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PR- 298-04
November 09, 2004


Mayor Bloomberg’s prepared testimony is below.

Good afternoon and thank you for this opportunity to testify about New York City Transit’s proposed budget for the coming year. 

Most think budgets are only about numbers in a spreadsheet—but the numbers become real when they get applied to people—our people, the people we work for.  Bear that in mind when you consider this number:  $37,680. 

That is, more or less, the after-tax average annual income for an entire family of four New Yorkers.  Put another way, that family has less than $3,200 a month to pay their rent and monthly insurance premiums… shop for food and clothing… save for the future… and cover their other essential expenses, including transportation.

That’s an extraordinarily difficult challenge for New Yorkers.  One of our responsibilities as public servants is to do everything we can to help.  And part of that, certainly, is not imposing new and unnecessary financial burdens on the people who live here.

In that regard, last month, I asked the City’s appointees to the MTA board not to approve moving forward with hearings on subway and bus fare increases until the MTA has shown that it’s serious about doing more with less.

And today, we’re still waiting for that evidence.  Until we see it, the City’s representatives on the MTA board will continue to oppose any fare and toll increases.

What next then?  Well, like most New Yorkers, I was pleased that last week’s revised revenue forecast led the MTA to jettison the worst-case scenario it had presented earlier this fall, when it had proposed service cuts and substantial fare increases in order to balance New York City Transit’s budget for 2005. 

Now they are proposing a “small” increase in fares and no material changes in service.  Better for the short term, but for an agency with long-term underlying problems as serious as the MTA’s, a little extra revenue is the equivalent of a little aspirin for a seriously ill patient.  It provides temporary relief, but it shouldn’t be confused with a cure.   Certainly it is no substitute for the kind of tough examination the MTA must make of its operations and spending habits if we are to have the great mass transit system necessary for our future.
And even the scaled-back proposed fare increases that remain on the table would put new burdens on already hard-pressed commuters.  That is particularly true for express bus riders—and especially for riders on Staten Island, who have the fewest transit alternatives.  While most transit riders would see their MetroCard discounts vanish, express bus users would actually see base fares increase by $10 a week—that’s a 60% hike over the last two years.

So rather than cut essential services, or raise New York City transit fares, or ask for more money from an already-strapped State government, or from a City that faces a $3.6 billion deficit in the coming fiscal year, the MTA must do everything it can to reduce unnecessary spending and increase productivity in its own operations. 

Why take the tough medicine rather than postpone and procrastinate?  I’ll tell you why.  Our straphangers are already strapped.  Unlike the suburban riders of the MTA’s commuter lines, riders of New York City Transit currently pay a much larger percentage of the system’s operating expenses than do customers of any other transit system in the nation. 

Add to this, the fact that on a population basis, the City’s taxpayers contribute a disproportionate amount of the State’s tax revenue.  Thus, they are already subsidizing the MTA to an even greater degree than is their fair share. 

Also consider the following: 

First, the City already contributes about $400 million a year directly to cover MTA operating and capital needs. We are the only local government in the MTA’s service area that has contributed capital monies to the rebuilding of the system over the last two decades. The other 11 counties in the metropolitan area have not, despite benefiting from the resulting improvements to the bus, subway and commuter rail system. 

We’re prepared to continue to support the system’s capital needs in the future.  But the taxpayers of the suburban counties served by the MTA should do their share, too.

Second, it’s also time to acknowledge that in addition to City government’s direct subsidy of the MTA, we also spend more than $200 million a year to keep the subways safe through the work of the Police Department’s Transit Bureau, which has more than 2,600 officers and some 190 civilian employees. 

Their mission is protecting New York City Transit riders 24 hours a day, seven days a week.  They do a superb job.  Today, the subway system is safer than it has been at any time since we started tabulating subway crime statistics nearly 40 years ago.  In 2003, crime in the subways was roughly two-thirds lower than it was in 1997, and we’re on course to maintain those record levels of safety this year as well. 

Third and finally, there has to be the realization that the day has come to reduce the deficit the old-fashioned—and sometimes difficult—way: Cut expenses, and do more with less!  The City has used this deficit reduction technique to address its fiscal problems—and the MTA must as well. 

As I said earlier, NYC has a $3.6 billion deficit in next year’s budget, on a “controllable” base of $15 billion.  Our Administration is addressing that budget gap now, by having City agencies cut spending by 3% this year and 6% next year. We are doing that by meeting the same test we have used for the last three years:  Finding out what we really need, what we don’t, and how the existing workforce can help solve our problem.

That’s the same task that now faces the MTA, which has forecast a budget deficit for 2006 of more than $1 billion on a base of $6.5 billion.  Or, put it another way:  The MTA has a 15% budget deficit next year, and the City has a 20% one. 

Let’s be realistic.  An unplanned, unexpected revenue windfall that would eliminate these gaps is just not likely.  And while we both look to the Federal and State governments for help, we first have to show that we’re doing what we can internally before we can expect any material aid.  The MTA should begin now to consider ways to reduce its administrative bureaucracy, and to increase the productivity of its workforce. 

That cost reduction process is precisely what the budgeting reforms the MTA adopted last year were designed to achieve.   And certainly, there has been progress.  Katie Lapp and Peter Kalikow deserve enormous credit for it.  But there’s clearly also a lot more work to be done.  Let’s stand behind them and give them our support versus spending our time “demagoguing” the system.  

