NYC NOW - June 21, 2023: Evening News

Episode Date: June 21, 2023

Manhattan’s borough president is urging New York City leaders to be prepared for the changes that artificial intelligence will bring. Plus, the state Assembly approved the challenging Wrongful Convictions Act. Now, it’s up to Governor Kathy Hochul to change it. And finally, the MTA is buried under a $48 billion mountain of debt, and paying it off threatens to undermine the agency’s core function: running mass transit for more than five million people a day. WNYC’s Stephen Nessen and Clayton Guse explain why all the money owed to banks could mean big trouble for commuters.

Good evening and welcome to NYC Now. I'm Juna Pierre for WNYC. We begin in Manhattan, where the borough president is warning city leaders to get ready for all the changes that come with artificial intelligence. Borough President Mark Levine's office issued a new roadmap this week, urging the city to prepare for the transformations tools like chat GPT will bring both for better and for worse. He says schools and city agencies need to think carefully about how and when they use these powerful tools. But at the same time, Levine says we shouldn't be afraid to try them. We had chat chief if you write the summary for this report.

It saved us time. It came out, I think, really good. And it also made a point that these tools are here. They're capable and they can often write at a level that is difficult for the casual reader. They even distinguish from human writing. The mostly human written report also recommends that the city invest in AI research and AI-proof job training. Stay close. There's more after the birth.

Governor Kathy Hockel will have to decide whether or not New York changes its rules for challenging wrongful convictions. WNYC's John Campbell has more. The State Assembly approved the Challenging Wrongful Convictions Act a week and a half after the Senate did the same. The bill would make it easier for people to apply to get their conviction overturned. As of now, someone who pleaded guilty can only apply if there's new DNA evidence. If Hockel signs it into law, the bill would expand that to other types of evidence, such as a as an expert who later recants their testimony. The governor hasn't said which way she's leaning.

The bill is one of more than 800 she has to sign or veto by the end of the year. The MTA has a list of issues. Fewer riders after the pandemic and therefore less money in fares is just one of the problems facing the MTA when it comes to running the subways, buses, and commuter rails. The agency is also buried in billions of dollars of debt. WNYC's Stephen Nesson and Clayton Gusa explain why all the money owed to banks could mean big trouble for commuters. The MTA's debt is enormous, $48 billion that's built up over the last 30 years,

and that could eventually leave the agency without enough money to get you where you need to go on time. And to illustrate just how big this problem is, I put in an order for Clayton. We've ordered lunch. Large pie. Behold, the MTA pizza. Think of it like a big, greasy pie chart

that represents all the money, $19 billion that the MTA will spend this year. We are going to divvy up this pizza pie chart on the subway. Do you want a slice? Yeah, I want to slice. Shania Flicking was heading uptown and ready to eat. This pizza, is the MTA's budget.

This is what is spent by the MTA every year to run the subways, the buses, the commuter railroads, the bridges and tunnels. But two slices, maybe minus a little chunk, goes straight to the banks. Because the MTA is in so much debt, they have to spend $3 billion a year to pay the interest on its loaned.

That's terrible. That's horrible. Do you want to be the banker who takes this? I'm going to be a banker. Okay. She takes two slices and a paper plate. You got $3 billion worth of pizza right there. That's crazy.

What's even more crazy is how the MTA got into this situation. And to tell that story, we have to go to New York City's municipal archives. This is old school New York right here. It's basically a repository of everything that happened in New York before the Internet. You go through these giant gates. Inside is an old, neatly bound, one. 125-page document dated from 1982. We have the document here, and it's got...

This is what's known as a Series A bond agreement. It's a record of one of the very first times the MTA ever borrowed money. And what it describes is a transit system that was, quote, seriously deteriorated. I used to take the Luxempsons and have some way to work every day. It was pretty shh.

