How the MTA Got So Broke

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Everyone who has ever sat on a stalled subway train knows that the MTA, the agency responsible for keeping New York City transportation running, is broken. Why? We asked MTA employees to tell us.

We’re going to begin with some historical perspective on the big picture—how the MTA got so decrepit to begin with. The following is from a veteran of the New York City Office of Management and Budget, who was privy to the broader financial planning for transportation that took place during the Giuliani and Bloomberg administrations:

I’ve worked in a number of places, and while City government is not run as efficiently as Wall Street, it is run far better than non-profits or cultural institutions, and on par with many public companies that are swallowed up by their own bureaucracy. The MTA is behind, certainly, but still better than any non-profits I’ve seen.

Around 1999, the MTA passed a 5 year capital plan which was financially preposterous. The dotcom boom was still pushing Wall Street, but with City and State endorsement, they basically expected funding to continue to come in at Madoff-like rates, as it had been doing in the late 90s. This was the timing of crazy golf course expansion and whatnot, where it seemed like 12% annual growth might be permanent. (Ridiculous, 8% is what’s used for pension modelling, and even that is a little rosy, if you’re doing any long term planning beyond 6%, you’re nuts). That’s when all the expansion projects hit: 7 train, east side access (still waiting), second avenue (hurrah!), Advanced Signalling, and if you remember the whole subway fleet was replaced (adieu, redbirds) and new railroad cars. There was also a whole new bus fleet, but no one thinks of them as real transit.

The problem was that the financial boom of the 90s had only let the MTA catch up on maintenance and get the system back to a reasonably functional state... That 2000 Capital plan basically assumed they could do the massive expansion AND keep a maintenance record like they had in the 90s, when they were luckily flush. I recall at the pre-meeting, when all us wonks from City, State, and the MTA sat around without the bosses, we’d all done our research and realized we’d built an unsustainable plan, but The Bosses and Politicians were already out there, and it was a done deal. We could show them all the dire portraits of the future, but they had ribbon cuttings to get to, and things were awesome in 1999.

Of course, 9-11 and Lehman brothers and Sandy add to the narrative, but there was never going to be a permanent boom economy, I don’t know if the ups and downs of the last 20 years are any different than the average of any random 2 decades. And while the City still had some growth, Bloomberg was only interested in real estate and added nothing to infrastructure. Even though the City was growing, its financial position didn’t really get better or worse than the rest of the country, you can’t sell bonds to people with no cash, they didn’t raise taxes to pay for the growing City, and the MTA was still burdened by that 2000 plan. So something had to give, the maintenance funding wasn’t terrible, but the Politicians began to think of the system as “fixed” because the City is still generally clean and better than the 70's and 80s. So they could splurge on shiny new things.

The payoff (or whatever you call a negative payoff) only begins to strike now, in the infrastructure world. Projects take a very long time, and infrastructure ages very slowly. But when it goes, it goes, and it takes another decade to get all the funding and do all the work to bring it back to par. You’ll get tons of stories from guys on the ground who will blame their bosses right up the chain, but those bosses are sitting there with $20 to fix $200 worth of problems. If it was $30 worth of problems, then yes, creative management might be able to do something, but they’re not close to that. So everyone is miserable, faces the same pressure, and going up the chain to the Mayor and Governor, they all know there’s no money coming. You’ll get lots of horror stories from the guy who just needed a $20 part to save a disaster, but he doesn’t realize that his boss has to give that part to 10 different guys. I’ve been that boss, every employee thinks he can save the day, but I can’t do jackshit to help him. Journalists love to find the stories of the government employee who misused a company car, but they couldn’t care less about a general funding shortfall (I don’t blame them, it’s not interesting, or easy to get anyone to understand why it matters.)

This isn’t just the subways, you’ll see it in all American infrastructure over the next decade. There was a major build in the 30s, and then again in the 60s. (New York and the whole northeast are especially susceptible to this schedule) Things like bridges are sold under 30 years bonds (sometimes 40) which reflects their useful life. This can be pushed to 50 or 60 years, but at some point, as with any maintenance (like your car), you’re paying more to fix it than just throw it out and get a new one. So since our infrastructure was last really built in the 60's, that “some point” is basically now, where we can slap on all the duct tape we want, but it’s rebuild time.

Of course, there is no rebuild coming. You can call up your local government contact and ask them for the rebuild rates on roads and bridges and watermains and sewers, you’ll soon discover that many are on 200 and 300 years cycles. This isn’t re-paving roads, this is “tear it up and build a new one.” You’ll have to trust me that bridges are only good for 50 years, but common sense should tell you that a road probably needs to be rebuilt more often than every 200 years. We can blame the GOP and tea partiers all we want, but there’s not a single Democratic politician proposing anywhere near the infrastructure funding we need, even if there were, there’s not a single voter out there who would vote for the kinds of tax hikes we’d need to address it, we’re just not close.

It’s possible that there could be a few disasters that hit the news and make someone care. The Brooklyn Bridge isn’t going to fall down, but maybe a few highway overpasses give out in the next big storm. Even this is unlikely, a more likely result is that a lot of them are simply closed over the next 10 years when they just can’t be fixed fast enough. I only cite bridges here because its hard to demonstrate a subway or road “disaster.” When the subway signals go down, the train simply stops. Roads just crumble and ruin your car. Neither makes for good TV. And even if you miraculously got people to care, it still would take 10 years to ramp up because you need cranes and tunneling tools and whatnot that aren’t just sitting around, you have to take a few years just to build the infrastructure you need to build the infrastructure. (Sidenote, there’s an interest schedule across the globe of mega projects, because in the whole world there are only a handful of the massive cranes and barges and tunneling equipment you need, so the whole world can only build yea-much cool shit at the same time). We got a glimpse of that in the aughts when China was building so much that concrete and steel prices became prohibitive, and noticeably reduced our own domestic construction, the number of projects was probably reduced by about 15% simply because of increased prices, putting us further behind schedule.

This is the kind of stuff we’d model out for kicks 10 and 20 years ago, as we wonks are wont to do. No one was looking at it, not that they could do anything. So while you’ve probably heard of unfunded social security and pensions and medicare and so on, American infrastructure is just another thing to add to the list. The difference is the other items are abstract and just drift into whatever we conceive of as Poverty and declining living standards, but the infrastructure will fall down (or you’ll sweat out some subway rides), so we’ll see it. We built a ton of shit during our boom years, mostly ignored it, but compounded that problem by essentially sticking with Reagan-era tax rates for an entire generation. Let’s say we shorted ourselves on taxes just 1% per year (though probably much more), but did that for 40 years, how we would ever get that lost savings back? This is the kind of stuff that’s easy to ignore because no one would look twice at a line graph with 1% cuts. But now we all own a giant house that we can’t afford the upkeep on since we spent all our money on iphones and hookers instead of investing in the house. So all you schlubs out there are just reaping the harvest that was sowed a generation ago by schlubs like me. Too late now.


Tomorrow, we’ll bring you thoughts from some rank-and-file MTA workers. If you are an MTA employee who wants to share, email me.

Previously in True Stories

Unemployed people.
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Government employees under Trump.

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