Demanding Transit Accountability: Can Someone Please Explain How $358 Million Can Turn Into $20 Million?



by on Apr 29th, 2013

“This MTA budget not only lacks accountability, but is also most certainly not elementary, my dear Dr. Watson!” Source: The Gentleman Blog

THE COMMUTE: This can only happen in government. Governor Andrew Cuomo announces that he is making $358 million more available for the MTA in next year’s operating budget. The following week, the MTA announces it is deciding how to spend the new $40 million it will be receiving, while other analysts are claiming the amount is closer to $20 million. Just as the governor’s “new” money can disappear in only one week, so can the additional monies raised by a fare increase. Is it any wonder why transit riders and taxpayers are so frustrated?

Former MTA Chairman Jay Walder claimed that the MTA is entering a new era of transparency. Well, someone is not being transparent and it is either the governor or the MTA. This is a perfect example of how government is not supposed to run. I am not a finance expert or an accountant and never claimed to be, but I can tell when someone is stealing from me. I would like to know why the media is more interested in telling us how Justin Bieber is combing his hair this week than even mentioning, heaven forbid investigate, what the story is behind this discrepancy? Are the MTA’s finances that complicated that no one even understands them? How can $338 million just vanish into thin air without anyone, besides me, even caring to ask what is going on? I guess it doesn’t really matter when we can just soak transit riders for higher fares every two years. I wish I had some answers here.

“Why, this budget makes no sense at all!” Source: Illustration of Sherlock Holmes by Frank Wiley for “The Valley of Fear,” from The Strand Magazine, September, 1914 / Toronto Public Library

Future (for lack of a better term) MTA Chairman Tom Prendergast recently directed his staff to investigate which services discontinued in 2010 could be restored. The obvious choice is to return the subway service guidelines to what they were prior to the cuts so as not to plan for standees during non-peak hours. Next would be to restore more bus service cuts. I discussed other ways of spending the money here. But why bother when the surplus will probably turn to a deficit before we can even figure out how to spend it?

What we need is transparency and accountability. Both Cuomo and the MTA have some explaining to do here and the media and our elected officials must ensure they do that. If not, they are shirking their responsibilities by keeping silent. The simple story is that the MTA already budgeted the new money the governor recently announced. However, that explanation is not good enough. It is not even clear if this new money is replacing funding from last year when Cuomo partially eliminated the payroll tax. That is muddled in the difference between payroll tax transfers and normal tax receipt transfers.

How Do We Get More Transit Accountability?

Some of the mayoral candidates believe the problem lies with Albany and if the City operated the subways which it presently owns and leases to the MTA to operate for $1 a year, our accountability problems would diminish. But would it? I mentioned that idea here and will not discuss the pros and cons right now. I will only make the same point that Prendergast made that with the responsibility comes the financing.

Most of the mayoral candidates realize this with the exception of so-called front runner (by the media) Christine Quinn who is in favor of not only the city taking over its subways and buses, but the entire MTA, which also operates Metro-North and the Long Island Rail Road outside the city as well. While it may make some sense for Metro-North to add stops in the Bronx, is takeover the way to accomplish that and how likely are the suburbs to go along with that idea? Many think she is being unrealistic or irresponsible, yet the media will not say anything negative about her while continuing to focus on John Liu’s past campaign financing problems.

What Is Transparency And Accountability?

Transparency is not advertising a public hearing link that is broken for two weeks prior to the hearing and is fixed just a day or two before or announcing that video testimony will be postponed due to Hurricane Sandy, then only changing the location but not the time.

Transparency is not stating seven different start dates for the beginning of a new service.

Transparency is not advertising 10 corridors on page 29 (or 37 online [PDF]) as potential candidates for the second phase of Select Bus Service, then choosing an 11th one to fast track, which one Queens city councilman states could be implemented within a year.

Transparency is not burying important information in documents, hundreds of pages long, on a page entitled “Board and Committee Materials,” in which you have to scan through innumerable links and documents for the exact date of the information you are searching for and when it was archived, without the information you are seeking always showing up in a search.

