functions, but the expenditures do show up in the Census of Governments finances data.
In other places, state governments operate airports and seaports. That may be the reason why the Census of Governments shows no Air Transportation Expenditures in Albany County. Elsewhere, I was able to include state government expenditures in these totals.
Nationwide, state and local governments spent $1.56 per $1,000 of personal income on Air Transportation, and $0.38 on Sea and Inland Port Facilities. New York City’s Air Transportation expenditures equaled $2.54 per $1,000 of city residents’ personal income, compared with just $0.32 for the rest of the state. Among states, only Alaska ($8.96), Florida ($2.99), Hawaii ($6.94), North Dakota ($2.75), Utah ($2.96), and Wyoming ($2.95) spent more than NYC. But NYC’s airports serve the entire metro area, and if its Air Transportation expenditures were divided by the personal income of that entire area, NYC would rank much lower.
New Jersey’s Air Transportation expenditures, at $0.97 per $1,000 of personal income, were below the U.S. average of $1.56, but its Sea and Inland Port expenditures, at $0.40, were slightly above the U.S. average of $0.38. California, at $0.62 per $1,000 of personal income, was also above the U.S. average in Sea and Inland Port expenditures, as were Alaska at $3.70, South Carolina at $1.76, Louisiana at $1.61, Washington at $1.32, and Virginia at $1.27. The Port of Virginia is the third most active for containers on the East Coast, behind New York-New Jersey and Savannah.
By tonnage the largest U.S. ports are Houston, due the petrochemical industry there, and those in Louisiana at the mouth of the Mississippi, where bulk products are transferred to and from barges.
The State of New York spent $59 million in Air Transportation in FY 2017. Part of that is probably spending on Albany and Buffalo airports. If divided by per the combined personal income of residents of Albany and Erie (Buffalo) counties alone, that equals $0.92 per $1,000 of county residents’ personal income, or more than the level of expenditure in Monroe County (Rochester) at $0.66, Onondaga County (Syracuse) at $0.72, Westchester County at $0.65, and Suffolk County at $0.19. Albany County is the only area of New York State with significant local government Sea and Inland Port expenditures.
The State of New York also had $30.1 million in Sea and Inland Port expenditures in FY 2017, at $10.9 million in revenues, presumably from the canal system. This was not allocated among different parts of the state in this tabulation. The expenditures equal $8.50 per $1,000 of the personal income of all state residents. What to do with the canals is a difficult issue for the state. They are a stranded asset that became obsolete for its original use when the St. Lawrence Seaway was built in the 1950s, but it would cost huge money to replace if allowed to deteriorate, and old canals get far more recreational use in Europe.
New York’s airports, on the other hand, have been used as cash cows to help fund the Port Authority Trans Hudson rapid transit line, the Port Authority Bus Terminal. And more recently the Port-Newark Elizabeth, which now also loses money, with $286.6 million in charges and $279.1 million of expenditures in FY 2017 according to the Census of Governments, but interest and pension costs on top of that. Thanks to the coronavirus, however, those airports may also start to lose money just as a costly investment as made in them. LaGuardia and JFK airports are being rebuilt for the second time within a few decades. The State of New York, meanwhile, has invested extensive money in Upstate airports despite the stagnant population here.
These Air Transportation deficits may become another burden on the general tax base, like the Erie Canal, if airport revenues don’t revive, and if the revenue bonds are not defaulted on.
Compared with the counties containing the nation’s largest and most prominent cities, New York City’s Air Transportation expenditures per $1,000 in county residents’ personal income are not really high. The $2.54 for NYC compares with $3.19 in Los Angeles County, $10.33 in San Francisco, $13.49 in Denver County, $6.32 in Miami-Dade County, $8.07 in Fulton County (Atlanta), $4.17 in Cook County (Chicago), $4.74 in Philadelphia, and $7.07 in Dallas County, all the locations of major airports serving broader regions. These areas will face even greater strains than NYC if airport revenues do not recover.
The only clear trend in Air Transportation and Sea and Inland Port Transportation over 20 years is down in Connecticut, where that data shows a major state government construction project in the latter category increased spending in FY 1997. In New York, the LaGuardia Airport renovation broke ground in FY 2016 and was under construction during the 2017 Census of Governments.
