(Original photo by Wikimedia User “Whisper of the Heart” used under CC BY-SA 4.0)

The New York City Metropolitan Transit Authority, as we all know (even SEPTA riders like myself), is a hot mess which is getting worse by the day. Trains are delayed by overcrowding, or cancelled, leading to even more overcrowding. Tracks catch on fire and take whole lines out of service. When it rains, torrents of water pour into stations and train cars. Trains derail in tunnels, stranding riders and forcing evacuations. Hundred-year old infrastructure handles crush loads of people each day, on fifty-year old subway cars. Obviously, change needs to come quickly, and that change will be expensive.

Governor Andrew Cuomo declared a “state of emergency” for the MTA on July 30th, which gave the MTA broad authority to sidestep its own procurement process to allow for quicker repairs to be made, and allocated a one-time payment of $1 billion on top of the MTA’s $32.5 billion capital budget for FY15–19. This is a nice gesture, but how far will $1 billion go, when the cost for the MTA to, for instance, paint (not repair or replace, but just to paint) elevated structures across the system is $266 million? One billion dollars is just not enough to bring real change to the system — higher and sustained levels of funding will be required for that, and the political will to provide money for basic maintenance is slim to nonexistent.

Critics of MTA’s operations frequently claim that the system could be brought up to snuff if the MTA just stopped spending so much money and find some unnecessary budget line items to cut. Or to privatize the whole system — maybe even split it into two companies, and maybe call them something like “Interborough Rapid Transit” and “Brooklyn-Manhattan Transit”. Others claim that the system is not worth fixing and that the private sector will save us through driverless cars and underground high-speed car sleds.

Most frequently though, the primary target for criticism is labor: they want the MTA to get rid of Long Island Railroad and Metro-North conductors, to automate the L train (and others) and fire train operators, to slim down on station staffing and contract out custodial and other maintenance services, and to cut pay and benefits and cancel regular wage increases. Government bloat and unions are the problem, these critics allege, and greedy workers are making our commute miserable while the MTA drags its feet on making repairs through procurement processes and project management.

I too think there’s room for savings in the MTA’s budget, but I would pick a different target to attack: capital.

The fact is there is quite a large budget line item which benefits almost no MTA passengers or employees, and has very little material benefit to the system, to the tune of $2.2 billion per year, but which no liberal critic will touch. This is the debt service on the MTA’s $34.1 billion debt obligation, which has been racked up through previous emergency and regular repairs, rolling stock procurement, and large capital projects like LIRR East Side Access and the Second Avenue Subway.

$2.2 billion per year is a lot of money — about 17% of the MTA’s operations budget. MTA’s debt is composed of long-term, low-interest bonds, with some of the most recent issued not reaching maturity until 2050. Where is all this money going to? Banks, institutional investors, and pension funds and the like — guaranteeing small but steady returns for the long-haul.

This is where a value judgement needs to be made. Can we justify using $2.2 billion in MTA fare revenue each year to provide returns for the bankers, while the system is falling apart? Or could we, say, defer debt service until such time that the system is in a state of good repair? $2.2 billion per year, over a 4-year capital projects plan, is $8.8 billion, about a quarter of the MTA’s current 4-year capital budget. This money could easily cover and accelerate all emergency repairs needed, plus fund additional capacity improvements and new rolling stock to bring the system to a state of good repair.

This is tantamount to bankruptcy of course, which conventional wisdom would call absurd since the system is clearly willing and able to pay for debt service even while it cannot pay for timely completion of essential repairs. A re-ordering of priorities is clearly in order: the MTA should place the welfare of its riders above that of its creditors. This would of course tank their credit rating and make future investors think twice about purchasing MTA bonds, but it’s unlikely that banks will descend on Coney Island Yard and repossess all the R160 cars or some other stunt like that which would really disrupt service. Bankers depend on the MTA too, after all — even if they try it, they’ll start feeling it themselves when their employees stop showing up for work in the Financial District because the bridges are clogged and the trains aren’t running.

Even the MTA’s credit rating could be somewhat protected if the state’s “state of emergency” declaration ordered the MTA to suspend debt service payments and redirect that money to critical repairs. (Of course, it didn’t, because the state is just as beholden to capital as the MTA.) The fact is that the money needed for urgent repairs is already there, it’s just going to line the pockets of the bondholders. State-of-good repair projects can and should be prioritized ahead of bondholder interests, and are in fact in the bondholder’s best interest in the long term, since a subway in a state of good repair is both cheaper to run and able to handle more passengers, resulting in higher fare revenue. The bond that matures in 2050 might be delayed to 2060 — but with the result of a more reliable, higher-capacity, and faster MTA.

The fact is that rider satisfaction is at an all-time low, and liberal capitalism and government is clearly unwilling to provide any capital to remedy the problems plaguing the MTA, even while it directly affects the physical areas where capital is concentrated. There’s no real solution to any of the MTA’s problems in sight with the current federal government’s incompetence and the state’s unwillingness to act. Political action will only be spurred by some major disaster — one I’m sure riders would prefer not to be involved in.

Capital has, in the past, been unwilling to save even the city itself: in 1975, the bankers simply stopped showing up to purchase municipal bonds in NYC, and the city went bankrupt. Bankers then effectively took control of the city through the state-appointed Emergency Financial Control Board and implemented severe austerity policies over the objections of the actual city government.

Perhaps it’s time to return them the favor and give them some austerity of their own? We cannot allow the interests of a few bondholders to hold the primary mode of transportation for millions of New Yorkers hostage. Whether this can be achieved through rider unions, or transit worker unions, or even unilateral action by the MTA itself I do not know, nor do I know the details of the precise legality of such a move. What I do know is that the system cannot afford to allow the crisis to continue and help will not come in time to avert whatever major disaster lurks around the corner. It’s time to defer the payments, and rebuild the system.

Passengers have nothing to lose but their trains. Seize the MTA.