Transparency is not presenting survey results without disclosing the survey methodology, as was the case when stating on page 19 that 99 percent of SBS riders were satisfied or very satisfied with the M15 SBS.

Transparency and accountability are more meaningful breakdowns as to where the MTA funding comes from and how it is spent. This information should be in an easy to find link on the MTA’s website. Presently, to obtain financial information, you have to go to MTA Home, then Transparency, then Budget and Financial Statements, and finally MTA 2013 Adopted Budget. On page 11 of the 377-page document, you will find some pie charts relating to MTA funding. For more detailed information you have to sift through the 377 pages. Showing the planning service guidelines is also a must so that planning is not shrouded in mystery.

Conclusion

This disappearing money has raised questions regarding responsibility and the media: Why is the media ignoring this question completely and why are they are not saying anything negative about mayoral candidate Christine Quinn? There was a demonstration last week against Quinn led by the people you would least expect to demonstrate against her: gays and lesbians. The only coverage was provided in a You Tube video made by the group leading the protest. Their website is also worth checking out.

It should not require 377 pages to explain how the MTA receives and spends its money. MTA funding needs to be simplified so that a steady stream of direct revenue is provided with less shifting of funds that allow politicians to play games so that no one can understand or clearly explain what is happening. The media and elected officials must also ask the right questions. There should be an easy to find link that simply shows how the MTA receives and spends its money using categories that are more meaningful to riders, such as comparing the amounts spent on different types of services provided, (local bus, express bus, subways, paratransit, etc.) and how much is spent on items such as service, maintenance, fuel, etc.

Otherwise, the governor will be able to continue to steal precious MTA funds and the MTA will continue to remain unaccountable. Transparency must be more than a slogan. What happened to the $358 million is far more important than this week’s top transit story, that additional subway stations will soon be receiving Wi-Fi.

The Commute is a weekly feature highlighting news and information about the city’s mass transit system and transportation infrastructure. It is written by Allan Rosen, a Manhattan Beach resident and former Director of MTA / NYC Transit Bus Planning (1981).

Disclaimer: The above is an opinion column and may not represent the thoughts or position of Sheepshead Bites. Based upon their expertise in their respective fields, our columnists are responsible for fact-checking their own work, and their submissions are edited only for length, grammar and clarity. If you would like to submit an opinion piece or become a regularly featured contributor, please e-mail nberke [at] sheepsheadbites [dot] com.

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  • fdtutf

    At your third link, we find this: “Gov. Cuomo’s budget recently included $40 million more transit funds than the MTA anticipated, although some advocates say other state budget maneuvers actually puts the additional revenue at about $20 million.”

    It seems clear to me that the MTA had anticipated $318 million, but the budget is for $358 million, hence the $40 million difference. Of course the Governor’s office is going to spin it as $358 million because that sounds like a buttload of money, and of course the MTA is going to point out that they were already counting on a $318 million increase, so it’s really only $40 million extra. Mystery solved.

    Now without more details, there’s no telling why some analysts are painting it as only $20 million, but anyway.


    • Allan Rosen

      But can someone answer how much of this $358 million is to replace the money lost from the partial repeal of the payroll tax? That should have been mentioned in the Governor’s press release. He left us to infer that all this was new money which it isn’t.


    • Allan Rosen

      I would also like to know how the MTA budgeted that $318 million and if any of it went to providing new services?


      • Benjamin Kabak

        Have you read through the budget documents? It’s all in the February Financial Plan. If you’d like to know, do the legwork necessary to find out.

        http://www.mta.info/mta/budget/


        • Allan Rosen

          That’s the whole point. You shouldn’t have to do major legwork to get some answers to simple financial questions. There should be a direct link for general

          financial information and another link to the detailed reports for those desiring more details.

          This is what I am able to figure out after doing the legwork. From what I previously read, the MTA lost $250 million due to partial repeal of the Payroll Mobility Tax.

