• Two subway lines cut entirely (Z & W).
• Two subway lines shutter half their active stations (G & M).
• One subway line cuts express service (J).
• 1500 employees fired, including 600 station agents.
• Longer off-peak headways.
• Dozens of low-ridership bus lines cut, or reduced hours.
• Increased maximum capacity in order to allow for more crowded trains & platforms, when ridership has already increased by 11% in the last fiscal year, breaking records and making rush-hour a struggle.

That’s what the New York City Metropolitan Transit Authority has in the 2009 budget plan, whose operating deficit has blossomed from $900M to $1.2B.  Gothamist has a finger-pointing contest.  Continued severe cost inflation and unexpected decreased revenues from several special tax arrangements, including things like real estate transaction taxes and corporate tax surcharges that are expected to drop like a rock, have tanked a July budget plan to keep MTA solvent. The mid-year plan forecasted quite a few required cuts due to the real estate bubble, but the recession piled onto that effect. The budget report officially comes out on Thursday, and is expected to beg for a state bailout, threaten these cutbacks and possibly more, as well as threaten to raise fares 25-50%.

This is no way to run a transit infrastructure. Some types of tax revenue aren’t stable enough to run much of anything – they’re good for durable capital expenditures, not operating revenue. I don’t understand quite how you can base your municipality’s budget on something like capital gains without having a huge statutorily mandated cash reserve (impossible… to… resist… spending…). We’ve come to expect growth-based taxes tracking nonreal paper wealth to beat inflation year after year, and it appears that our realization that this is unrealistic is, when you get down to it, the root cause of most of our economy’s ills.

If this is the type of “dedicated funding source” that WMATA is looking for, I’m not sure I’m in favor. The end goal, whether it’s achieved with city/state/federal matching fund committments, more stable types of local tax districts, or simply higher fares & parking fees, should be to achieve more than breakeven operating costs, enough that the transit authority itself can contribute some small amount of capital costs from a multiyear warchest.

Any less than breakeven, and increased service requires increased subsidy – which is rarely guaranteed. If you manage to get a system that balances the budget with a slight surplus though, they can adapt that surplus to address shortcomings which increases ridership, establishing a virtuous cycle of expansion and fluid optimization rather than a vicious cycle of cutbacks and rigid bailout pleas. Getting the marginal profit per additional rider into the positive column provides incentives to increase service which are a whole lot healthier for the system than the subsidized alternatives.  When a budget gets to the point that the authority has to let already-paid-for tracks and rolling stock sit vacant for significantly more time than they did last year, its leadership is at a precipice – it can change the system to be productive or it can live on on handouts and the detritus of a more productive age.

In terms of operating revenue at least, the toolkit useful to fund transit-as-innercity-social-program or transit-as-vital-industry appears to me to be pretty dissimilar from the one that needs to be used for transit-as-viable-urban-transportation-system. Increasing transit capital subsidies to something in the same vein as highway capital subsidies is something that many of us concerned with sustainability are optimistic about in the next administration. Whether there will be a chance of realistically pricing the infrastructural externalities involved in suburban/exurban living, or of gasoline/fossil fuel dependency, is more a matter of hope. If the latter could be done effectively, it’s my contention that things like subways wouldn’t require an operating subsidy. Metrorail is already pretty high on the cost-recovery totem pole, even while it pleas for a continuation of enhanced capital expenditure as many systems reach their designed end-of-life.

Put on your policy hat – If the world is your oyster card, what’s the best long-term resiliant system to fund a transit agency?