April 18, 2016 8:34AM

NY MTA to APTA: Quit Wasting Our Money

The New York Metropolitan Transportation Authority (MTA) has formally quit its membership in the American Public Transportation Association (APTA), the nation's principle transit lobby. In a harshly worded seven-page letter, MTA accused APTA of poor governance, an undue focus on small transit agencies, and having an embarrassingly large compensation package to APTA's president.

The MTA and its affiliates, Metro North, the Long Island Railroad, and New York City Transit, together carry 35 percent of all transit riders in America. Since MTA's ridership has been growing while transit elsewhere has declined, this percentage is increasing.

Yet APTA's focus has been on lobbying for increased funding for smaller agencies, including building new rail transit lines in cities that haven't had rail transit and extending transit service in smaller cities and rural areas that have had little transit at all. As a result, says the letter, MTA has been short-changed by roughly a billion dollars a year in federal funding that it would have received if funds were distributed according to the number of transit riders carried.

This accords with the finding of a Cato policy analysis that found that New York has been shorted half a billion dollars a year in discretionary transit funds. Since discretionary funds make up less than half of all federal transit funds, it is easy to imagine that the nation's largest urban area is losing a billion dollars a year to smaller cities that are not making effective use of those funds.

The letter observes that APTA's executive committee, which makes most month-to-month decisions for the group, has up almost no representatives of "legacy systems," meaning transit systems that had rail transit before 1980. The committee is thus biased towards smaller systems where transit spending is less needed and/or less effective than in big urban areas such as New York, Chicago, and Philadelphia.

The legacy systems, the letter notes, all have "State-of-Good-Repair needs that are an order of magnitude greater than the non-Legacy rail systems." Yet APTA's focus has been on building more rail lines rather than funding the maintenance needs of the legacy systems.

MTA's APTA membership fee of more than $400,000 a year is only about 2 percent of APTA's annual budget. The transit agency that carries more than a third of the nation's transit riders could get away with contributing only 2 percent of the transit lobby's budget because APTA has lots of "associate members" that aren't transit agencies. Yet even this is a sore point with the MTA, as those associate members are mainly contractors, many of whom make their money from designing and building new rail transit lines, so their influence further dilutes the interests of the MTA and other legacy systems.

The letter concludes with what it calls the "elephant in the room," the subject of which (it says) was the cause of "acrimonious discussions at the board level" over the compensation for APTA's president and CEO. APTA's 2014 IRS report reveals that it paid its president a whopping $892,471 in 2013, not counting another $57,248 in benefits. To many agency officials, this extremely high salary seems incongruous at a time when most transit agencies are having to cut their spending in response to the reduced tax revenues associated with the recent recession. For MTA in particular, this excessive compensation seems particularly galling considering it hasn't resulted in greater federal funding for MTA at a time when MTA's ridership is growing relative to that of the rest of the country.

This letter reflects an age-old battle within the transit industry: should the industry concentrate on providing transit in areas where transit usage is highest, or should it focus instead on trying to generate new transit riders in areas where usage is minimal? On one hand, per capita transit ridership is falling almost everywhere, even New York, so if the industry is to grow some efforts must be made in attracting new customers. On the other hand, the industry is clearly subject to diminishing returns: that is, the cost of getting each new customer is increasing.

One reason for that increase is the industry's questionable strategy of spending huge amounts of money on high-cost infrastructure including light rail, streetcars, and exclusive bus lanes. Far more riders could be gained by spending the same amount of dollars on improvements to basic bus transit. But here is where APTA's associate members come in, as they have a clear interest in promoting new infrastructure construction rather than expanded operations on existing infrastructure.

To be fair, APTA has to deal with the political environment in Washington, D.C., an environment that favors new construction over maintenance and at the same time favors distributing dollars to as many states and congressional districts as possible. In this environment, it could be argued, the natural outcome is to favor smaller urban areas over big ones such as New York.

But if this outcome is preordained, MTA might ask, then what good is APTA in the first place? The answer appears to be that APTA spends $20 million a year churning out press releases taking credit for decisions and results over which it, in fact, has little or no control. At least some transit supporters think that APTA could have done more to help its members find ways to spend money in ways that would more effectively attract new transit riders, although doing so might have lost APTA some of its associate members.

Since MTA's annual fee represents such a small part of APTA's budget, its departure will have little impact on APTA's funding unless it is followed by similar resignations by other legacy systems. But the dent in APTA's reputation may be more severe and may force APTA to reconsider its policy of promoting new construction over operation and maintenance of transit systems in the cities that most heavily use transit.