What's So Special About The MTA?

In recent remarks Steve Schlickman (RTA Executive Director) held up the Metropolitan Transportation Authority in New York as the model for the way this region should roll out its public transit. Schlickman was referring specifically to the MTA's well-funded and regularly repeated five-year capital plans, which have vastly improved the New York transit system over the past 30 years and resulted in significant ridership gains. He contrasted the New York approach to capital investment in pubic transit to the Illinois approach, which he described as a five-year plan followed by five years planning for the next five-year plan.

The purpose of this post is to summarize some of the other ways the MTA is different from the RTA and the service boards. Understanding these differences between the MTA, with its operating agencies consolidated under a single board of directors answerable to the State of New York, may point the way to move beyond the current weak oversight model that characterizes the RTA and the three service boards (CTA, Metra and Pace), each of which have their own boards of directors whose members are selected locally for the most part.

Organization: The MTA has seven operating agencies. These operating agencies include central city bus/rail (NYC Transit), commuter rail (Long Island Rail Road, Metro-North Railroad), suburban and outer borough bus service (Long Island Bus, Bus Company), an agency responsible for certain bridges and tunnels serving Manhattan (Bridges and Tunnels) and an agency responsible for capital construction (Capital Construction).

All of these agencies report directly to the MTA board. Managers in each agency thus have a clear line of reporting to a single board of directors. There are no separate boards covering each or some of these operating units. There is no permanent oversight agency over the MTA. When there are disputes between the agencies, the MTA board is the the unquestioned and final arbiter.

In contrast, in this region every service board has its own board of directors. Service board managers are primarily accountable to the board of their agency rather than the regional transportation authority. The RTA is neither empowered nor inclined to be the final arbiter of disputes between the service boards. Those disputes tend to linger and fester in the politicized environment in which the RTA and the service boards operate.

Governance: The MTA is governed by a 17-member Board. Members are nominated by the Governor, with four recommended by New York City's mayor and one each by the county executives of Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam counties (the members representing the latter four cast one collective vote). Nominees are confirmed by the State Senate. This arrangement gives the State of New York, and especially the Governor, a great deal of influence over the MTA. At least in theory, this influence should allow the State to align the MTA with State transportation, land-use and environmental policies.

In contrast, the State of Illinois plays almost no role in the governance of the public transit system in northeastern Illinois. The State does not appoint any members of the RTA, Metra or Pace boards. The State's only appointment powers are with respect to three of the seven CTA board members. Where appointments to the MTA are from the top (e.g., Governor) down, the appointments to the boards of the RTA and the service boards are from the bottom (e.g., mayors and county chairmen) up. Given the inevitably more parochial orientation of the folks who appoint the directors on these boards, it is not surprising that cooperation within the RTA family has been somewhat elusive.

Funding Streams: The MTA has a variety of funding streams. These funding streams include statutory percentage shares of a variety of state taxes and fees, including petroleum business taxes, motor fuel excise taxes, motor vehicle registration fees and drivers license fees. Other revenue sources include regional mortgage recording taxes, a real estate transfer tax, and state and local subsidies. (See here at pages 84-86 of 128). Another significant revenue stream is revenue from the bridges and tunnels controlled by the MTA, which account for 12 percent of the MTA's revenue. (Here at pg. 8-128). Tax and fee rates appear to be uniform through the MTA's service region, although more research needs to be done.

In contrast, the RTA must rely on one primary funding source, the RTA sales tax plus the 25 percent State of Illinois match through the Public Transportation Fund. State funding, including the additional grants for reduced fare reimbursement and paratransit, must be appropriated. The RTA sales tax rate in not uniform, but varies with political geography. In Cook County the rate is 1.0 percent and in the collar counties the rate is 0.25 percent.