          The governor has replaced this amount in the 2013 budget with $310 million. However, when you check the 2012 Consolidated Financial Statement on page 109, it states that the subsidy from the Mobility Tax was $1,569 Million; the 2013 Budget shows on Page 24 shows the Payroll Mobility Tax in the amount of $1,248M and 310M in replacement funds for a total of $1,558M which is $11 million less than last year.

          But it also shows $310.7M in additional MTA aid from the State and another $187.9 in additional state aid. That’s a total of $2,056.6 M in state aid for 2013.

          However, if I want to compare this amount with what was received in 2012 from the State, you can’t using the Consolidated 2012 statement. because the state subsidy is lumped with the City subsidy (on page 109) into a single amount of $375.8M. Then there is the “Build American Bonds Subsidy of 96.1M” which is not listed for 2013 and the subsidy from the Urban Tax whatever that is declined from $439.1M to $435.2M between 2012 and 2013

          So I can’t even figure out if the state subsidy increased or decreased between 2012 and 2013. No wonder analysts can’t figure out if the amount is $20M or $40M

          more than the MTA anticipated, and we still don’t know how the other $318M or $338M that the MTA supposedly received in additional subsidies were allocated.

          And when I asked you if the $358 million the governor cited was a replacement for the money lost from the partial payroll tax repeal, you responded, “It’s unclear

          to me exactly what promised money this is. There’s a lot of money that flows from Albany to the MTA, and it’s hard to track it…”

          So I’ve now done the legwork and still don’t have clear answers. Do you? What have I missed? You said it’s all in the February Financial Plan.

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  • F Train Man

    As others have already noted, you completely missed the point that the $40 million is the increase over what was already expected! The fact that you would go on the record like this absolutely confounds me. Why wouldn’t you privately ask someone intelligent about this before including it in a blog post?


    • Allan Rosen

      If it is so obvious, why do some analysts say it is only $20 million?


      • http://www.facebook.com/profile.php?id=529134157 James Dowden

        Inflation?


      • F Train Man

        I’m addressing your absolutely ridiculous question about how $358 million became $40 million. Don’t change the subject. The $40 million vs. $20 million question is a separate issue. I was obviously addressing the former and not the latter. As I said, you completely missed the point that the $40 million is the increase

        over what was already expected! The fact that you would go on the record

        like this absolutely confounds me. Why wouldn’t you privately ask

        someone intelligent about this before including it in a blog post?


        • Allan Rosen

          It is definitely not a ridiculous question. The governor makes an announcement that he is giving the MTA $358 million more in subsidies this year. We as taxpayers and straphangers have the right to know how the MTA is spending this money. Is anyone telling us this? If you are so intelligent, why don’t you tell me?

          How do we know that the MTA was expecting only $40 million less, because they tell us so? We know the MTA has never lied about anything and therefore can be trusted.


          • Andrew

            The governor is not giving the MTA anything. The MTA is collecting an additional $358 million in dedicated tax revenue, for which the governor is unabashedly taking credit (much like the governor proudly took credit for the rapid service restorations during the week after Sandy, even though he had nothing to do with them).

            The MTA had budgeted only $318 million in dedicated tax revenues. That’s where the $40 million number comes from:

            http://www.nydailynews.com/new-york/mta-40m-unexpected-funds-article-1.1299911?localLinksEnabled=false


          • sonicboy678

            So you’re saying this has nothing to do with the subsidies the MTA is (supposed to be) receiving?


          • Andrew

            This has to do with the dedicated tax revenues earmarked for the MTA, minus $20 million that the governor has decided to divert elsewhere. It’s not a gift.

            As far as we know, it’s also only happening this year, since the MTA’s funding stream is volatile. Next year, it’s possible that the dedicated tax revenues will come in below projections or that the governor will steal more than $20 million. I would certainly not recommend instituting permanent service improvements based on a one-shot pleasant surprise. If the $20 million doesn’t get swallowed up by $20 million in increased expenses, it should be saved for a rainy day (or rainy year), to protect against another emergency round of service cuts, or used to pay down debt.


