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Giuliani Capital Plan: Transport Spending Defies Reality

by Daniel Convissor
May 18, 1994

The Giuliani Administration says budgetary constraints require a 52% cut in MTA capital assistance. This cut takes place while the administration proposes to increase the entire City capital program by 14% and the DOT program by 18%. This blatant bias defies reality. New York City's economy and environment depend on the subways and buses, but the City would rather lavishly support the roadways. Below, I explain the problems with the Mayor's FY '94-'03 Ten Year Capital Plan and I generate two new spending proposals to improve New York's mobility.

The Mayor's proposal puts transit spending at an all time low. The MTA will only account for 4% of the City's capital commitments, though historically it received twice that. While

=================================================================
MTA & DOT AS PORTION OF CITY'S COMMITMENT


FIRST CAPITAL PROGRAM PERIOD        MTA        DOT    Citywide
City Commitments for Agency     $717 m.  $1,602 m.   $9,580 m.
Percent of City's Commitments        7%        17%        100%


SECOND CAPITAL PROGRAM PERIOD       MTA        DOT    Citywide
City Commitments for Agency   $1,997 m.  $2,794 m.  $20,098 m.
Percent of City's Commitments       10%        14%        100%



THIRD PERIOD (GIULIANI PLAN)       MTA         DOT    Citywide
City Commitments for Agency     $958 m.  $3,283 m.  $22,823 m.
Percent of City's Commitments        4%        14%        100%

THIRD PERIOD (MTA REQUEST)          MTA        DOT    Citywide
City Commitments for Agency   $1,688 m.  $2,553 m.  $22,823 m.
Percent of City's Commitments        7%        11%        100%

THIRD PERIOD (EQUAL DIVISION)       MTA        DOT    Citywide
City Commitments for Agency   $2,121 m.  $2,121 m.  $22,823 m.
Percent of City's Commitments        9%         9%        100%
=================================================================

the increase in DOT spending outpaces inflation, the City's allocations for the MTA don't keep up. The administration's proposal gives the MTA only 23% of transportation dollars, far below its usual share.

========================================
| PAST CAPITAL COMMITMENTS             |
|                                      |
| First Capital Program Period         |
| MTA              $717 m.  31%        |
| DOT            $1,602 m.  69%        |
| -------------------------------      |
| Transportation $2,319 m. 100%        |
|                                      |

| Second Capital Program Period        |
| MTA            $1,997 m.  42%        |
| DOT            $2,794 m.  58%        |
| -------------------------------      |
| Transportation $4,791 m. 100%        |
========================================

========================================
| THIRD CAPITAL PROGRAM PERIOD         |
|                                      |
| Administration's Proposal            |
| The Giuliani Ten Year Plan           |
| MTA              $958 m.  23%        |
| DOT            $3,283 m.  77%        |
| -------------------------------      |
| Transportation $4,241 m. 100%        |
|                                      |
| Proposal One                         |
| Meeting MTA Request                  |
| MTA            $1,688 m.  40%        |
| DOT            $2,553 m.  60%        |
| -------------------------------      |
| Transportation $4,241 m. 100%        |
|                                      |
| Proposal Two                         |
| Equally Dividing Transport Spending  |
| MTA            $2,121 m.  50%        |
| DOT            $2,121 m.  50%        |
| -------------------------------      |
| Transportation $4,241 m. 100%        |
========================================

I put forth the following two proposals to stimulate informed discussion and action. These proposals spend the same amount on transportation as the Ten-Year Plan, but divide it between the DOT and MTA in a different manner. Proposal One meets the MTA's $1,688 million request for their Third Capital Program and gives the remainder to the DOT. The MTA's request is a reasonable one, asking for a 15% reduction while the DOT is cut only 9%. Proposal Three equally divides the transportation pie, yielding a 6% increases for the MTA but a 24% cut in DOT commitments.

==========================================================
CHANGE BETWEEN CAPITAL PERIODS
          
                                MTA           DOT
Second                    $1,997 m.     $2,794 m.
Third (Financial Plan)      $958 m.     $3,283 m.
-------------------------------------------------------
Change                   ($1,039 m.)      $489 m.
                               (52%)          18%
          
                               MTA            DOT
Second                   $1,997 m.      $2,794 m.
Third (MTA Request)      $1,688 m.      $2,553 m.
-------------------------------------------------------
Change                    ($309 m.)      ($241 m.)
                              (15%)          (9%)
          
                               MTA            DOT
Second                   $1,997 m.      $2,794 m.
Third (Equal Division)   $2,121 m.      $2,121 m.
-------------------------------------------------------
Change                     $124 m.       ($673 m.)
                               6%            (24%)
          

All Projects in City Capital Program
Second                   $20,098 m.
Third (Financial Plan)   $22,823 m.
---------------------------------------
Change                    $2,725 m.
                                14%
============================================================

The Giuliani administration's autocentric bias will hurt New York City. Transit has tremendous advantages over roadways:

Bigger & Quicker Payback: Net private capital accumulation generated by railroad investment is twice as large as highway investment and accrue positive results three times faster.
Lower Costs: Building rail transit requires one-sixteenth the cost of highways to move the same number of people. Transit riders don't need their own vehicles or parking spaces, so capital and operating costs can instead be spent on new buildings, goods and services.
Less Space Wasted: Transit moves eight times more people in a given space. There will also be smaller spacial demands for parking, thus more land can be used for public and private uses.
Boosts Local Spending: Of every dollar spent on gasoline, ap- proximately 85 cents leaves the region. Eighty cents of each dollar spent on mass transit fares supports the transit employees, who live and spend their wages in the region, generating $3.80 in further economic activity.
Improves Quality of Life: Mass transit is well complemented by walking and cycling, for there are fewer cars and shorter distances to travel. These factors combine to make the community quieter and less congested, creating a more enjoyable place to live, encouraging more people to move here.
It's the Way New Yorkers Travel: The MTA is used for over 50% of trips in NYC but the administration wants to give them only 23% of transport spending. Thus, the Giuliani Plan ignores the way New Yorkers travel.
It's What Everyone Wants: The Empire State Report asked New York City residents: "If you had only two choices spend more money on better roads and highways or spend more money improving transit like subways, which would you prefer?"
- 59% said more on mass transit
- 30% said more on highways

The City Council, the Mayor and the Office of Management and Budget must make a budget that meets or exceeds the MTA's $1,688 million funding request if we want to bolster the economy and attain compliance with environmental regulations, thus, improving quality of life for all New Yorkers.

TECHNICAL NOTE: This analysis groups spending into three five year blocks, matching the MTA's first three Capital Programs. The First Period is City Fiscal Years '83-'87, the Second is FY 88-'92 while the Third is FY '93-'97. Figures for FY's '83-93 are actual commitments, as recorded in the Year End edition of the Monthly Transaction Analysis while FY's '94-'97 are projections from the new Ten Year Capital Plan. Commitments are contracts registered, committing the city to pay the cost when the services contracted for are rendered.

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- Giuliani Capital Plan: Transport Spending Defies Reality. Analysis of the Mayor's May 1994 capital plan
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Last updated: 17 April 1999