MTA chief Jay Walder says the state-run authority’s new $26.3 billion, five- year capital-spending plan is “a new way of doing business.” But he’s hemmed in by Albany’s insistence on the old ways.
Unless the private-sector contractors and unions who benefit from big construction projects give the pols a big shove in the right direction, the MTA is stuck — literally — putting a fresh coat of paint on a deteriorating support structure.
The capital budget is the MTA’s spending plan for major construction and maintenance — everything from building new subway lines to replacing aging buses and repairing commuter-rail stations.
Walder’s plan shows some fresh thinking. He chopped off $1.8 billion from last year’s proposal. Customers will notice some of the nuts-and-bolts stuff — like fixing a subway-station ceiling quickly for a few million dollars, rather than waiting ’til it requires a $100 million overhaul. And some stuff people won’t notice, like merging repair shops for commuter railroad lines.
But one immutable fact sticks out: Transit investments can be cheaper, but they’ll always be expensive. Even with the cuts, the MTA must invest at least nearly $13 billion in subways and buses. Track and signal upgrades — necessary to prevent accidents and maintain service — will cost $4.6 billion.
Another obvious fact: The MTA still has no idea how to fund this slimmed-down plan.
For the first time in nearly 30 years, the MTA is starting off with just two years’ worth of funding for the five-year plan. And even that’s too optimistic: Walder leaves a line in the capital budget for $9.9 billion worth of “future . . . state and local funding,” for example — meaning that the five-year plan starts off with a deficit of 42 percent.
Even the pot of money that the MTA thinks it has could shrink, too — since there’s no telling if a Congress that’s dealing with trillion-dollar deficits and a skyrocketing national debt will be as generous as even half a decade ago.
We’re already seeing the effects of the short-termism that straitened circumstances require. Mayor Bloomberg, for example, has zeroed out the city funds that were to build one of the two new stations planned for extending the No. 7 line to the newly populated far West Side — saving $750 million. But building the station a decade from now would cost 10 times as much.
Bottom line: The MTA’s capital plan doesn’t have the cash to keep up with natural wear-and-tear on the system, let alone to allow it to grow and improve. And decaying subways point toward citywide decay.
The danger points up exactly why the MTA needs cuts to its labor budget — and not just because it still faces up to a $400 million operating deficit, and maybe double that next year.
If the MTA could cut just $300 million a year from its labor spending, it would have enough money to fund more than $4 billion in capital investments — nearly half its current gap.
A $300 million cut may seem a tall order — but the raises that arbitrators just granted workers for city subway and bus workers, largely with Gov. Paterson’s support, will increase the MTA’s costs by $270 million starting next year.
The MTA can still find that $300 million elsewhere. For now, it can look more to overtime — which will cost $550 million next year. Walder’s doing a bit of this, but to save a lot in one fell swoop, he needs political support.
Such savings are possible. The city’s private-sector unions have made big concessions to the construction industry over the past year to keep their jobs. Trades workers are working an extra hour a day for the same pay. And they already started with less generous and health-care benefits.
If the MTA’s unionized work force agreed to similar concessions, New Yorkers would see the investment results over time — a better system.
But Albany likes things the way they are now.
Albany could get a big nudge from the contracting world — that is, the private-sector engineering and construction firms who have seen their workers make concessions, and seen their own profits at risk, as state entities like the MTA shovel more money into labor.
One good sign: Denise Richardson, who represents the General Contractors Association of New York, wrote a month ago that lawmakers have been all-too-ready to sacrifice infrastructure projects while doing “everything in their power to avoid harming the sensitivities of the public-sector unions . . . [but] when it comes to private-sector unions, they are prepared to watch thousands of workers lose their jobs. The contrast is infuriating.”
Fighting words — but the contractors have been quieter lately. And the construction unions haven’t spoken up, either.
If the private sector — management and labor — doesn’t get loud, the MTA’s runaway labor costs will mean bad news for the entire city — starting with derailments and fires on the tracks.
Nicole Gelinas is a contributing editor to the Manhattan Insti tute’s City Journal.