Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
New York City’s Infrastructure Is a Mess. Who Is to Pay?
Bloomberg News/Businessweek ran an extensive piece about the potentially disastrous condition of Penn Station in New York City and the perilous state of the two Hudson River tunnels that feed it. The tunnels are over 100 years old. The construction fill from the original World Trade Center that was used to create new land changed the course of the Hudson in such a way as to erode the river bed above the tunnels. Hurricane Sandy partly filled the tunnels with salty water, and the salt deposits are eating away at the elderly concrete.
The tunnels now carry far more people than they were ever envisioned to carry into the busiest single train station in the United States, so closing them for repairs would congest commuter traffic horribly, and projects to construct newer tunnels to supplement these aging ones have never come to fruition. So the author of the piece, Devin Leonard, details in his article:
As the gateway to America’s largest city, Penn Station should inspire awe, as train stations do in London, Paris, Tokyo, and other competently managed metropolises. Instead, it embodies a particular kind of American failure—the inability to maintain roads, rails, ports, and other necessary conduits. For generations, the officials connected to Penn Station have been blind to, or unable to deliver on, the idea that improving the station would more than pay for itself. (One estimate, from the Business Roundtable, says that a dollar invested in infrastructure yields as much as $3 in economic growth.) In the final days of 2017, the situation reached perhaps its bleakest point yet, when the Trump administration signaled its disinterest in coming to the rescue: The president will not honor an Obama-era commitment to New York and New Jersey to foot half the cost of a new tunnel, dumping planners back at square one. [emphasis mine]
Mr. Leonard concludes his piece with a repetition of what I have highlighted above. The question ultimately is, who will pay? Or rather, who should pay? As Mr. Leonard details at length in the article, New York City itself, New York State, and New Jersey have all had ample opportunities to fix Penn Station and the tunnels over the last 30 years, and yet they have never done so.
Penn Station is a debacle reaching across time. Its past is a slow-motion disaster of inaction and canceled reforms, its present an ongoing disgrace. And its future could be truly catastrophic, in the form of a tunnel failure that pinches shut one of the most vital economic arteries in America.
Of course, Amtrak somehow owns the station and the tunnels, and (pardoning the pun) Amtrak’s track record of repairs and self-improvement is hardly inspiring. Amtrak is a creature of the federal government, a Frankenstein’s Monster of its own creation. By that argument, the US Government should really be on the hook for fixing the station and the tunnels. Yet the tunnels are primarily used only by those working and living in and around New York City. Commuters to and from New Jersey, Amtrak riders coming to or leaving the city, and of course tourists are the chief customers. Should they not pay for what they are using? It seems that, at least in part, New Jersey commuters have contributed to the system’s overgrowth and overuse.
The addition of New Jersey Transit trains in the 1990s was both an economic boon to the region—I bought a house in Maplewood, N.J., in 1996 so I could ride the new Midtown Direct to work—and the beginning of Penn Station’s transformation from mere malodorous eyesore to Hieronymus Bosch-grade hellhole. With Jersey commuters swarming the place, farsighted politicians presented grand visions for upgrading it. They all failed.
It should be obvious that Mr. Leonard has no great fondness for the station (and I do admire his colorful metaphors for it). What follows in his article is a listing of all the major proposals to fix it, going back to a 1990 proposal from the late Sen. Daniel Moynihan. National catastrophe (9/11), political scandal (Eliot Spitzer’s fondness for hookers, John Corzine’s own corrupt administration), or political calculation (New Jersey Governor Christie’s canceling of funding) managed to kill every attempt, and now the Trump administration has killed an agreement that the Obama administration has made too.
But really, who should pay for it, if the situation is as dire as Mr. Leonard claims? New York City is moving ahead on a new station annex, the one originally championed by Moynihan, but is the station as vital as the tunnels that feed it?
But the $1.6 billion Moynihan Train Hall, as it will be known, isn’t likely to significantly reduce congestion, according to NYU’s Moss. Amtrak and LIRR passengers will still be able to access the train complex from the existing Penn Station, which is a block closer to the center of Manhattan. (The Cuomo administration says the impact will be greater.) Moss is among those who scoff at the idea of prettying the upper-level train station experience when what lies beneath is a such mess. “We don’t need a transit temple,” he says. “We need to focus on the tunnels and getting more tracks into Manhattan.”
While I’m not generally sympathetic to libertarian arguments about private roads, there are always exceptions. This, I would argue, is a major one. Rather than wheedling federal handouts to fix a tunnel of primarily local significance, why cannot New York and New Jersey simply sell tunnel rights to a private corporation, and let them finance it, construct it, and collect tolls, fees, and taxes from it?
