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Metropolitan Transportation Authority Business Information, Profile, and History

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New York, New York 10017-3739

History of Metropolitan Transportation Authority

The Metropolitan Transportation Authority (MTA), a public-benefit corporation chartered by the state of New York, operates North America's largest transportation network, serving--in the year 2000--a population of 13.2 million people in a 4,000-square-mile area in and around New York City. MTA subways, buses, and railroads move 1.7 billion people a year&mdashout one in every four users of mass transit in the United States and two-thirds of the nation's rail riders. MTA bridges and tunnels carry more than 250 million vehicles a year--more than any other bridge and tunnel authority in the nation. The MTA is governed by a 17-member board chosen by the governor of the state of New York, the mayor of New York City, and the executives of seven New York counties in the vicinity of the city.

Rescuing a 'Collection of Losers': 1965-73

The increasing reliance on the automobile for transportation in the New York City metropolitan area following World War II resulted in a decline of ridership in mass transit. By 1960 it was clear that the remaining privately owned bus and rail lines would not long survive. In 1965 the state of New York established the Metropolitan Commuter Transportation Authority to purchase and operate the bankrupt Long Island Rail Road (LIRR), which was carrying 80,000 commuters to the city each workday. The MCTA purchased this line from the Pennsylvania Railroad for $65 million in 1966.

By this time, following a strike of New York City's subway and bus lines and a costly labor settlement, political pressure had mounted to integrate the city's Transit Authority into a state-supported system. After voters in late 1967 approved a bond issue yielding $1 billion for mass transportation, the MCTA was reorganized as the Metropolitan Transportation Authority and given the mandate to direct the operations, financing, coordination, and planning of city and commuter transportation facilities. (Links between the city and New Jersey, however, remained under the jurisdiction of the bistate Port of New York Authority.) The MTA now assumed direction not only of the Transit Authority (including its subsidiary for the bus lines, the Manhattan and Bronx Surface Transportation Operating Authority) and the LIRR, but also the Triborough Bridge and Tunnel Authority, whose surplus toll-generated income from seven bridges and two tunnels could be used to help support the LIRR and the city's subways and buses.

New York Governor Nelson Rockefeller appointed William Ronan, his chief aide, as first chairman of the MTA. They pledged to modernize the city's transit system for $2.9 billion, and in that year the MTA's first 100 air-conditioned subway cars went into service. In 1969 the state, for the first time, made a direct financial grant to the system, providing one-tenth of the projected $1 billion needed for the construction of a proposed Second Avenue subway line in Manhattan. The LIRR was receiving the first of a fleet of 620 electric-powered cars. In August 1969 Rockefeller promised to make the trouble-plagued LIRR the 'finest commuter railroad in the world'--and proclaimed the goal achieved only two months later, to much derision.

In 1971 the MTA and Connecticut's Department of Transportation took over operation of the commuter lines of the bankrupt Penn Central Transportation Co.'s New Haven division. The MTA, which had already agreed to buy 144 new electric cars for the line, also leased Manhattan's Grand Central Terminal from the Penn Central for 60 years. In 1972 the MTA completed the takeover of the Harlem and Hudson division commuter lines from the Penn Central but allowed the company to continue operating these lines. The 14.5-mile Staten Island Rapid Transit was purchased by the city from the Baltimore & Ohio Railroad in 1971 and turned over to the MTA to run. In 1972-73 the MTA took over the operation of ten previously private bus lines in Nassau County, establishing the Metropolitan Suburban Bus Authority as a subsidiary. The MTA also took over operation of two commuter lines running between Hoboken, New Jersey, and Port Jervis and Spring Valley, New York, respectively.

Some progress was made during these years. The LIRR sported all air-conditioned cars for the first time and improved its formerly dismal on-time performance. Excavation work also began on the Second Avenue line. But in spite of fare increases--including the first-ever bridge and tunnel toll hike--and nearly $400 million a year in city, state, and federal subsidies for operating expenses by 1974--the MTA's deficit grew from $44 million in 1969 to $325 million in 1973. Ronan called his agency's component parts 'the biggest collection of losers ever assembled under one roof,' according to Robert H. Connery and Gerald Benjamin, authors of Rockefeller of New York. Work on the Second Avenue subway stopped in 1975, as New York City fell into near-bankruptcy.

Back from the Brink: 1976-95

The MTA got a break when the Consolidated Rail Corp. (Conrail), a newly created federal body, assumed responsibility for operating the three former Penn Central commuter lines in 1976. But in 1982 the MTA had to reassume control because Congress had decided Conrail should not be responsible for passenger services. The operation now received the name Metro-North Commuter Railroad. Meanwhile, in 1979, the city's subways and buses reached their nadir, according to one account. Despite a 12-day strike in 1981, followed by two fare increases, the subways and bus lines were in better shape by the time Richard Ravitch ended a four-year tenure as MTA chairman in 1983. Ravitch said he was most proud of assembling about $8.5 billion in federal, state, and local financing to rebuild the metropolitan area's mass-transit system. This sum included $6.5 billion for the city's subways and buses over the next five years.

