As hyperbolic as it sounds, it’s no stretch to say that the MTA’s world was rocked by Judge R. Bruce Cozzens, Jr.’s shocking ruling Wednesday overturning the payroll tax and a slew of other fees and taxes that support the MTA. After four other cases were tossed out, a Nassau County judge elected to his position on the same party line as key payroll tax opponents fulfilled the wishes of suburban politicians and torpedoed up to $1.8 billion in annual MTA money — or over 16 percent of the agency’s budget. The ruling left transit advocates fretting, and many wondering what comes next.
So what does come next? First up, the MTA isn’t going to see its revenues decrease in the short term. According to agency officials and Gov. Cuomo, the state will continue to collect the tax while suffering through the appeals process. “There won’t be any disruption in the MTA funding,” the governor said yesterday. “We believe the ruling is wrong and we believe the ruling is going to be reversed.”
Meanwhile, as State Senators such as Jack Martins, a Nassau County Republican who won election on an anti-MTA platform, gloated like a child over the court ruling and Westchester politicians from both parties celebrated, the MTA issued dire budgetary warnings. “The payroll mobility tax drives the entire economy of New York,” MTA head Joe Lhota said. “Without the MTA, New York would choke on traffic.”
And how do you solve a potential a $1.8 billion gap? Through cuts and fare hikes of course. As Lhota said during a press conference, “Without the payroll mobility tax, the MTA would be forced to balance its budget with a combination of devastating service cuts and ever-increasing fare hikes.” As a comparison, the MTA’s draconian budget in 2010 resulted in only around $90 million in savings from service cuts, and a fare hike generates around $50 million in added revenue per one percent increase. To cover this potential funding gap, the MTA would need a fare hike of nearly 30 percent. That’s far far worse than the payroll tax.
Downstate, Mayor Michael Bloomberg, who had already washed his hands of the MTA-related mess in Albany, did not have kind words toward those who had earlier torpedoed his congestion pricing plan. Again on Friday morning, he took to the airwaves to call for a renewed effort.
“Is there a plan in place? Let me see if I can work out a plan for you,” he said Thursday. “Why don’t we toll people, I got it! Let’s toll people coming into the city, OK? Because then it wouldn’t be anything outside the city, there’s no jurisdictional issues, and we could use the money to improve mass transit! And that would get fewer people on their cars and more people on the subways. The subways would be bettter, more reliable, more pleasurable, and it would be paid for by people coming in and out. That’s a good idea isn’t it? I think so. But wait, now my recollection … I betcha the legislature thinks they have a better plan. So my suggestion is you address your question to those people who think they have a better plan.”
It’s still stunning to think that a supposedly impartial state judge thought the MTA budget not a “substantial state state concern” and somehow twisted home rule jurisprudence to create this ruling. Still, that’s where we are. The MTA and New York State will “vigorously” pursue an appeal, and the money will still flow. But politicians have won a talking point without actually finding an adequate solution.
It’s unlikely an appeals court will uphold this ruling, but if they do, as Joe Lhota said yesterday, “it would be a catastrophe for the entire region, and for the entire state’s economy that depends on it.” The payroll mobility tax is far from an ideal solution for MTA funding, but until politicians are willing to take a serious look at transit support in the region, it’s what we have. No one can afford to lose it.