It’s no small feat to run a transit system without any leeway in the budget, but lately, that’s what the MTA has had to do. It’s suffered through bad spending, a bad economy and bad politicians who have taken dedicated funds away from its coffers, and now, it might suffer through another bout of bad economic times if Gov. Andrew Cuomo and the State Senate has their way.
The news today focuses around an off-hand comment Cuomo made at Marist College yesterday afternoon. While responding to student questions, he levied an indictment of the payroll tax. “It is a very onerous tax, not just in this area,” he said. “People are complaining on Long Island, the entire metropolitan region. I’ve said from the beginning I understand the need to finance the system. If we can find a better way to do it, I’m open.”
For Cuomo, this is a more nuanced approach on the payroll tax than what we heard during his campaign. In late October, Cuomo threatened to reassess the tax, and the MTA had to issue a spirited defense of the dollars. “The payroll tax has proven to be crucially important to the MTA,” MTA spokesman Aaron Donovan said at the time. “Its existence prevented service cuts and fare increases from being even worse, and it is reducing the funding gap in our five-year capital plan.”
In its coverage of Cuomo’s statement, the anti-tax Post tried to spin the news as an obvious sign that the payroll tax is flawed. It rehashed a story from last February about projections coming in under budget and noted how business owners in the suburban counties claim the tax is “counter-productive, because the MTA mostly serves New York City.”
Of course, the reality is a bit more complex. The payroll tax is structured such that 75 percent of the revenue comes from within the five boroughs, and the suburban counties are paying a far smaller share of the total. Furthermore, those outer-lying areas are better off with Metro-North and the Long Island Rail Road, and they can’t reap those benefits without paying for them in return. Somehow, someway, suburban riders and residents will have to pay to enjoy the services.
Furthermore, since the early 2010 projections were reduced by the state budget office, the revenue collected has actually been higher than anticipated. According to the MTA’s most recent budgetwatch publication, the payroll mobility tax totals came in at $1.351.9 billion or around $3.8 million higher than forecasted. As Cuomo noted and as the MTA has said, it will require significant compromises to cut the payroll tax and generate that money elsewhere. Without it, the MTA would be bankrupt.
Meanwhile, in the Daily News yesterday, Gene Russianoff and Paul Steely White issued a spirited defense of the dedicated transit funds. As Gov. Cuomo has yet to issue his budget, we don’t yet know how the state’s budget deficit will impact transit funding. The two advocates though have urged the governor to keep his hands off of dedicated funding:
Not only does raiding a dedicated tax fuel public cynicism, which could hardly be higher than it already is in New York, but it shifts some of the high costs of state government onto the shoulders of transit riders and downstate taxpayers. There is no free lunch. The money Albany takes out of dedicated transit funds will result in higher fares and expensive repairs of a system hurt by deferred maintenance down the line.
More raids will also mean more service cuts. That will create a drag on the economy as employers have a smaller workforce to draw on, and workers have to spend more time getting around.
We don’t need to look at ancient history to prove this. The last series of transit raids, just last June, triggered the worst transit service cuts in memory – axing 36 bus routes, closing 570 bus stops, eliminating all or parts of three subway lines and burdening millions of city riders with longer waits, more crowding and longer trips. Commuter rail riders had trains eliminated and stops added to remaining trains. Paratransit service for individuals with disabilities has been made even less convenient or, in some communities, eliminated completely.
Nobody likes paying taxes. But the wide range of businesses and people who pay dedicated transit taxes generally accept them. That’s because, in one way or another, they get what they pay for. What the public will never and should never support is seeing their transit taxes spent to plug the state’s huge budget gap.
These are tough choices that Cuomo must make, but the future of the MTA, our public transit network and the city’s economy depends upon it. Trade the payroll tax for congestion pricing and bridge tolls, but keep those dedicated funds flowing to their intended recipients. It’s just good government.