A JFK airport renovation was expected to get underway this year.
The cost of this revamp has gone up from the $10 billion estimate that accompanied the first announcement about the redevelopment in early 2017 to the current estimate of $13 billion. The announcement is accompanied by several new renderings of the overhaul that really give a sense of the massive scale of this project.
We can only hope that the Port Authority and the airlines are smart enough to defer this project, and have not yet torn up too much of the existing airport, which was already fine following an earlier renovation just 20 years ago, when the Airtrain, Terminal 1 and Terminal 8 were built.
Metro New York is unique not only in having a large share of its limited access highway network limited to private passenger vehicles, but also in having the nation’s largest rail transit network (both urban metro and commuter rail) and the nation’s highest mass transit ridership. Government spending on mass transit not only substitutes for government spending on roads, by reducing the need for pavement and parking per trip, but more importantly also substitutes for personal spending on vehicles.
According to Consumer Expenditures survey data from the Bureau of Labor Statistics:
In 2018 the average U.S. household had 1.3 income earners — and 1.9 vehicles. With bicycle transportation still a small factor in this country, those in the lowest decile of income had an average of 0.5 earners, but still had an average of nearly one vehicle each. The primary transportation mode of most poor households in the United States is an old, bad, used motor vehicle. Nationally, those at every decile of income had more vehicles than earners on average. But in metro New York, the average household had 1.3 earners but just 1.2 vehicles.
The average U.S. household spent $8,943 on vehicle purchases, insurance, finance charges, maintenance, repair, and gasoline and oil in 2018, according to the Consumer Expenditure Survey. The cost of parking those vehicles, typically included with the cost of housing and the cost of goods and services purchased in places where one parked, would be in addition.
Dividing the $183.2 billion by U.S. state and local governments on Highway, Street, Ferry and Parking in FY 2017 by the number of consumer units as measured by the Consumer Expenditure Survey, one comes up with a public infrastructure cost of $1,394 each, in addition to the $8,943 in personal cost.
The average consumer-unit in metro New York spent $6,679 on their own vehicles, for a savings of $2,264 each compared with the U.S. average, for a total of $35.2 billion saved per year.
The average U.S. consumer unit spent 11.4% of their pre-tax income on vehicles. Those in the lowest decline income spent an average of 55.8% of their income on vehicles. Most of the spending of the poorest is not financed by income, but rather by government payments. But even those in the second, third and fourth deciles of income spent an average of around 20.0% of their income on vehicles. All but the richest 10 percent of U.S. consumer units spent an average of 10.0% or more of their income on vehicles.
But the average consumer unit in Metro New York spent just 6.6% of their income on vehicles, a savings of 4.8% of income compared with the U.S. average. That is a savings of nearly $4,800 per consumer unit in metro New York, for a total of $35.2 billion saved.
Within metro New York those savings are concentrated in New York City, and probably in other older urban centers elsewhere in the region. According to the 2017 American Community Survey, just 8.6% of U.S. households had no vehicles, compared with 55.0% of those in New York City. Just 8.4% of the households the rest of the MTA service area in New York State had no vehicles, less than the U.S. average, compared with 11.2% in New Jersey and 7.7% in Fairfield County, Connecticut.
An additional 31.5% of New York City households had just one vehicle, for a total of 86.5% of New York City households with zero or one. That compares with 41.2% for the U.S., 38.2% for the rest of the MTA service area, 44.8% for New Jersey, and 38.1% for Fairfield County.
Moreover, the transit network allows vehicle owners throughout the Tri-State are to use them less, reducing their cost. For many New York City households with vehicles, they are only used for recreational trips out of town, not for daily travel to work, school, convenience shopping and services. In the suburbs, many drive their “station car” no farther than the nearest commuter rail or bus station, a role that could be easily replaced at a far lower vehicle and parking cost by e-bikes in the near future.