That's Richard Ravich. He's the one that came up with this borrowing scheme in the first place. You sometimes have to wait 20 minutes for a train. Sometimes they were demonstrably filthy. Ravich is a former real estate developer who turned his financial prowess to the city's dire finances in the 1970s. In back-to-back White House meetings this afternoon,

President Ford discussed New York City's financial problems. Remember that famous news headline, Ford de City dropped dead? It was Ravich who came up with a plan to sell bonds to keep the city running. And when he turned his attention, to fixing the city subway system as the MTA's chairman, he used the same approach. Everything that was built in this city was built with debt. Under Ravich, the MTA initially borrowed a total of $2.5 billion,

far more than it had ever spent before. They used that money to buy new subway cars, upgrade stations, and replace aging track signals. And all that borrowing worked. A decade later, service had improved, delays were down, and ridership was up. In order for the banks to lend the MTA money, the agency had to promise to pay it back, with fares, tolls, and importantly, a new stream of state taxes.

But there were problems. In April 1982, seven months after Ravich's plan passed, he appeared at a public hearing. He was there to answer questions from strap hangers. They were concerned his debt plan could impact how much riders pay. That would create enormous pressure for future fare increases. And that's exactly what happened. Before Ravich, fairs were 50 cents. Ten years later, they more than doubled to $1.15.

If the MTA doubled our fare now from 10 years ago, a single ride would cost $5. But the thing that caused the MTA's borrowing to skyrocket is probably best summed up in the inaugural speech of the man who became governor of New York in 1995. Today, government is simply too large. George Pataki. State government is too big

and it spends too much money. Pataki inherited a subway system that, thanks largely to Ravich, was doing better than at any time in recent history. For Governor Potaki, it was clear that things were on the upswing. And when things are on the upswing, then you don't have to pay attention to them.

That's Joe Rappaport. At the time, he was with the advocacy group the straphangers campaign. It was easier for the governor, or to balance his own budget by forcing the MTA to borrow more and more money. Pataki's successors have done the same, and writers and New Yorkers are still paying that money back today. To make a long story short, we've gone from zero debt in the early 1980s to close to $48, $50 billion in long-term debt by 2023. Nicole Jelineas is an expert on municipal debt. She works for the right-leaning think tank, the man.

Manhattan Institute. And every time the MTA has a new capital plan, they rely more and more on debt. You know, the first Ravage plan was only 30% reliant on debt. We're getting closer to these capital plans being two-thirds reliant on debt. For example, the bulk of the $12 billion the MTA spent to bring the Long Island Railroad to Grand Central was paid for with debt. The agency has also, at times, restructured much of its debt, paying more to be. thanks in total, but over a longer period of time.

WNYC analyzed 40 years' worth of MTA records. We found that the cost, just to make its debt payments each year, has increased by more than 600% since Bataki took office. That's more than three times the rate of inflation. Those two slices, the $3 billion it owes in debt payments alone this year, is enough to run the entire mass transit systems in Chicago or Washington, D.C., see. All wall ridership and therefore revenues remain about 30% below what they were before the pandemic. By now, you might be asking, what does all of this mean for me, the commuter?

The MTA's own financial documents describe uncertainty over whether it'll have enough money to balance its books as soon as the end of 26. And some experts fear the MTA could fall into what's known as a death spiral. It's where a lack of funding leads to cuts to subway and bus service, which leads to fewer and dirtier trains, which leads to even less fair money to run the system, which leads to more service cuts. You get the picture. I wouldn't say we're in a crisis at the moment, but... That's Thomas DeNapoli, New York State's comptroller. I think you could see a funding crisis around the corner. And the debt burden plays a major role in that? It certainly plays a role because your system falls into disrepair. It's going to make it harder for people

to want to use the trains and the subways and the buses. In order to keep the whole system afloat, fares are going up 5% later this year. They're expected to go up every two years after that. And still, the MTA's giant pile of debt will grow and must get paid. And when the agency runs out of money again, they'll need to go back to lawmakers hat in hand. If they come up empty, that means even bigger fare hikes

and possibly cuts to service. That's WNYC's Stephen Nesson and Clayton Goussa. Thanks for listening to NYC now from WNYC. Catch us every weekday, three times a day. We'll be back tomorrow.