During the succeeding seven-year tenure of Richard Kiley, the city subway and bus fare first reached, and then, exceeded $1. There was a six-week Metro-North strike in 1983 and a two-week LIRR strike in 1987. All of the LIRR and Metro-North cars, and 90 percent of the MTA's subway cars and buses, were replaced or rebuilt, however, and most of the 2,000 miles of MTA rail and subway track also were replaced. Completion of a tunnel under the East River brought subway service to Roosevelt Island for the first time. The number of subway breakdowns and derailments fell dramatically. After a five-year effort, the entire subway and bus fleet was declared graffiti-free in 1989. Subway ridership--two billion annually in the 1940s--began rising again after dropping to less than one billion in 1983.

New York's legislature appropriated $9.6 billion in 1993 for the MTA's third capital-improvement five-year plan. Although the program called for 184 new LIRR cars, most of the money was allocated for new subway tracks, switches, and signal lights, and to rehabilitate one out of every five subway stations. The riders also were tapped for more money, with the city subway and bus fare reaching $1.50 in 1995, after the state declined to commit any further funds to the capital program. Motorists were hit in 1993 for the seventh toll increase in 13 years, paying as much as $6 to cross the Verrazano-Narrows Bridge between Brooklyn and Staten Island. As a result of a subway crash that killed five people in 1991, the MTA began imposing random testing of its drivers for drug and alcohol use. By the end of 1992 crime seemed a less urgent concern, following 27 straight months of decline in offenses committed. In 1995 subway ridership reached its highest level since 1974.

Converting to Plastic in the Late 1990s

During the MTA's fourth, $13 billion capital-improvement program, the agency committed $1.6 billion for 1,080 subway cars. Deliveries began in 1998 for a $412 million LIRR diesel fleet, consisting of 36 locomotives and 134 coaches. In 1997 all 468 subway stations were able to accept the plastic MetroCard, and the TBTA's E-Z Pass became the world's largest electronic toll-collect system. Also that year, the MTA issued a joint commuter rail pass for LIRR and Metro-North riders and allowed the city's MetroCard users to transfer from bus to subway or subway to bus for free during a two-hour period. In 1998 the MTA issued discount cards allowing riders 11 subway and bus ride fares for the price of 10, and 7- and 30-day unlimited-ride cards (for $17 and $63, respectively). A one-day unlimited pass was priced at $4.

By the summer of 1998, 70 percent of the people using the city's subways and buses were buying MetroCards rather than tokens. Subway ridership rose about 17 percent between mid-1997 and the end of 1998. City buses attracted 20 percent more passengers after reaching a low of 436 million in 1996, following 20 years of declines. The MTA was planning to order more than 600 new buses in 1999.

Also in 1998, the MTA, which had taken out a new 110-year lease on Grand Central Terminal in 1993, completed a $200 million redevelopment of the structure. The agency, which had inherited the New York Coliseum from the TBTA, sold the Columbus Circle site of the now-vacant convention center to The Related Cos. and Time Warner Inc. for $345 million. The developers intended to demolish the Coliseum and an adjacent office tower for a complex that would include a hotel, apartments, offices, a concert hall, and television studios. In another 1998 transaction, the MTA leased a vacant 33-floor building at 2 Broadway, in lower Manhattan, for 49 years, and was planning, after renovation, to make the building its headquarters.

In 2000, the MTA adopted a new $17.1 billion five-year budget for capital improvements, including funds for preliminary engineering work on a Second Avenue subway line from 125th Street to the southern end of Manhattan and a subway link to La Guardia Airport, plus construction of a LIRR connection to Grand Central Terminal. The plan was counting on $1.6 billion from a state transportation bond issue that would need voter approval and $22 billion in new and refinanced bonds, which would put $3 billion into the capital program but saddle the MTA with $10 billion in new debt. A deficit of $2.4 billion for the operating budget was projected over the same-year period, despite an expected state contribution of $847 million during this period.

Of the $5.71 billion received by the MTA in 1998 for operations, 50 percent came from fares, 15.5 percent from tolls, and 23 percent from state and regional taxes, with most of the remainder from state and local subsidies. Almost 62 percent of this revenue was spent on New York City buses and subways, with 25 percent for commuter rail and MTA headquarters, four percent for bridges and tunnels, and two percent for suburban buses and the Staten Island railway. Nearly seven percent went for debt service. In 1999 fares covered about 60 percent of the operating costs of the city's subways and buses but only 43 percent of Metro-North costs and 37 percent of LIRR costs.

Principal Subsidiaries: The Long Island Railroad Company; Metro-North Commuter Railroad Company; Metropolitan Suburban Bus Authority; New York City Transit Authority; Staten Island Rapid Transit Operating Authority; Triborough Bridge and Tunnel Authority.

Principal Competitors: Command Bus Company; Green Bus Lines; Jamaica Buses; Liberty Lines Express; New York Bus Service; Queens Surface; Triboro Coach.


  • Key Dates:

  • 1965: Metropolitan Commuter Transportation Authority is founded.
  • 1968: Reorganized as the MTA, this agency assumes a broad mandate to direct public transportation in the metropolitan area.
  • 1973: MTA network reaches its fullest extent.
  • 1981: First five-year MTA capital budget is adopted.
  • 1990: The system has been extensively overhauled since 1983.
  • 1998: Discount cards and joint passes are being widely used.

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Company HistoryRailroad Transportation

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