Home MTA Economics How the state robs from the MTA

How the state robs from the MTA

by Benjamin Kabak

Albany lawmakers used money that should have gone to the MTA to fund other state obligations. (Source: Streetsblog)

When Albany approved a series of emergency budget reappropriations in late November, they did so under the public guise of a deficit. The money wasn’t there, they said, and so they had to take away over $100 million from the MTA.

At the time, an MTA press release sort of highlighted how the state hadn’t been broke but had basically stolen the money for the MTA and reappropriated it. “This is the first time that an existing appropriation to the MTA from dedicated MTA taxes has been reduced after collection by the state,” the release said.

Today, Ben Fried and John Kaehny at Streetsblog explain how this accounting sleight of hand amounts to state-sponsored robbery. Albany took money that should have gone to the MTA and simply moved it to another account. Talk about your two sets of books.

I’ll quote at length what the two had to say, but do visit Streetsblog if you don’t already:

The overwhelming majority of the $143 million reduction in transit funding did not originate from the state budget. Instead, Albany took dedicated transit tax revenues from the MTA and redirected them to the state’s general fund. In effect, Albany stole $118 million from transit to subsidize the rest of the state budget. That’s enough money to restore all the subway and bus cuts currently on the table in the MTA’s austerity plan.

How did they pull off the heist? To explain, we need to give a short intro to the MTA operating budget.

In addition to fares and tolls, MTA service is mainly funded by an array of dedicated taxes, which total about $4.5 billion every year. A smaller portion comes from “state and local subsidies,” of which Albany is supposed to contribute about $190 million. Already, we’re only talking about a small fraction of the MTA’s nearly $12 billion operating budget.

But here’s the thing — Albany’s “contribution” consists almost entirely of tax revenue that’s already dedicated to transit. This year, Albany put just $7 million from the general fund into MTA operations, according to the state Division of the Budget. The rest of its obligation to the MTA — $183 million — came from dedicated transit taxes.

So when the state made off with $143 million from the MTA budget in the December deficit reduction package, lawmakers were not reducing the state’s contribution to transit so much as raiding the MTA piggy bank and robbing transit riders of funds collected specifically to serve them. When all was said and done, Albany had taken $118 million from dedicated MTA taxes…

The dedicated revenue source in question — the Metropolitan Mass Transportation Operating Assistance Fund (MMTOA) — was established in 1981 and consists entirely of taxes collected in the 12-county MTA region… So $118 million in downstate taxes, meant to fund transit exclusively, disappeared into the Albany money pit. Nothing in New York state law prevents the same thing from happening again.

Unfortunately, we can’t do very much right now, but Fried and Kaehny urge riders and advocates to be protective of our future funding initiatives. We could ask elected officials to prevent against agency theft. We could ask them to own up to their cuts. After all, the same representatives who approved this giant cut are the ones slamming the MTA for being broke. Politicians just shouldn’t be allowed to have their cake and eat it too.

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