OP-ED: Who really owns NYC Transit bus and subway system?

In 1953, the New York City (NYC) Board of Transportation passed on control of the municipal subway system, including all its assets to the newly created NYC Transit. Under late Gov. Nelson Rockefeller in the 1960s, the Metropolitan Commuter Transportation Authority (MCTA) was created.

The governor appointed four board members. The mayor appointed four more. The rest were appointed by suburban county executives.

In 1969, the MCTA became the Metropolitan Transportation Authority (MTA) and took over management of NYC Transit..

Today, Gov. Kathy Hochul is serving as the hired superintendent running the MTA. NYC Mayor Eric Adams can actually regain control of both the NYC Transit subway and bus systems. Current municipal officials are unaware that within the 1953 master agreement between the city of New York and NYC Transit is an escape clause. NYC has the legal right to take back at any time control of its assets, including the subway and most of the bus system. In 1953, the old NYC Board of Transportation passed on control of the municipal subway system, including all its assets under a master lease and operating agreement to the newly created NYC Transit.

The master lease and operating agreement was subsequently amended over time to include various NYC private franchised bus operators and former B&O Railroad-owned Staten Island Rapid Transit Railway Company.

In 1971, the passenger operations of the former B&O Railroad-owned Staten Island Rapid Transit Railway Company were sold to NYC for $3.5 million. Later that year, NYC passed on control to the MTA. The MTA created a subsidiary, the Staten Island Rapid Transit Operating Authority. It is managed by the MTA NYC Transit's Department of Subways and Staten Island Railway.

In 2005, NYC transferred management of the seven private franchised bus operators (Command Bus, Green Lines, Jamaica Bus, Triboro Coach, Queens Surface, NY Bus and Liberty Lines Bronx Express) under the NYC Department of Transportation (NYCDOT) to the MTA. The MTA subsequently created MTA Bus, which is separate from NYC Transit and Manhattan Bronx Surface Bus operations.

Regaining total control comes with a number of financial liabilities. City Hall will have to negotiate with both Gov. Hochul, State Senate Majority Leader Andrea Steward-Cousins, State Assembly Speaker Carl Heastie and members of the New York State Legislature over how much of the MTA's $47 billion long term debt and billions more in employee pension, health insurance and other liabilities come with the package.

According to a recent audit by State Comptroller Tom DiNapoli, the amount of outstanding long-term debt issued by the MTA more than tripled between 2000 and 2020, reaching $38 billion, and is projected to approach $47 billion by 2023 (including $2.9 billion issued for operating expenses). Debt service is projected to reach $3.8 billion by 2028, $1.1 billion more than in 2020. The share of total revenue needed to pay debt service is projected to reach 23 percent in 2024 after averaging 16 percent over the past decade.

NYC would also inherit a series of union contracts and work rule agreements. Contract negotiations between the MTA and NYC Transit Workers Union (TWU) Local 100 are underway. TWU Local 100 will want salary increases that keep up with inflation. Two years ago, inflation was four percent. Last year, it grew to over eight percent.

It continues to grow in 2023. The MTA previously budgeted only two percent per year for the next round of labor contracts. What the NYC TWU Local 100 obtains for its membership, both Long Island Rail Road and Metro North Rail Road unions with thousands of members will want parity. TWU Local 100 President Richard Davis, representing 40,000 bus and subway workers, has made clear to the MTA they should not try to nickel and dime or balance the agency budget on the backs of workers during contract negotiations.

He is looking for higher wages, better health care and mental health benefits and improved pensions along with ending ceilings on overtime pay counting toward pensions. This could add up to a billion or more over coming years to the current multi billion dollar multi year MTA financial deficit. This is on top of ongoing fare evasion, which in 2022 resulted in $600 million lost revenues. There is no sign of fare evasion being any better in 2023. Add another $15 billion shortfall to the current $51 billion 2020 - 2024 Five Year Capital Plan without Congestion Pricing Toll Revenues.

They would also have to develop a plan for turning over management for billions in hundreds of ongoing capital improvement projects that are already under way. Don't forget current purchases for several thousand new subway cars and buses. A significant portion of the $12 billion worth of capital funded projects contained in dozens of grants from the Federal Transit Administration would have to be transferred from MTA to NYC.

City Hall could probably count on the same level of state (capital and state transit operating assistance and federal would also be available.

NYC Transit bus and subway are the largest transit operators in the nation with a fleet of 6.400 subway cars and 4,400 buses. MTA Bus with a fleet of 1,300 buses is one of the top 10 bus operators in the nation. It is the equivalent of attempting to manage a fortune five hundred corporation. Does NYC have the technical capacity to take on such an undertaking?

Today's NYCDOT technical capacity as it relates to subways and buses is weak. It is primarily in the management of Staten Island Ferry, bus lanes, bus shelters, bus stop signs, select bus service, bus priority signalization, bike lanes, pedestrian plazas and street calming projects. The city would need to develop the skills necessary to manage such a large endeavor.

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Larry Penner is a transportation advocate, historian and writer who previously served as a former director for the Federal Transit Administration Region 2 New York Office of Operations and Program Management. This included the development, review, approval and oversight for billions in capital projects and programs for New Jersey Transit, New York Metropolitan Transportation Authority, NYC Transit bus, subway and Staten Island Railway, Long Island and Metro North railroads, MTA Bus, NYCDOT Staten Island Ferry along with 30 other transit agencies in New York and New Jersey.

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