Budget constraints bind. Read this NY Times Editorial in which the NYC mayor is lectured for not spending enough on subways. My simple theory for why this mayor and past mayors have under-invested is because almost all of the $ goes to the public sector transportation unions. As we argue in this 2016 NBER paper, these public sector transport workers are very well paid. In aggregate, this leaves very little money for upgrading capital. New York City's subway is old (and thus not at the technological frontier) and the unions have great power. Read about the NYC bus driver who made $153,000 in 2015. In our paper, we report evidence that the unions do not have this wage setting power in conservative cities. The mayors of these cities can credibly threaten to privatize transit services.