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MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Stephen Bauman on Wed May 2 11:36:45 2012 From the SI Advance.The MTA gets a break Published: Wednesday, May 02, 2012, 6:58 AM Updated: Wednesday, May 02, 2012, 6:59 AM It’s hardly news to anyone that the Metropolitan Transportation Authority is, as always, in a deep financial hole. It already has a $4-billion gap in its operating budget and more than $30 billion in outstanding debt as it tries to work up a new financial plan. As Assemblywoman Nicole Malliotakis notes, the MTA’s debt load trails only California, New York State, Massachusetts and New York City in size. Add to this the looming contract showdown with the Transport Workers Union, which represents tens of thousands of MTA employees. The old contract expired in January and the militant union is refusing to make any concessions on pay, benefits or work rules. Sure, the MTA is notoriously inefficient and wasteful of money, but recent leaders of the authority have managed to make some reforms and things are better than they were. In any case, the numbers tell you that the agency’s money problems don’t all stem from waste. They’re primarily the result of the state and city short-changing mass transit. Other states see transit as a essential public service that must be adequately subsidized. In New York, however, government leaders walk away from that duty in order to spend that money elsewhere, even as they point fingers at the MTA, a frequent target of grandstanding politicians. Worse than that, not only does the state fail to pony up to provide the public with the transit system they deserve, but, as we learned earlier this year, it has been taking its own cut of the money from the MTA’s bond issues. This comes in the form of a “State Bond Issuance Charge” of $8.40 for every ¨ $1,000 in bond money. It can add up, given the degree to which the MTA relies on bond revenue to fund its massive capital program and to restructure existing debt to reduce the immediate burden. In fact, the state has confiscated $100 million in such “vigorish” since 2006. The authority would have had to fork over $50 million in BIC over the next two years alone to borrow the money it plans to raise through bond issues. Of course, this added financial burden has meant that the hard-pressed MTA, which is required to have a balanced budget, has been forced to resort to fare hikes, service cuts and even more borrowing to fund its operations. As Ms. Malliotakis said, “This policy was completely counterproductive as it was bleeding the MTA dry and contributing to the agency’s chronic failure to maintain adequate bus service and keep tolls and fares at a reasonable level,” Now that wrong has been righted, however - at least temporarily. At the urging of MTA officials, including Staten Island board member Allen Cappelli, and elected officials such as Ms. Malliotakis and Assemblyman Michael Cusick, who authored legislation to eliminate the fee, Gov. Andrew Cuomo finally relented and waived the bond issuance charge for new MTA bonds, but only on those issued in 2012 and 2013 to refinance old debt. Mr. Cappelli applauded the governor’s move as “a terrific first step to saving resources for our riders and taxpayers,” and added, “Now the MTA needs to look at the additional money from this and increased passenger revenue and invest it in restoring much needed bus and subway restorations as well as some additions to service.” We agree. And we note that Mr. Cappelli called this a “first step.” We urge the governor and the Legislature to grant a permanent exemption that will cover all of the MTA’s bonds, not just those used to refinance old debt. An improving economy should make that easier. There was never any rational justification for the state to claim a cut from bonds used to pay for public transportation. The state should be funding mass transit even more than it does, not appropriating a portion of the beleaguered MTA’s revenue. And we urge the MTA to act on the suggestion made by Mr. Cappelli and Ms. Malliotakis to show its appreciation for this action by restoring service and even augmenting service where it’s needed. That will likely make state leaders more inclined to make the exemption from the bond issuance fee permanent and all-inclusive. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Chris R16/R2730 on Wed May 2 12:40:49 2012, in response to MTA Bonds - NYS Takes Its Cut Off the Top, posted by Stephen Bauman on Wed May 2 11:36:45 2012. Pure bullshit. The city and state do not shortchange the MTA, the MTA spends to damned much. We all know on what. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Terrapin Station on Wed May 2 12:51:46 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Chris R16/R2730 on Wed May 2 12:40:49 2012. sarcasm fail... |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Railman718 on Wed May 2 12:53:36 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Chris R16/R2730 on Wed May 2 12:40:49 2012. Pure bullshit. The city and state do not shortchange the MTA, the MTA spends to damned much. We all know on what.Do nothings who know somebody thats why they are there making six figures down at 2 bway 130 and 180 Livingston? |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by TCO on Wed May 2 13:07:48 2012, in response to MTA Bonds - NYS Takes Its Cut Off the Top, posted by Stephen Bauman on Wed May 2 11:36:45 2012. M.T.A. mean Money Thrown Away and they don't know how to save $$$$$. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by WillD on Wed May 2 13:09:48 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Railman718 on Wed May 2 12:53:36 2012. There may be waste there, but you cannot pretend the MTA's money woes are entirely a matter of the number of managers or analysts in those buildings. The union's battle against OPTO is also a source of tremendous fiscal waste as it requires the funding of a crewmember who by all rights should have been rendered obsolete a decade ago on nearly all trains. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by WillD on Wed May 2 13:15:03 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by TCO on Wed May 2 13:07:48 2012. That's because as a public benefit corporation with bonding powers, if they were to generate a true surplus in one year that surplus must be applied to paying down the principle on their bonds. That is the worst possible outcome for the holders of those bonds, who now get rich on the MTA's debt service in both coupon payments and reissuing bonds to cover old debts. Every public authority able to make bonds has a perverse incentive to not generate a profit and to find avenues into which they can dispose of surpluses before they have to apply them to their debt. It really should be called what it is: government subsidization of the entire financial services sector. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Jackson Park B Train on Wed May 2 13:21:36 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Railman718 on Wed May 2 12:53:36 2012. The standard agit prop from both ends of the spectrum--BOTH are wrong. Shirkers exist in every job category from the ultimate boss to the lowest worker. Work rules mandate excessive staffing. Line workers assume ALL desk jockeys are useless. The adversrial culture is counterproductive for everyone except the Wendell Coxes and auto salesmen. