Should the MTA Take Over
Seven Private Bus Lines?
If So, Who Pays the Piper?

February 23, 2004
Henry J. Stern

One problem in writing about public issues objectively is that situations are often more complicated than they appear. Today we look at the private bus lines that operate mostly in Queens.  Although the trend today is to privatize the delivery of some public services, this proposal calls for government to assume management of a service currently provided by private operators of varying abilities and resources.
 
The mayor is currently embroiled in controversy with the MTA, as Glenn Thrush reports in Newsday and David Andreatta in the Sun. The issue is the future of seven privately owned bus lines, five of which primarily serve Queens. The two that do not are Liberty Lines and New York Bus Service; the five that do are Command Bus, Green Bus Lines, Jamaica Buses, Queens Surface and Triborough Coach. These lines have been privately operated since they were founded early in the Automotive Age, and for at least the last thirty years, there have been proposals for a public takeover. Their operations would be merged with the MTA, which also runs buses in Queens. Normally, such a merger makes financial sense in reducing operating costs, allowing economies of scale, cutting overhead, eliminating duplication of routes and service, and all the other conventional reasons why transport companies merge.
 
This situation, however, is more difficult to resolve. For one thing, the city now subsidizes the operating cost of the private bus lines at about $110 million (not counting capital expenditures for new buses), and the state provides $52 million a year. For another, only two of the five private companies own their own garages, the others rent. In addition, there are brownfields liabilities for old bus depots (imagine how much used oil has soaked into the soil of Queens over the generations). The private lines own 1291 buses, with an average age of over twelve years, while MTA buses average six years old. Six hundred of these buses will soon have to be replaced, at a cost of about $400,000 each. This will cost $240 million. The salaries of bus drivers would have to be adjusted, and seniority rights determined. When public salaries are equalized, the higher salary customarily prevails. The takeover of private bus lines would increase the number of MTA-operated buses by about 25 percent, which will raise expenses proportionately.
 
To help balance the city budget, the mayor proposes to end the existing subsidy to private bus lines. He is indignant that the MTA has just committed $231 million to buy brand new trains for Metro North, which serves the northern suburbs east of the Hudson. He wants the city to receive its fair share of local bridge and tunnel toll revenues, which now go disproportionately to suburban governments. In his Daily News column, Richard Schwartz recounted these inequities.
 
Of course, one cannot expect the MTA (a creature of the Governor, who appoints most of its members) to assume new and expensive responsibilities for Queens bus service, and lose its city subsidy at the same time.  But the mayor is taking a bargaining posture in dealing with an overall situation in which the city has for a century been exploited by the state, with suburban legislators of both parties stepping on the city's fingers when needed to protect their own interests.

In the legislative crime of the last century, on May 17, 1999, the city lost its commuter tax due in part to Governor Pataki and Senate Leader Bruno, from whom such an action could have been expected.  But the Democratic Assembly joined in the repeal with the vigorous support, including arm-twisting, of Speaker Sheldon Silver, who was the Brutus in the adoption of a measure which in five years has cost Caesar's city over $2,500,000,000 (that's two and a half billion dollars). Why do I obsess over this?  Every day the City loses another $1,500,000 as a result of this monumental misjudgment, for which there has been neither apology nor atonement from its principal perpetrators.
 
It will be interesting to observe whether the Democrats, who ritually denounce the mayor for not standing up to state officials, will commend him now that he has done so. Please inform us of any such statements you may read or overhear.  We will put them on the website.

Meanwhile, resolution of the Queens bus issue will probably have to be part of a larger financial settlement between the city and state. I remain skeptical whether, with four players involved, Pataki, Bruno, Silver and Bloomberg, such an agreement can be reached this year. But stranger things have happened, like last year's legislative overrides of the governor's budget vetoes. Will any of the four musketeers will be odd man out in 2004? Or will they cling to their irreconcilable positions as if they were clutching chandeliers?