ACS data for 2017 shows just 61.2% of employed residents of the portion of the MTA service area outside Manhattan drove alone to work, compared with the national average of 76.4%, and 22.7% used public transit, compared with a national average of just 5.0%. Transit use was also above the U.S. average in Fairfield County (10.0%), and New Jersey (11.8%). Meanwhile, just 22.3% of New York City residents drove alone to work. Many of these are presumably in the public sector, where workers have parking on city streets reserved for them alone, and expect better for themselves than public transit (hospitals, housing, etc).
If one could flip this data around by place of work, rather than place of residence, one would find that the destination for most rail transit trips in metro New York was Manhattan, and adjacent satellite centers such as Downtown Brooklyn, Long Island City, the Hub in the Bronx, and the Jersey City and Hoboken waterfront. There is no way the concentration of activity in these areas could be achieved without rail transit. According to Hub Bound data from the New York Metropolitan Transportation Council,
Rail modes accounted for 66.8% of all persons entering and leaving the Manhattan Central Business District on a fall business day in 2017, with buses accounting for another 7.2%. Just 23.5% arrived by other motor vehicles. During the peak period of 7am to 10am, the share for of arriving passengers who used auto, taxi, van and truck was just 10.9%. The share was 63.7% for the subway and 13.8% for other rail, for a total of 77.5% for rail.
And given that the concentration of activity and talent in this small area is the primary economic asset of New York and New Jersey, it is inconceivable that these states could continue to prosper without a robust and appealing rail transit system. Those who have disinvested in that system, or encumbered it financially by putting less in or sucking more out, whether elected officials, union leaders, contractors, those advocating to shift spending to other things, or otherwise, have been working to ensure the economic decline of metro New York and the fiscal collapse of New York State.
According to Census of Governments data for FY 2017, meanwhile, Mass Transit expenditures totaled $21.24 per $1,000 of city residents’ personal income in NYC, $11.89 in the Downstate Suburbs, $6.41 in New Jersey, and $7.02 in Fairfield County, Connecticut.
Compared with the 4.8% of pre-tax income saved on personal spending on private vehicles in Metro New York, according to the Consumer Expenditure Survey, you had extra fare, tax, toll and other money spent on Mass Transit at 2.1% of personal income in NYC, 1.1% of personal income in the Downstate Suburbs, 0.6% in New Jersey, and 0.7% in Fairfield County. It is fair to assume that like Mass Transit spending, the personal vehicle costs avoided are greater in New York City than in other parts of the metro area.
Compared with the $35.2 billion saved on vehicles in Metro New York according to the Consumer Expenditure Survey, the combined Mass Transit expenditures of the entire states of New York, New Jersey and Connecticut, not including interest, totaled $23.6 billion in FY 2017, according to the Census of Governments. The CES vehicle expenditures are personal costs only, and do not include the additional public cost of the roads, and hidden cost of the parking, let alone the costs of congestion and air pollution.
The Upstate Urban Counties, at $3.78 spent on Mass Transit per $1,000 of area residents’ personal income, were below the U.S. average of $4.41. So, not surprisingly, are the Upstate Rural counties, at $0.36 on average. Adding up local government Highway and Street expenditures, and Mass Transit expenditures, one gets $8.80 spent per $1,000 of personal income for the U.S. average, $8.88 for the Upstate Urban Counties, and $11.51 for the Upstate Rural Counties.
This Mass Transit data for parts of New York State outside New York City, and Fairfield County and the Rest of Connecticut, is based on an allocation, since nearly all of it is counted as state government in the Census of Governments, as explained in the first post in this series.
The New York City Mass Transit figures do not include interest on debt, but do include pensions and other employee benefits, perhaps because New York City Transit is a separate agency and part of the MTA. As is the case for the schools, everything is being tabulated.
For Code I89, Transit Utilities, interest on debt, the Census of Governments records $209 million for New York City and $1.1 billion for New York State, for a total of $1.33 billion. The MTA Budget shows $1.8 billion in debt service expenditures, including repayment of principal. All state and local governments in the United States had just $2.86 billion for code I89 in FY 2017, with New York State accounting for 46.3% of it.