          • sonicboy678

            That’s still a subsidy of sorts. The MTA can’t place any actual taxes; that’s the government’s job. Since it goes to the government first, the government is handing money to the MTA, meaning it is a subsidy.

            As for the government stealing funds, that’s just politics as usual. The government doesn’t seem to realize how important the MTA is. Some of these service changes could be beneficial, but the MTA actually has the audacity to claim that 30-minute headway is adequate for new services or service restorations.


          • Andrew

            It’s not really a subsidy. The state has already set up a collection of taxes, collected only in the MTA region, whose revenue is supposed to go to the MTA. The governor didn’t decide out of his own good will to give the MTA $358 million, not did the money come out of the state’s General Fund.


        • sonicboy678

          Sounds like you didn’t read this properly. Go back to the first paragraph and read it slowly.


      • Andrew

        Because, separate from the increase in tax revenues, Cuomo has quietly proposed a $20 million diversion of funds for other purposes:

        http://blog.tstc.org/2013/02/05/repeating-history-governor-cuomos-executive-budget-sweeps-20-million-from-mta/

        So the net gain is only $20 million above projections.

        More reading material:

        http://www.streetsblog.org/2013/01/23/cuomo-budget-rising-mta-debt-costs-leave-big-gap-for-riders-to-cover/

        http://www.streetsblog.org/2013/03/29/in-state-budget-tax-receipts-giveth-to-mta-and-cuomo-taketh-away/

        (I found these links with Google’s help in about two minutes.)


        • Allan Rosen

          Thanks for solving the mystery. So the bottom line is that the Governor takes credit for providing the MTA with $358 million more in subsidies, when it really was the improvement in the economy that was responsible, and quietly steals $20 million which he does not have to account for because he destroyed the lockbox act.

          At least he kept his promise to replace the funds lost by the partial repeal of the payroll tax this year.

          But I still question why the mainstream media has virtually ignored this just like they will only say positive things about Christine Quinn. I guess objective journalism and investigative reporting are mostly a thing of the past.


          • Andrew

            Credit for solving the mystery goes to the TSTC and Streetsblog (and this sort of investigative research is why I read Streetsblog daily).


        • Allan Rosen

          Also, why is the MTA covering up for the governor by stating the amount is $40 million? It can’t be that you can see what is happening and they can’t. They should have been the one publicizing the loss of the $20 million, not covering it up.


          • Andrew

            Presumably so that Tom Prendergast can keep his job.

            The MTA rarely plays hardball with elected officials, even when the state is clearly at fault. I wish they would, but they’re probably afraid of the political repercussions.


          • Allan Rosen

            This time you are correct. I remember at the service cut hearings, speaker after speaker getting up and blaming the MTA and never once did anyone from the MTA state that the cuts were necessary due to cuts in the State subsidy. That announcement should have been made before the very first speaker spoke.


  • sonicboy678

    I noticed that people were quick to jump down your throat about the $40 million. I agree with you about the odd $20 million difference. It’s almost like it didn’t even exist in the first place.

    I don’t know where Christine Quinn’s head is, but it’s certainly not where it should be. For one, her plan to seize control of the MTA contradicts the agency’s primary purpose, which is to provide transportation solutions for the general public in the New York metropolitan area. The MTA isn’t supposed to be owned directly by the government, especially since it’s not exactly a profitable business. Revenue can be generated, but it can only go so far. Let’s not forget that there are many other issues the government already has to worry about, such as health care, education, and security. Another one of Quinn’s proposals, the one concerning the police, is under fire from Bloomberg, among other people. Now I hear that the people most likely to support her are coming against her. If she really continues to complain about people bashing her (which is probably why the media won’t attack her), then she should probably take it as a sign to stop and reassess her political stance. I don’t know if I’ll vote this year, but I know she won’t receive my vote.


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