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Railman718 on Wed May 2 13:58:23 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by WillD on Wed May 2 13:09:48 2012. Will stick to learning how to dive.. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Railman718 on Wed May 2 14:00:35 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Jackson Park B Train on Wed May 2 13:21:36 2012. Could have fooled me since they have been cutting jobs down here left and right now I'm talking RTO and Surface. Not aware of other departments. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by J trainloco on Wed May 2 16:16:02 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Railman718 on Wed May 2 14:00:35 2012. They've cut jobs in plenty of departments. The simple fact of the matter is that while there may be too many office staff at NYCT/MTA, even if you eliminated plenty of those positions, it would not fix the MTA's financial issues. Most of the office staff is not highly compensated either, many operations and maintenance personnel make more than people with desks at 2 Broadway. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by BrooklynBus on Wed May 2 17:12:18 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by J trainloco on Wed May 2 16:16:02 2012. I disagree. Much of the staff is highly compensated earning around the $100,000 mark if they have been there for a while. Operations and maintenance personnel have to work overtime to make that much. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by J trainloco on Wed May 2 18:55:09 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by BrooklynBus on Wed May 2 17:12:18 2012. Much of the staff is highly compensated earning around the $100,000 mark if they have been there for a while.MOST of the staff is earning significantly less than six figures, and is getting salary comparable to operations and field personnel. This includes technically qualified personnel, like engineers and architects. Are there senior managers making upwards of 150,000? Absolutely, but they are not in the majority, and senior management in operations/maintenance are similarly compensated. I would also like to point out that while members of TWU on this board chafe at the idea of "three zeros", non-represented employees have been getting 0% raises for years now. Many of these people have a less generous benefits package than represented employees, and many of them are making less than 60k a year, some less than 45. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Henry R32 #3730 on Wed May 2 20:15:28 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by BrooklynBus on Wed May 2 17:12:18 2012. Using the 2010 numbers available here, at MTA headquarters, there were:274 people making > $100,000/yr. There were 691 people making between $25,000 and $100,000. So 28% of MTA HQ staff made over $100,000 (I am not including people below $25,000 at all, which would have swung the numbers even more against your statement). Using the LIRR as an example, there are 1714 > $100,000, with the #3-5 most paid being an engineer and two conductors, to the tune of ~$240,000 each. Also in the > $200,000 crowd are an RCI, a track Foreman, Helena Williams, the CIO, a few more engineers/conductors, and some random VPs. Looking at the list, conductors and engineers are heavily represented in the $100,000+, club, and generally near the top. The $25,000-$100,000 group totals 5026 for lirr. So 25% of LIRR made over $100,000 in 2010 (calculation excludes below $25,000), and a good chunk of them are not office monkeys. So yeah, while it is certainly nice to think that becoming an MTA office worker is a fast track to six figures, the percentages are pretty much the same. And remember, many management and other office positions are overtime exempt, so they couldn't make more even if they wanted to... and sometimes you end up working unpaid overtime. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by SUBWAYMAN on Wed May 2 22:29:43 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Chris R16/R2730 on Wed May 2 12:40:49 2012. False Statement. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by N6 Limited on Wed May 2 23:59:10 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by WillD on Wed May 2 13:15:03 2012. Horrible. They could do so much more without having to pay debt service. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Railman718 on Thu May 3 00:01:25 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by J trainloco on Wed May 2 18:55:09 2012. I would also like to point out that while members of TWU on this board chafe at the idea of "three zeros"Im sorry you dont speak for me.. Or NETO or Bilfrom Maspeth or G1 Ravage... You dont know what we would feel... |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by WillD on Thu May 3 00:32:16 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by N6 Limited on Wed May 2 23:59:10 2012. Again, Public Authorities, toll road groups, and so on exist to pay debt service. It is integral to their existence as a politically sustainable construct. All other functions are secondary to the amount of money which can be routed from tolls, taxes, and other revenue streams to the banks, engineering, and legal firms they enrich. Pesky things like providing transportation, ensuring public good will, or other distractions only enter into the equation inasmuch as they affect the coupon payments and debt reissues, and contracts to the other firms that form the retainer regiment.That's not to say it's a bad way of going about things. It's actually an excellent compromise to bring a diverse group of political interests which might otherwise be largely opposed to the sort of government spending required to build a new subway in NYC these days together behind the megaprojects NYC now requires to make up for decades of neglect. Debt service is simply the price we pay for getting that compromise off the ground in the first place. IMHO it beats the hell out of not doing anything and letting NYC slowly atrophy to the point where congestion abates. And the alternative that allows construction, wherein we would adopt the Asian model of a real estate developer tied to the authority constructing a new line and using the profits from the real estate to cover the debt service, would never fly in the US. In any event, we can only use the real estate sales to pay off the capital costs and eliminate debt service if we are dealing with greenfield or very low density suburban areas in the first place. Using that model to build the transit NYC requires to serve areas built up in the absence of any transit expansion would simply be foolish. |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Edwards! on Thu May 3 02:22:59 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by J trainloco on Wed May 2 18:55:09 2012. Excuse me for asking,,but would you mind telling us what you do for a living? |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by J trainloco on Thu May 3 15:56:48 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by Edwards! on Thu May 3 02:22:59 2012. I'm a consultant field inspector for MTACC. Why do you ask? |
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Re: MTA Bonds - NYS Takes Its Cut Off the Top |
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Posted by Spider-Pig on Fri May 4 01:38:30 2012, in response to Re: MTA Bonds - NYS Takes Its Cut Off the Top, posted by J trainloco on Thu May 3 15:56:48 2012. PWN3D |
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