The MTA\u2019s dysfunction starts at the top

The Metropolitan Transportation Authority moves 8.6 million passengers daily across 736 stations. It employs 74,087 workers and spends $16.7 billion annually. Yet nobody is in charge. As the MTA prepares a midsummer plan to “restructure” itself, one question arises: Does the public-authority structure, which has governed transit for 51 years, work?

The MTA is different from most local government. In firefighting or policing, an elected official, usually the mayor, appoints a commissioner. If the commissioner fails, the mayor can replace her. If the mayor fails, voters can replace the mayor. Checks and balances come from the City Council.

The MTA came out of the late 1960s, when Gotham was sliding toward its 1975 debt default. The city couldn’t manage its transit system. Starting in 1968, Gov. Nelson Rockefeller and the Legislature created the MTA, essentially a nonprofit corporation, so subways, buses and rail could benefit from the profits minted by Robert Moses’ Triborough Bridge and Tunnel Authority, folded into the new entity.

The MTA has an independent board, made up of individuals who nominally represent the state (with the most representation), the city and suburbs. The governor and Senate approve board members and the chairman.

Public authorities supposedly offered three advantages. First, like private businesses, they could attract top talent. Second, the authorities, unlike government, would be self-sustaining, since they generated revenues independent of taxes (in this case, the new bridge and tunnel tolls). Third, the board structure insulates it from political pressures, enabling officials to make tough decisions, such as cutting labor costs.

The MTA falls short on all three counts.

The qualified managers it does attract — like subways chief Andy Byford — don’t have freedom to run the agency ­efficiently.

The MTA is not self-sustaining — it depends on $6 billion in annual state taxes, plus, soon, $1.5 billion from congestion pricing.

Finally, board members aren’t independent. Gov. Andrew Cuomo’s newest board member is Linda Lacewell, head of the state’s Department of Financial Services. As DFS chief, Lacewell is a direct appointee of the governor; her career depends on staying in his good graces. It’s hard to see how she could thwart his wishes when it comes to, say, union contracts.

Independence matters so much that board members’ implicit “fiduciary duty” to the MTA and not to political officials was made explicit in law in 2009.

What’s been the price of the erosion of independence? In 2001, the MTA was $15 billion in debt; today, the figure is $41 billion. In 2001, the MTA’s operating costs were less than $7 billion annually ($10 billion in today’s dollars); today, the figure is $16.7 billion.

The board hasn’t done its one job: insulate itself from politics to ­ensure the MTA’s long-term health. Escalating costs — uncontrolled by board members — encroached on the MTA’s ability to conduct regular maintenance and inspection of its tracks and signals, contributing to a tripling of subway delays between 2013 and 2017. Board members regularly approved budgets in which long-term costs outpaced long-term revenue projections.

The solutions are both easy and hard. As John Kaehny, director of Reinvent Albany, a good-government group, points out, the MTA board is nothing like a functional corporate board. A corporate board names its own chairman and CEO. At the MTA, the governor appoints the CEO, and “the board cannot fire, sanction, suspend, torture, whatever, the chair,” says Kaehny. Further, the board lacks independent staff.

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The Legislature could give the board the power to hire and fire its chairman. Then “the board would be extremely important,” Kaehny says.

The Legislature could also ­require representation from the state comptroller’s office as well as the state lawmakers, which might introduce checks and balances.

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Still, no matter how it’s reformed, a board can’t work without truly independent members (to be sure, this has been a problem at corporations, as well).

Dick Ravitch, the ’80s-era MTA chair, offers criteria: “business experience, courage to stand up to the governor, willingness to confront the political system, relationship with the business community.”

That’s a tall order in modern-day New York. Key industries, including real estate, depend on special subsidy carve-outs from the state for their business models and can’t upset politicians. Nonprofits depend on government funding.

And private-sector officials in, say, the financial industry, are terrified of raising their profile and ­aggravating a bigger backlash — a backlash that’s in part due to their own mistakes.

The MTA is always the hostage of its era. Independent leadership and competent credibility — in government or the private economy — is in short supply. It’s hard to fix the MTA without fixing other stuff; no board is an island.

Nicole Gelinas is a contributing editor of City Journal, from which this column was adapted. Twitter: @NicoleGelinas