Why are our transit systems faltering just as more people than ever want to use them? Part of the answer lies with the way our government institutions are structured, and New York offers a case in point. …
Private companies built many of our subways, commuter lines and intercity railroads in the late 19th and early 20th centuries. Mass transit, like long-distance rail, was profitable then, especially when combined with speculation in land made accessible by new, fast rail connections.
Then came the automobile, and publicly funded highways. …
The demand was insatiable, and authorities were granted extraordinary powers. They could borrow money without having it count toward a city or state’s general debt. They were exempt from taxes on payments made to bondholders and on real property that reduced their costs by producing income. They could ignore local politicians and zoning and land-use laws as they seized private property — as long as they paid fair market value.
And at their best, they were governed by appointed professionals who reported to independent directors and served staggered terms, which diminished political influences. If a governor tried to interfere, they could point to covenants with their bondholders and argue that they could only invest in projects that would generate a reasonable return on investment.
For a while, the politicians were held at bay. Then, in the 1950s, the federal government started building the interstate highway system, offering big subsidies to states to connect to it. The combined might of the public authorities and federal outlays was astounding. From 1950 to 1975, the tristate region built more than 1,300 miles of limited-access highways.
Unsurprisingly, mass-transit operators struggled to compete with these roads and started going bankrupt. Against the operators’ will, the authorities merged the workings of mass transit and toll roads to provide cross subsidies …
And that was a problem. The addition of money-losing transit operations left the authorities more vulnerable to political intrusion in decisions. For example, tolls and fares were kept too low to raise money for capital investment. And governors started pushing investment in pet projects, rather than broad regional goals.
Which brings us to today.
The leadership of the Metropolitan Transportation Authority, which runs New York’s subways and buses, has asked Albany for $26.8 billion over five years, to help replace its 50-year-old signal system and outdated subway cars, start the next phase of the Second Avenue subway and finish linking the Long Island Rail Road with Grand Central Terminal.
Of course, we must find money to repair and expand our subway systems, and we must sort out the interstate political rivalries at the Port Authority. But it’s our crisis-driven approach to infrastructure that most needs to change.
We can learn from others. London and Stockholm have “congestion pricing” that generates revenue for mass transit while limiting the flow of cars in their central business districts. Hong Kong’s transit agency, the MTR, is a for-profit company in which the government holds a majority stake. Because it is publicly traded, it can avoid patronage hiring. By purchasing real estate and leasing property, it acquires revenue while keeping fares low.
Those examples — superior to any American model — recognize that it is appropriate for a transit system to have diverse sources for funds. Their decision-making structures are responsive to constituents, yet insulated from politicians. They allow long-term planning.
Crumbling Hudson River tunnels have become a national symbol of aging infrastructure and political shortsightedness. They represent nothing less than our failure to keep up with the rest of the world.