Governor Gets What He Wants at the MTA; Now It’s Time to Deliver

At the end of the state legislative session that just finished several steps were taken to consolidate Governor Cuomo’s power over the MTA. First, he swapped out two of his ‘independent’ appointees to the MTA Board for two members of his state cabinet, Robert Mujica, his budget director, and Linda Lacewell, commissioner of the Department of Financial Services.

Second, in order to legitimize the board appointment of someone who is not a resident of the MTA region, the law was changed to provide that the state budget director, regardless of residence, may serve on the board ex-officio.

Finally, a new law was passed requiring the appointment within six weeks of a “transformation director” to report directly to the MTA Board to implement the reorganization plan that was required by the budget bills passed in early April and is expected to be prepared and submitted by June 30.

These actions have been criticized by respected transit analysts, (see here and here), largely on the grounds that the governor is creating conflicts of interest by placing his own full-time employees on a board that is supposed to be independent and that he is undermining the governance of the MTA by creating new positions outside the existing chain of command.

These are valid concerns; however, for those who have bemoaned Governor Cuomo’s past ambivalence about his responsibility for the transit system, the actions have a significant upside: they establish clearly and beyond any doubt that the Governor of the State is the ultimate authority and decision-maker with regard to the MTA. And this governor has now taken ownership of it in a clear and unequivocal way.

I know Rob Mujica; he is one of the most competent people I have worked with in government. I have no reason to think that Linda Lacewell is any less capable.

They both bring a great deal of management experience and knowledge of public finance to their new roles as MTA board members. Yes, they will have to navigate their loyalty to Governor Cuomo and their fiduciary duty to the MTA; there may be issues on which one or both of them will need to recuse themselves. But for the most part, their other roles should complement and enhance their value as board members.

In fact, it may be a good idea to designate the state budget director as an ex-officio member of the MTA Board – and the city budget director as well, for that matter. Both governments have significant control over resources that are and/or should be devoted to the MTA, particularly with regard to its capital spending.

On the other hand, it is certainly unusual and probably not optimal to specify that a particular staff line at the MTA, i.e. a new Transformation Director, report directly to the Board and not to the CEO.
Consolidation of services has long been a favorite topic of Governor Cuomo and it makes sense that redundant departments among MTA divisions (NYCT, LIRR, MetroNorth, and TBTA) be combined. But reorganization of those agencies will not fundamentally change the MTA’s financial picture; more concerning than the new hire is raising unrealistic expectations about what “transformation” will accomplish.

In any event, Governor Cuomo, with the assistance of the state Legislature, has solidified his control, and it is long past time for him to move on from bashing the organization to creating and supporting useful change. He should take responsibility for:

1. Release of a new 20-year needs assessment that shows the full cost of getting every single piece of MTA infrastructure to a state of good repair. The last assessment was issued in 2013 and another is required by law in 2020. We cannot pay for everything at once, and there may be some items on the wish list we can never pursue, but we must see what all the needs are so that the public can provide input and the MTA Board can decide what needs to be prioritized.

2. Release of a five-year capital plan. The current plan covers 2014-19 and another is expected by October, for 2020-2024. Estimates of the cost of a complete plan for the MTA’s next five years range from $40-60 billion. Let’s see what the authority has decided to prioritize and how it is going to be paid for. Of course, money should not be wasted; but don’t skimp on this, the most important infrastructure in the state. In the past, the governor and his representatives have pressured the MTA to reduce its “bloated” capital plan, only to later agree to increases because of the urgency of the needs. Will Mujica and Lacewell support the full amount the MTA needs or try to protect the Governor from having to come up with more revenue by arguing for less?

3. Making it clear that the commitment to contribute $8 billion in state dollars to the current five-year capital plan will be honored, and specify what projects it will fund. All the projects in the current plan have not been completed; large projects are almost never fully achieved within a single five-year capital plan because construction commitments take time. But this money should not be allowed to disappear or be rolled over to fund the next five-year plan.

4. Focusing most of the money, time, and attention on getting the current transit system to operate effectively and safely, not on shiny new projects that lend themselves to ribbon cuttings but don’t improve travel times and experiences for most commuters.

5. Negotiating tough new contracts with the TWU and other unions that do not add any costs for the MTA and its riders. Curbing overtime abuse is of course important (another hands-on tactic of the governor was to hand-pick a new MTA Inspector General) but it is labor costs that are the primary driver of MTA spending, accounting for 60% of the MTA’s annual operating budget. The next round of contracts MUST contain work-rule changes that make workers more productive and contribute to cost savings, not increases. (Bob Linn is an excellent new appointment to the MTA Board who should be able to assist in this effort.)

OK, Governor Cuomo, you have been given everything you wanted in terms of control, more than many think is appropriate. Use your power wisely and effectively because there is no longer any question the subway buck stops with you.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

This post was originally published on June 26, 2019 by Gotham Gazette.