Funding Allocation: It appears that the MTA is not bound by any statutory allocation formulas when it comes to the distribution of capital and operating dollars. In contrast, the RTA Act imposes a rigid geographic formula for how RTA sales tax revenue is divided between the three service boards and the RTA. This formula produces anomalies (e.g., Metra gets no money from the City of Chicago despite substantial service in the City and the CTA gets a disproportionately small share of suburban Cook County dollars relative to its service share in that region) and hard feelings as some service boards do better than others under the formula. If there ever was any link between the funding formula and transit needs, that link is obscured today as a result of all the demographic changes in the region since 1983.

Capital Projects: The MTA has a Capital Construction agency devoted to managing the MTA's major capital expansion and Downtown Manhattan transit infrastructure projects. It appears that the other MTA agencies continue to do more routine capital projects (e.g., rail line rehabilitations and acquisition of rolling stock). Responsibility for deciding which capital projects get funded and in what order are made by the MTA board.

In contrast, in this region all three service boards develop capital construction and system expansion programs on their own. The RTA even has its own capital program, most notably the failed personal rapid transit (PRT) prototype system that chewed up millions of dollars before it was finally cancelled in 2000.

The RTA does no ranking of these capital projects in terms of their cost effectiveness and overall benefit to the region's transportation system. CATS, the region's federally-chartered metropolitan planning agency, has been equally supine. The region follows a "you eat what you kill" approach, where the service boards compete--often with each other--to chase down federal grant money for their projects. The RTA then dutifully approves them. In addition, for years the RTA has imposed a fixed allocation of capital dollars that gives one service board (Metra) a much larger share of capital dollars relative to ridership share.

Cross-Modal: The MTA's Bridges and Tunnel agency gives the MTA some control over auto traffic accessing the central urban core via congestion pricing and control over the bridge and tunnel capacity. Through pricing and capacity limits the MTA can drive customers to transit (and vice-versa). Likewise, the MTA has the ability to coordinate prices on certain roads and rail lines serving the same corridors.

In contrast, the RTA has no equivalent control over roadways even though it runs in crowded highway corridors such as the Dan Ryan, Eisenhower and Kennedy Expressways. Even if IDOT implemented high occupancy toll lanes in these expressways or the City of Chicago implemented cordon style highway pricing around the Loop, the RTA and the service boards would neither share in the revenue nor be in a position to coordinate road and transit pricing.

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Steve Schlickman got a wistful look in his eyes when talking about the willingness of the New York to increase and sustain the State's investment in public transit. Maybe the New York legislature's willingness to do so is directly related to the choice New York made when the MTA was formed in 1968, a decade before the first incarnation of the RTA. New York chose a single entity incorporating multiple operating units under the single board whose members are selected by the State to secure the State's interest in the New York public transit system. Over the years that approach has been successful enough to persuade the New York legislature to step up and continue to provide sufficient funding for the MTA system. (Indeed, in some years the MTA has run budget surpluses!)

In contrast, Illinois chose a decentralized and balkanized public transit system with a weak oversight agency. That choice reflected the bitter city vs. suburban partisan politics of the time, when figures like Pate Phillip and Harold Washington were ascendant. While the General Assembly's choice of the current model may have made sense at the time, over the years it has not proven to be as successful as the MTA model. This is evident from the widespread dissatisfaction with the performance of the transit system, soon to be crystallized in the final draft of the Auditor General's performance audit. The Governor's proposed FY 2008 budget, which decisively rejected the RTA's Moving Beyond Congestion operating funding plan, is yet another signal that the State of Illinois is unwilling to step up its financial support so long as public transit in northeastern Illinois is organized and delivered in its current form.

This assessment is not meant to denigrate the efforts of the management and employees of the RTA and the service boards to try to deliver quality transit services. But just as good people sometimes find themselves in bad relationships, the RTA and service boards find themselves in a sub-par organizational structure, as the MTA's relative success only illustrates.

It appears that public transit issues are not at the top of the agenda of any of the key Illinois political leaders. Who, then, is going to step up with a package of true reforms that will result in a unitary public transit system for northeastern Illinois headed by a board that is aligned with State priorities and engenders the confidence of the Governor and the General Assembly such that they are willing to support an increased level of investment in public transit?