New York City’s $21.24 in Mass Transit expenditures per $1,000 of city residents’ personal income towers above the U.S. average of $4.41. Even the $7.73 for the rest of New York State combined, however, exceeds the statewide averages for Massachusetts ($6.94), Washington State ($6.61), California ($6.58), New Jersey ($6.41), Connecticut, including an allocated part of Metro North ($6.13), and Illinois ($6.17). Only the District of Columbia is higher.
New York City’s $21.24 in Mass Transit expenditures per $1,000 of city residents’ personal income also exceeds the spending level per $1,000 of personal income in other major urban counties around the country. San Francisco, a veritable museum of every type of mass transit vehicle ever used other than the stagecoach and horsecar, comes next at $20.96, followed by Cook County (Chicago) at $12.90. Los Angeles County ($10.38) and the District of Columbia ($10.82) are the only other counties over $10.00 by this measure. Although for Philadelphia, comparing SEPTA’s expenditures with the personal income of the entire metro area, as I did in this calculation, may understate the level of Mass Transit spending, compared with personal income, within the city itself. The same may be said of Suffolk County (Boston) and the state agency the MBTA.
The Upstate Urban Counties, with $3.78 spent on Mass Transit per $1,000 of their residents’ personal income, do not stand out compared with other urban Rustbelt counties containing mid-sized cities. Alleghany County (Pittsburgh) was highest among these in FY 2017, at $6.65. The below average spending in Upstate urban counties, however, did not prevent the Capital District Transportation Authority from being named the best mid-sized transit system in North America for FY 2017.
I can tell you from experience that its buses are far more pleasant to ride than any transit vehicles in New York City, and although they are not frequent, they move quickly once you get on. This despite the fact that, again based on personal experience and observation, I was the only rider who was not poor.
Meanwhile, also during FY 2017 during the time of the 2017 Census of Governments, service was so bad on the New York City subway that a state of emergency was declared.
New York Governor Andrew Cuomo has declared an MTA state of emergency amid rising delays and unreliable service across the city’s subways and commuter rail lines. Cuomo has ordered new MTA Chairman Joe Lhota to come up with a reorganization plan in 30 days, and to assess all capital needs — including cars, tracks, signals — within 60 days. The state of emergency declaration will expedite procurement and cuts red tape during the series of urgent reviews.
In addition to declaring the MTA state of emergency, Cuomo is adding $1 billion to the MTA capital plan for next year, he says. It marks a drastic about-face from two years ago, when he described the MTA’s capital request as “bloated.” The state of the subway system “is wholly unacceptable,” said Cuomo, citing decades of underinvestment, deferred maintenance and surging ridership.
New York City’s Mass Transit operating plus capital expenditures, however, had risen from $16.65 per $1,000 of city residents’ personal income in FY 1997 to $17.65 in FY 2007 to $21.24 in FY 2017, when the “state of emergency” was declared. Spending was up even excluding the MTA’s soaring debt service expenditures, a function of paying for past ongoing normal replacement and some operating costs with debt rather than current revenues.
The U.S. average, while remaining much lower, increased as well, from $3.62 per $1,000 of personal income in FY 1997 to $3.89 in FY 2007 to $4.41 in FY 2017. The evidence suggests that Millennials greater propensity to used public transit was reflected in budget decisions, once the economy improved and the drastic cuts of the Great Recession were reversed. Except that it is possible that much of the increase went to the retired, not to capital investment or those operating transit vehicles today.
For some other Northeastern states, however, there were reductions. In New Jersey from $6.50 in Mass Transit expenditures per $1,000 of state residents’ personal income in FY 1997 to just $5.56 in FY 2007, before a partial recovery to $6.41 in FY 2017. Former Governor Christie has slashed spending on New Jersey Transit because the state’s future transportation trust fund revenues were all going to past debts, and he didn’t want to increase the state’s gas tax. The result was a service collapse similar to what happened on the subway.
New Jersey Transit, under state and federal inquiry for violating safety rules and operating protocols, logged the most accidents last year among the 10 biggest U.S. commuter railroads, federal records show.
The 21 accidents disclosed online by the Federal Railroad Administration on March 1 were more than double those involving the Long Island Rail Road, the nation’s largest passenger-train service. New Jersey Transit also had the most mechanical breakdowns in 2015, the most recent data available.
