Most of those who will read this post know the financial issues with New York’s Metropolitan Transportation Authority. Decades ago, funding for the agency’s capital plan was cut, and some capital funds were diverted to the operating budget as “reimbursable expenditures.” At the same time, effective fares were cut when the Metrocard was introduced, and current and – in particular former – MTA workers benefitted from a huge pension increase in 2000. The cost of capital construction contracts soared, due to pension increases for union construction workers and managers, and construction union pension underfunding, at about the same time. It was a political win for everyone – who is no longer around. The cost of all of this was borrowed or deferred, and today much of the money being paid to the MTA, in taxes, tolls and fares, is being sucked into the past.
As the years pass, meanwhile, major systems and components of the subway and commuter rail network continue to age, and eventually reach the point where they will either have to be replaced or start to fail and disrupt service more and more frequently. Perhaps to the point where entire lines have to be abandoned for years or decades, as two tracks on the Manhattan Bridge were. Or permanently, as the West Side Highway was. One of those systems is the signal system on the New York City subway, which is aging even as the cost of replacing the signaling on a line has exploded. The plan had been to gradually replace conventional railroad signaling with Communications Based Train Control (CBTC). But after decades of borrowing the MTA Capital plan came to a near halt after the Great Recession, and compared with the plans in place 17 years ago the MTA is way behind, without any hope, at recent prices, of ever being able to catch up. Can technology provide a way out?
Since the data is published every year, I have long hoped that some other organization would use the data and publish reports showing what it says, having someone else to it as part of their job. That hope increased after the New York Times used the data as part of its series on the New York City Subway. And after Governor Cuomo directed the MTA to hire a consultant to study “MTA Reinvention.” Moreover, the NTD now includes a spreadsheet titled “Metrics” with almost all the basic cost and service efficiency ratios one might want to see. As of the date of this post that spreadsheet for 2018 is on page 2 (tab at the page bottom), though it will be moving down as 2019 data is published.
There has been, however, no public discussion of what National Transit Database data shows about New York’s transit system since the NY Times articles. So rather than allow this information to remain among the unsaid, I decided to at least analyze the operating budget. (I’m not sure there really is a capital budget, since under the prior MTA capital plan, regardless of what officially passed, most of the money never actually arrived and most of the work was never actually done).
About a year ago I published an analysis based on U.S. Census Bureau government finances data, for all states and all available years from 1972 to 2016, that showed the extent to which each state’s future (with New York City and the rest of NY State analyzed separately, and the District of Columbia also included) has been sold out. Sold out by past decisions, non-decisions, deals and favors with regard to state and local government debt, past infrastructure investment, and under funded and/or retroactively increased public employee pensions. The analysis was well received, and best of all many people downloaded the spreadsheet with all the data for all 50 states, all the tables, and almost all of the charts. I always put up a post encouraging people to download the spreadsheets, look at the data themselves, and make up their own minds before reading my subsequent posts and getting my take on it. Generally people had downloaded charts, but not spreadsheets. Last year that changed.
What I had forgotten last year, however, but have since remembered, is the multi-step process needed to put readable tables, in JPEG format, into the posts on WordPress. So this year I added the tables to the posts I just completed on state and local government employment and payroll data from the 2017 Census of Governments, and I found that many people had downloaded them. I don’t know why some people might prefer pictures of numbers to actual numbers, but apparently some people do. So I plan to rectify last year’s omission of tables – except for people who downloaded the spreadsheet — from the Sold Out Futures posts with a brief reprise. The data shows that while the blame for our sold out future is widely shared, New York City’s past taxpayers are the most the most blameless in the entire United States. And New York City’s public employee unions and contractors have been the most unfair to other city residents. And nowhere else is even close.
This series of posts based on Census of Governments state and local government employment and payroll data for March 2017 (and 2007 and 1997) continues with a post on infrastructure functions: highways and streets, mass transit, air transportation, water transportation, government-run electric and gas utilities, water supply, sewerage, and solid waste management. Along with related private sector activity. When I joined New York City Transit out of graduate school in 1986, I was told it was the largest industrial/blue collar employer in New York City. It probably still is, with the other functions described adding as many blue collar jobs, and jobs with contractors many more.
In the past 10 years or so, subway riders have experienced a drastic decrease in their quality of life despite rising fares, relative to the very low inflation of the period. This is something I have attributed to costs from the past – the big pension increase in 2000, with huge costs deferred until later, and decades of zero state and city funding for the MTA capital plan, with money borrowed instead. But after reviewing the data for these functions, I have begun to wonder if even worse is coming. And not just at the MTA. But we will have water!
I’m not a big fan of grid-scale solar energy. The human load on the planet comes down to four things, in order of damage. 1) Non-renewable energy use; 2) The transformation of the surface of the planet for our own use, from urban development to farming to strip mine fishing; 3) The concentrated organic load of our excretions, and those of our domesticated animals; and 4) The aggregation of certain materials into toxic concentrations. Grid scale solar helps with number one, but makes number two worse.
Last week, however, I read about the MTA planning to expand solar panels to areas I do approve of – rooftops.
These are areas that are already covered by human-created structures, and thus no loss. The goal is for the MTA to make some money by leasing out the roofs of the structures it owns. But that got me thinking.
Over the past three posts I’ve documented how today’s and tomorrow’s Americans have had their future sold out and cashed in with regard to state and local government debts, inadequate past infrastructure capital construction, and retroactively increased and underfunded public employee pensions. Over and above the generational inequities at the federal level in government, in the private sector, and even in many families. Adding it up, on average today’s and tomorrow’s Americans have inherited a sold-out future due to past state and local government deals and non-decisions equal to 46.9% of their personal income in FY 2016. That is virtually unchanged from the 47.1% I found when I did the same analysis for FY 2012, despite a much stronger economy and another asset price bubble. A mortgage at nearly half your income, my income, everyone’s income that will have to be carried indefinitely into the future, before any public services are provided, before any public benefits are paid, before taxpayers spend a nickel on their own needs.
Unlike the other generational inequities in our society in the wake of Generation Greed, the state and local government burden is greater or smaller depending on where you live. It attaches to the people there now, unless they move away from it, and may eventually attach to each place’s real estate, since real estate cannot pick up and move. This final post in the series will rank states, and New York City and the Rest of New York State separately, based on how sold out their futures are.
Debt and infrastructure investment are supposed to go together. State and local governments have operating budgets and capital budgets, and constitutions and charters that say that while money may be borrowed for capital improvements, the operating budget is supposed to be balanced.
During the Generation Greed era, however, that isn’t what has happened. For the U.S. as a whole, total state and local government debt increased from 14.1% of U.S. residents’ personal income in FY 1981 to 22.7% in FY 2010, even as infrastructure investment diminished. This was a matter of generational values, not just a matter of government. One finds the same trend in business – more debt, less investment – during the same years, with the short term high of having more taken out relative to the amount put in contributing to perpetual political incumbency and sky-high executive pay. A generation, it seems, has decided to cash in the United States of America and spend to proceeds before it passes away.