Amtrak has been around, zombie-like, longer than I’ve been alive and to nobody’s benefit except in the Atlantic northeast, since politicians ultimately control its routes and rights of way. So, it should be kept away from any tunnel project as one would keep away a smallpox carrier. Let the private sector take over this mess, and let those who use it also pay for it, instead of spreading the pain amongst the US at large, or the entire tax bases of New York and New Jersey.
If more tracks are needed for Manhattan, then get the government out of the business of building them, for it is apparent that they are incompetent to do so.
Published in Economics
I said ‘much’. I daresay it’s a higher percentage than at least most of the other lines on the list.
There are actually two separate issues here: Passenger stations and the tunnels. Let NY and NJ fight out how much each of them should pay to fix commuter rail infrastructure. But the tunnels also are an important economic question for the country, because they have become a freight bottleneck for the entire northeast. IIRC, some 1/3 of freight entering the region, serving a significant proportion of the country’s population, passes through those tunnels. A failure to repair them could be catastrophic for the region and have ripple effects across the US economy.
Everything is connected to everything.
That’s fascinating – I would have thought that freight traffic, if not intended for NYC, would bypass the city. Is there enough rail structure around Manhattan to divert, or is it a case where they’re using every rail available? I know Ohio’s rails have been at capacity for years.
I’m reminded of one of my favorite newspaper headlines of all time;
Remember when the Dow down 12 was considered a headline-deserving “skid”?
Why can’t they? Unions. Plain and simple. NYC can’t do anything because of the financial burden of paying the salaries, benefits and pensions of public sector union employees. I can’t think of a municipality in NYC or even NYS that isn’t completely corrupt. That includes private company unions as well. Everyone is on the come in NYC, which is why it’s so hard to build or repair anything.
Let it.
The long term problem of a populace that believes the feds need to be involved in every local problem has already been bad for the country. I’m willing to take some short term economic pain to partially sort out that mess.
I also think that any financial responsibilty has been squandered by the Port Authority and MTA regarding the rail system (amtrak is another issue). If there was any fiscal sanity in these departments the tolls should be more than enough to maintain the infrastructure, but the corruption is deeply ingrained.
The only solution to this problem is to privatize the whole system, in my opinion. Even if the Federal government takes over, the budgets will be inflated, the timelines will take forever and we will be in the same predicament, except now it’s costs the whole country a fortune rather than some Northeastern states. It will turn into the Big Dig in Boston.
Perhaps, the only hope would be the Trump administration would take it over and privatize it, but that probably won’t happen. I’m not optimistic
Indeed. Plus, when critical infrastructure fails, all the regular obstructors get bypassed in the rush to fix it. Atlanta’s interstate crisis (fire-triggered collapse) is a recent example. It’s remarkable how efficient a DMV can be when angry citizens are watching every move, insisting on a rapid fix. And the news media has a non-political way to make money for some weeks. (-:
Nothing could possibly disappoint the media more!
They do politics not to profit, they profit in spite of their politics.
I happened to catch the start of Wolf Blitzers who on CNN yesterday. His first 3 -5 stories where politics, the death and destruction in California (landslides) was pushed back into the second block! They’re not leading with the bleeding anymore.
Trump said the magic words “Infrastructure bill”. Now starts the PR campaigns as every political entity around the country jockeys for position to steal as much of the pork as they can siphon off. Look for a bunch of we have it so bad, horror stories until the bill gets created and all the politicals get theirs.
That’s a feature, not a bug. One thing the Left excels at is making laws and then litigating them. With a much smaller government, tax lawyers, regulation wranglers and litigators (who by strange coincidence are mainly Democrats) would need to find new work.
This and all the NYT “hair on fire” coverage of late is part of an orchestrated NYC design to get its BLUE State infrastructure issues on the plate of the “hometown” President for the upcoming
Spend-A-Thon.
I had pretty much the same conversation at a breakfast this morning in Meridian. I was able to talk about the rail fiascos in San Jose/Silicon Valley and Los Angeles, and a bit of what may happen with self-driving vehicles now coming along. Might have made a convert…
Remember when Presidents understood that Congress has to pass things? I’m still wondering under what authority Barry gave the Italians Chrysler.
That was the 2nd best thing that Ford did. Its unfortunate that his successors havent been as stingy with the bailouts.
Remember when a newspaper was 15 cents? Me either. The keyboard doesnt even have the cents symbol anymore.
Sure hope they put that plan to a vote before moving forward with it.
My sister and I got significantly bombed in Paris, once.
You might even say blitzed.
Sad I missed this conversation yesterday, very interesting topic.
For me it’s nearly the opposite: I consider myself fairly libertarian, but this is one example where government may be the most efficient solution.