The agency, the nation’s third-largest public-transportation system, has struggled to turn around operations as ridership increases, but public funding does not. After years of diverting capital-project money to cover day-to-day costs, New Jersey Transit is strapped. Its woes have forced rail commuters to pay higher fares while suffering increased delays and crowding.
For the Downstate Suburbs, Mass Transit expenditures soared from $9.84 per $1,000 of area residents’ personal income in FY 1997 to $13.63 in FY 2007, nearly as much as in New York City, before falling back to $11.89 in FY 2017. Much of the additional money was for the East Side Access project for Long Island Railroad, a project that has yet to be finished and provide any benefit to the riding public.
The cost had soared past $11 billion as of two years ago.
The tunnel East Side Access will use was completed in the early 1970s.
Mass Transit expenditures in metro Philadelphia fell from $8.66 per $1,000 of city residents’ personal income in FY 1997 to just $6.77 in FY 2007 before recovering to $7.40 in FY 2017. In metro Boston, Mass Transit expenditures fell from $9.11 per $1,000 of personal income in FY 1997 to $7.25 in FY 2007 before rebounding to $8.97 in FY 2017. And much of the spending Massachusetts and done on the MBTA in recent decades had gone to expand commuter rail, while the city of Boston’s rail system was left to rot until it collapsed. The head of the city portion of the transit system then resigned.
Scott cited breakdowns in aging equipment used by the nation’s oldest public transit system, pointing to dozens of trains that became disabled during the most recent storm that dropped more than 2 feet of snow on parts of the Boston area. Boston’s subway system debuted in 1897, the first in the nation.
Why had New York City’s transit system collapsed despite rising expenditures, while other places where transit service collapsed had falling expenditures? Part of the reason is more and more money going to retired transit workers, and raises for transit workers in excess of what transit riders received. Even capital expenditures have bought less and less as costs soared, because money was diverted to the pension plans for New York’s construction unions, as I discussed here.
Although a 2005 strike intended to force transit riders to pay for a full pension at age 50 after just 20 years of work, rather than the retirement at 55 after 25 years of work that had been promised, was unsuccessful…
Transit workers did benefit from a big increase in benefit payments in 2000, and the elimination of most of their own contributions to their own pensions, from that point on, like other New York City workers. The cost of this was lied about, hidden and deferred until it exploded.
One can find a more detailed analysis of trends in Mass Transit finance, based on data from the National Transit database, here.
Then there is the fact that transportation infrastructure investments are cumulative, as mentioned at the top. The transit system is diminished today due to cumulative impact of decisions made over the decades.
To the extent that elected officials have been willing to fund the MTA Capital Plan, they have emphasized the replacement of buses, subway cars and rail cars, which passengers get to see quickly while a given set of politicians are around to take credit. And if the money to pay for them is borrowed, and they don’t have to take the blame for the cost, all the better.
What New York politicians have tried to avoid spending on is the maintenance and ongoing replacement of the basic infrastructure. Updating a chart from the Sold Out Futures by State analysis…
One finds that New York City’s state and local government capital construction expenditures on transportation infrastructure, per $1,000 of city residents’ personal income, were below the U.S. average almost every year from FY 1982 to FY 2008, while such expenditures were above average in the Rest of New York State. And while NYC infrastructure capital construction expenditures increased after Governor Andrew Cuomo took office, much of the increase was on roads and airports, not the subway system. Add to that the fact that New York City got such poor value for the capital money that was spent on the subway…
All to benefit private sector construction companies and unions and their retirees in Florida, and no wonder service collapsed.
New Yorkers understand how important the transportation system is to their long-term economic well-being, and have been willing to pay. Over and over they have agreed to additional taxes, higher tolls and fees – and higher fares – with the promise that the revenues would only be used for transportation.