We don’t need the theater of taking the most cherished and politically popular programs and offering them up as the only way to save money.  We all know how to get headlines in the newspapers and advocates on the steps of City Hall for the TV cameras.  It’s time to help Peter and Katie end the games, and face real “either/or” choices—and stop the “more money is the solution to everything” answer.  This time, neither the straphangers nor the city have any more money!

Two weeks ago, State Comptroller Alan Hevesi issued a report showing just that.  It described extraordinary MTA staffing levels in such areas as marketing, accounting, and labor relations. 

The Comptroller found that the MTA employs more than 440 people in legal services, yet still spends $10 million a year on outside law firms.  It also allocates nearly $709 million a year for finance, procurement, technology, and human resources even though an internal audit found that many of the services performed in these areas are duplicative.

Bloated payrolls… out-of-control spending… needless redundancies:  Ladies and gentlemen, this is no way to run a railroad—and no way to earn the trust of the people who ride the nation’s largest bus and subway system, either.

Eliminating wasteful management spending at MTA headquarters will send the same message that everyone, from the top on down, takes budgetary discipline seriously.   But the reality is that for all the savings that can be achieved at the top, the vast amount of money spent by this agency is out on the streets and under the ground—and that’s where business done the old-fashioned way must stop.

It’s time for the MTA to look at what’s going on in the private sector, and in the best-managed parts of the public sector—and then to look in the mirror.  Pick up the financial section of any newspaper, and you will read about corporate retrenchment and restructuring.  The message is clear:  business as usual just doesn’t cut it anymore.

That’s true for corporate executives who have to answer to their stockholders—and it’s just as true for those of us who are accountable to the taxpayers, and fare payers.

Almost three years ago, our Administration came into office facing an operating budget deficit of $5 billion. A year later, that gap had grown to $6.5 billion.  We responded by cutting some $3.4 billion out of City tax levy expenditures.  Then we raised our own taxes by a similar amount and painfully reached into our own pockets to ensure our future.

What were the results?  There are 18,000 fewer City employees this fiscal year than there were when I took office.  At the same time, the quality of life in New York City continues to improve.  The economy continues to expand, job growth has returned to the City, and we continue to drive crime down to historically low levels.  By virtually any measure, the quality of life is better now than it was three years ago. 

The Police Department offers an outstanding example of doing more with less.  The police force has 3,000 fewer officers today than it did three years ago, and has devoted some 1,000 officers to taking on major new responsibilities in counter-terrorism and intelligence.  But by focusing its resources on problem people and problem places, it has continued to keep New York the safest big city in the nation.   

There are other examples as well.  By reducing administrative inefficiency and making better use of technology, the Department of Probation restructured caseloads for probation officers.  That has allowed them to focus on the probationers who need the highest levels of supervision.  The result: Better operations, improved public safety, and a reduction in the agency’s budget that this fiscal year comes to $2 million. 

The Fire Department reduced the number of civilian employees providing administrative and other services, and achieved other management reforms resulting in savings of more than $7 million this fiscal year.   And fire fatalities in New York are the lowest they have been in 75 years.

I could go on, but you get what I’m driving at.  And if we can do it, so can
the MTA.

Labor costs represent more than 70% of New York City Transit’s operating expenses.  That’s something our Administration understands very well.  After all, the services City government provides are also highly labor-intensive.   

That’s why, from Day One, improving the productivity of the City workforce has been one of our Administration’s top priorities.  We’ve pursued it through a greater, better use of technology.  We’ve also made it a central element in our collective bargaining with the municipal labor unions.  

Productivity savings are embodied in the contracts that we’ve reached with unions representing nearly one-half of City workers—including the 121,000 members of District Council 37.  Those contracts have established an essential principle.

The same is true for the MTA and its great workforce. The transit system doesn’t exist for the benefit of its workers, just as the public schools don’t exist for the benefit of its employees.  The focus in the schools has to be on the students, and in the transit system on improving services and keeping fares down. 

Does that outlook win you popularity contests with all of your workers?  As someone who has had very loud picket lines of police officers and firefighters outside his home at 1:30 in the morning, I can tell you, “no.” 

But I can also say two other things:  First, most City workers are New Yorkers.  They want to do what’s right for their families, and also for the city as a whole.  I’m confident that that’s true of New York Transit employees as well.  Making the tough decisions may not get one union endorsements, but it will get their members’ votes.

And second, it makes it a whole lot easier to ask for productivity savings from labor when management has already made a good faith effort to tighten its belt and reduce its “perks” first.  That’s why in our Administration, doing more with less started with cutting the budget of the mayor’s office by 20% during our first fiscal year.  In the two years since, we’ve cut mayoral spending by an additional 15%. 

We have to cut the bureaucracy.  But also efficiencies have to be implemented all the way down the line for the MTA to provide the safe, efficient, affordable service we all need.

Two weeks ago, New Yorkers celebrated the 100th anniversary of our subway system.  The best way to begin the next 100 years for the subways, and for the entire New York City Transit system, is to make this pledge to the system’s seven million daily riders: 

We won’t ask you to pay more until we’ve won your confidence by doing more with less.


Edward Skyler / Jordan Barowitz   ((212) 788-2958)

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