I think privatization of public services works best when the factors which make the free market thrive are at hand: for example, competition, ability to make decisions and set prices autonomously, the ability to fail, etc.
A project like this is nearly the opposite: it’s essentially too big to fail, there will be little competition (both because there are few service providers capable of tendering a bid and because the tunnel will be a de facto monopoly), many of its major customers will still be government payers, and the planning/construction process will still involve incredible amounts of government input. When you factor all of this in, even a private consortium which builds/operates a new tunnel will essentially morph into a government agency.
I see many similarities between a huge infrastructure project like this and the F-35: Lockheed Martin essentially has no competition (anymore), the project is too big to fail (since it’s the only replacement fighter/attack aircraft for the entire armed services), and the different branches of the military are constantly telling L/M to make changes to the project. The result is the worst of both worlds.
I recognize how badly major underground infrastructure projects in coastal cities have fared recently. But I think most of the negative factors present in those projects would still exist even if the tunnel construction/operation was “privatized”.
That being said, I see little to no role for federal funding in a situation like this. The tunnels and stations primarily serve the metro NY region, and that region already has an infrastructure manager in place (Port Authority) to integrate the rail line into its broader network.
The most generous step the federal government could take would be to relinquish ownership of the tunnels, Penn. Station, and to the city/PANYNJ with a minimum guaranteed fee for Amtrak trains using the facilities.
I believe that is incorrect:
“The Selkirk Hurdle” — sounds like something that should have a Difficulty Score attached to it.
The users should pay. Certainly not people in Indiana, or Kansas who will never use it.
Yes, this applies to interstate highways too. They should all be toll roads. If users have to pay, they will consume less. This applies to everything. Not only do tolls provide financing, they encourage car pooling, or moving closer to work. They can also be used to encourage non-peak use.
It’s like most things. People and business in New York benefit from good infrastructure and suffer if it deteriorates. Take away subsidies and they’ll sort it out. Leave the subsidies in place and interests will grab them because New Yorkers aren’t paying for it. The basic requirement is you get what you pay for and if someone else is paying for it somebody else or many somebodies will get the rewards. There is no way around this. That is why privatization works. Even government could work if we were to follow this simple rule. It takes time, of course, corruption is deep and inertial.
No, No, No!
Public roads, open to all without toll or hindrance, are a fundamental driver of economic activity. An introductory course in economics will tell you that as much as 40% of the end-user cost of any product is the collection of transportation costs in it and all of its components. Denizens of the third world who understand this are envious of our rails, ports, and highways above all else. Putting a toll on all public highways would lead to us rejoining the third world.
The blue states of the northeast and midwest are cases in point. They are putting tolls everywhere, and it isn’t helping. Yeah, blue states strangle their economies in many other ways, but proliferation of toll roads is a big one. That anti-infrastructure extremists have made inroads into conservatism is a shame and long-term disaster — for conservatism and for our country.
On top of all that, the modern systems of toll collection make Big Brother wanna-bes squeal in delight.
I don’t see the toll roads around Chicago hurting the economy of the city. There are financial problems in Illinois, but nobody has ever attributed them to the toll roads. There is even a spanking-new toll road around Houston, the city that doesn’t have zoning.
Just because roads are important to economic activity doesn’t mean users shouldn’t pay for their usage in some proportion to their use of those roads. Economic activity generates revenue, and some of that revenue is to cover the costs. Energy is also important to economic activity, and we don’t therefore demand that electricity and gas be publicly funded.
Of course, putting tolls on all the public roads would be foolish. It’s difficult to imagine how that could work. In the Great Lakes states townships are in charge of some roads, counties are in charge of others, states are in charge of main roads connecting the various parts of the state, and U.S. roads connecting the states together. And in most cases the financing is shared. Our township pays 70 percent of the maintenance of the 65 miles of paved roads we have, and the county pays 30 percent. It’s possible that some of that 30 percent is from state funds; I’ve been meaning to ask our county commissioner about that. And sometimes county roads are eligible for some federal funds. It’s a system that might be a little out of whack, but not by a lot. (The feds help fund boring local roads with wide ditches; locals like our tree-lined roads but are in constant tension with the safety people over that, and the latter are aided and abetted by the feds.)
Roads used to be an entirely local affair, and that didn’t work so well. There is a lot of written history about it. There is also information, maybe not gathered in one place, about the failures of the private toll roads of the mid 19th century. @mattyvan sometimes has interesting information about these topics.
Actually, the current incarnation of Penn Station is the ‘wonderful post-War train station’. The original Pennsylvania Station was an ornate Beaux Arts building demolished in 1963.
The Indiana Toll Road is the best highway in the state, plus it doesn’t cost the taxpayers a cent. In fact when the lease was signed, they paid the state nearly a $billion.