Some of the profits from the bridges and tunnels of the Port Authority of New York and New Jersey were used support the Port Authority Trans Hudson rail transit system and the Port Authority Bus Terminal starting in the early 1960s. Toll surpluses from what had been New York City’s Triborough Bridge and Tunnel authority were used to support mass transit, at first mostly in the city but recently mostly outside it, once the Metropolitan Transportation Authority was formed in 1968. “Dedicated” MTA taxes were added on sales, real estate transactions, and utility charges around 1980. A substantial share of New York’s federal transportation aid has gone to Mass Transit. A $1 per ticket charge at the region’s airports was added in the mid-1990s for an airport to downtown mass transit network. Recently another “dedicated” 1/8 percent MTA tax on sales was added in the 2000s, and a ¼ percent tax on payroll and self-employment income was added in the 2010s. And tolls on the remaining Manhattan vehicular crossings that are currently free are proposed to be added in the 2020s.
On the motor vehicle side, on the other hand, tolls and gas taxes were repeatedly frozen from the 1990s through the 2000s even as the regional road system was rebuilt at a high cost. Some tolls were removed.
Other motor-vehicle-related revenues, however, including the sales taxes on the vehicles and their fuels and tolls, were promised to be used for “dedicated” trust funds for roads and bridges, in New York, New Jersey and Connecticut. But much of this money was repeatedly bonded against to pay for past construction as motorists paid less after adjustment for inflation. And some of it was diverted to other purposes. Including gas taxes at the federal level during the Clinton Administration. And New York State Thruway Authority tolls, after the State of New York “sold” the Thruway to the Thruway Authority to close a budget deficit in the early 2000s.
In FY 2017, state government tolls, motor vehicle and fuel tax and license charges equaled 86.8% of New York State Highways expenditures, not including interest on debts. The U.S. average was 77.9%. In New Jersey, such expenditures equaled more than 100.0% of actual state Highways expenditures that year. Unfortunately in both states, much of the money was going to past debts. Belated increases in gas taxes and tolls do nothing to undo all the money now being sucked into the past so that past motorists could pay less in the 1990s, 2000s and into the 2010s.
Similarly, in FY 2017, charges for services (tolls, fares, airport charges to airlines, seaport charges to ocean freight companies), motor vehicle tax and license fees, and federal and state aid (including money provided to New York City Transit from dedicated MTA taxes), equaled 96.2% of total transportation expenditures in New York City, on the two airports, Mass Transit, Highways, Streets, and Ferries. The national average was 60.5%. In much of the country, transportation infrastructure means local streets, and while state highways are paid for in large part with motor vehicle taxes and tolls, local streets are generally paid for with general revenues, from property taxes.
And here we are, facing blackmail. The interests that sucked more out of our transportation system over the decades, or worked to put less in, are still in charge, and now demand that New Yorkers pay even more for transportation and accept a deteriorating infrastructure, reduced service, and a lack of improvements. In fact, I would say that their goal is take the entire $35.3 billion residents of metro New York save by not spending as much on motor vehicles and transfer it to themselves, having it spent on interest as they cash the transit system in. Leaving future residents of metro New York no better off than if the lived in some other metro area and drove everywhere — worse off, if the deteriorating ride quality for transit riders is included.
Because of the coronavirus, they will now smile, sneer and say. But the coronavirus didn’t’ make LaGuardia airport a dump when candidate for President Joe Biden said it was back in 2014.
The cornoavirus is not the reason transit service collapsed at about the same time, all over the metro area.
The coronavirus is not the reason East Side Access is still not finished after nearly 50 years, or that a Second Avenue Subway that was borrowed for three times ended up with just three stations.
Moreover, these things did not happen because the residents of New York City were unwilling to pay for transportation. We have paid and paid and paid some more.
The type of politicians backed by the same interest groups that made this happen, and benefitted from it, are still in charge. Still making decisions about the common future later born generations will inherit. Still doing so in their own interest. And still rationalizing every step of the way, so they don’t have to fell bad about it on their way to Florida.
The political/union class doesn’t care about the Mass Transit system because they don’t use it, and don’t care much about the serfs who do. The executive/financial class and the real estate industry used to realize that their employees and service providers needed it, but perhaps now they see themselves as being elsewhere in a future that, therefore, they have stopped caring about.
The next post will be on the rest of the infrastructure, including what has traditionally been the biggest public sector bargain in New York City, and one of the public services with the greatest excess costs here.