September 29, 2004. David Dyssegaard Kallick and Lava Thimmayya spoke at a meeting of the board of the MTA.

David Dyssegaard Kallick
Senior Fellow, Fiscal Policy Institute and Coordinator, Labor Community Advocacy Network to Rebuild New York (LCAN)

Thank you for the opportunity to testify today. My name is David Dyssegaard Kallick, and I am senior fellow of the Fiscal Policy Institute. I am also coordinator of the Labor Community Advocacy Network to Rebuild New York (LCAN), a coalition that came together after September 11th to make sure equity and social issues were part of the planning to rebuild the city.

Since the fall of 2001, the sixty groups in LCAN have had a series of intensive meetings on rebuilding priorities. One of the central points of strong agreement within LCAN has been that infrastructure, especially mass transit infrastructure, should be the backbone of the rebuilding effort.

We are very pleased to see that the proposed capital plan includes $17.4 billion to keep the transit system in a state of good repair, and to replace cars, buses and stations in need of upgrading. But as many other observers have also pointed out, a plan of this magnitude can not be financed with another round of fare-backed bonds. The state and city governments must step up to the plate in recognition of the importance of an effectively functioning mass transit system to the economy of this densely populated metropolitan area.

We are also gravely concerned to see that there are so many expansion projects being rushed into the pipeline that there seems to be a major blockage. And if you’ve ever seen the pipes clogged in your bathroom, you know what happens if you try to force too much through at once. You wind up with a big mess.

The JFK/Long Island Railroad Link is a case in point. The cost estimate for this project is $6 billion. The governor has tagged two billion for the project by convincing President Bush–outside of the context of the MTA capital plan, before the Environmental Impact Study for the project has even begun, and without public hearings–to reprogram 9/11 aid to Lower Manhattan. Another billion is expected to come from the airport passenger facility charge.

You could say that the glass is half full, and $3 billion is available for this project. You could also say the glass is half empty, and that $3 billion is still needed.

Where will that additional $3 billion come from? There are already a number of very big projects crowding around every funding opportunity. The Second Avenue Subway. East Side Access. The extension of the #7 train.

The public transportation system should build out from a solid core; it should not look like a Rube Goldberg machine, with projects dangling here and there that overextend the system and jeopardize its basic service.

Let me also take a moment to state the obvious. Six billion dollars is a lot of money. There has not yet been a convincing study released to the public that shows who will benefit from the JFK/LIRR rail link, and whether the number of people benefiting justifies the enormous expense. The link to the airport, while a nice amenity, is a truly minor aspect of this link. The main intent is to bring commuters into Lower Manhattan, to support new office space that is being built highly speculatively.

We strongly urge the governor not to draw the MTA into obligations that overstretch its capacity.

Thank you.

Lava Thimmayya
Fiscal Policy Institute

I welcome this opportunity to testify on behalf of the Fiscal Policy Institute. The Fiscal Policy Institute (FPI) is a non-partisan research and education organization that focuses on the broad range of tax, budget, economic and related public policy issues that affect the quality of life and the economic well-being of New York residents.

Although the 2005-2009 capital plan is ambitious, it addresses core needs and is relevant to the economic requirements of the region. An efficient and affordable transportation and mass transit system is a crucial element to the City’s and State’s economic competitiveness.

Overall, our view is that the absence of funding by every level of government has the potential to disrupt the core program and abort expansion plans for high priority projects. It is unrealistic to think that we can finance more than a relatively minor portion of this new capital program with fare-backed bonds. Because of the way that recent capital plans were funded, particularly the 2000-2004 plan, debt service payments are already becoming too large a drain on the operating budget, jeopardizing the level of service and its affordability by moderate income households.

The State and the City must again assume responsibility to fund mass transportation needs in the region. New revenue sources should be explored. Consideration should be given to a commuter tax, East River bridge tolls, and other revenue sources that are logically related to the need for and/or the benefits derived from an effectively functioning transportation system.

Contrary to prevailing wisdom which suggests increases in government revenues cause a competitiveness problem for business, funding mass transportation will actually enhance New York’s economy. To this end, we urge the Governor and the Mayor to convene a commission, consisting of business, labor and local governments in the region, that would explore revenue options for funding MTA’s core capital and high priority expansion programs.

The framing of the 2005-2009 capital plan should be guided by principles that reflect:

  • equity between the subway and commuter rail systems and their riders
  • the promotion of a sustainable environment
  • a recognition of the benefits of an effectively functioning mass transit system to businesses, property owners and developers, and residents, visitors, commuters and other users of the system; and,
  • the regional nature of the mass transit system and of the region’s economy and its labor market.

Thank you.