Can Richard Ravtich deliver a miracle? (Photo courtesy of The Observer)
The news rests for nothing, and on Wednesday night, while most people were home spending time with their families and away from the Internet, The Times released the early word from the Ravitch Commission. Using a combination of tolls, taxes and slight fare increase, Richard Ravitch will save the MTA. That is, if anyone will help him.
As expected, the Ravitch Commission report will contain elements of all the plans we’ve heard over the last few weeks. It will call for payroll taxes and East River Bridge tolls. It will call for higher fares and no service cuts.
William Neuman detailed the early version of the plan with a caveat that the draft is not yet final:
The tax on payrolls, expected to be less than one half of 1 percent, would apply to businesses in the 12-county area served by the authority. It would bepaid by businesses, not employees. The tax would be designed to raise $1 billion a year or more.
It would be coupled with the new bridge tolls, which would generate about $600 million a year, after the cost of maintaining the bridges and collecting the tolls is accounted for. Drivers would pay a higher rate on the East River bridges than on the Harlem River bridges under the plan.
There would be no toll plazas: Most tolls would be collected through a system of E-ZPass readers. Drivers without E-ZPass would be identified and could be billed using digital cameras that snap a picture of each vehicle’s license plate.
Control of those bridges, which are owned by the city, would be transferred to the authority under the plan, although it was not clear how that would be achieved.
The third main element of the proposal is a more modest increase for next year in fares and existing tolls on the bridges and tunnels already controlled by the authority. That increase would allow Mr. Ravitch and his supporters to argue that the cost of running the system was being shared by all those who benefit from it.
That sounds like a pretty solid plan. Ravitch is staying away from the politically explosive congestion pricing plan, and he’s allowing the MTA to raise fares, albeit modestly, without cutting service. Considering all of the talk surrounding the MTA’s Doomsday proposal, Ravitch’s all-encompassing plan seems like a beacon of light.
Of course, some aspects of it are tough to stomach. No one wants higher taxes. Even an increase of less than 0.5 percent is a tough sell. No one wants East River tolls either. But at some point, New Yorkers have to make a trade-off. They can’t complain about bad subway service without accepting some costs on the other side. This plan allows for good service and some smaller increases in other costs. Nothing, in the end, is free.
The problem right now though is one of attention and support. This plan needs a champion, as William Neuman explained in the Sunday Times. The plan needs a David Rockefeller to rally political and business leaders behind it. This plan needs a public face, someone New Yorker trust, to sell it. Who that will be is up for debate.
Later this week, Ravitch will release his set of recommendations, and the time to act is now. The MTA can’t dally as its finances head south. It needs a clear-cut plan of action. It can either act on its own by cutting service and raising fares or it can hope that Ravitch’s plan becomes a reality. We’ll learn quickly how this tale ends.
17 comments
That business tax is going to require a Herculean amount of co-operation between the 3 states; I don’t see it happening.
I also worry about the capital plan. How will they fund it?
As I understand it, the Ravitch plan is supposed to fund ongoing operations and the capital plan.
It hadn’t occurred to me that the business tax proposal would cover all three states. I agree that’s a tough sell, given that the MTA is a creature of the New York State legislature. One proposal would be to jack up Metro-North fares for routes that go into Connecticut if the legislature there refuses to raise tax revenues. But I can’t see what threat they could hold over New Jersey’s head.
What does the MTA serve in New Jersey? The article specifies that the “12 county area served by the MTA” would be taxed, but the only thing I can think of that comes close to the MTA serving NJ is the PATH train which is operated by the Port Authority.
The MTA’s connection to New Jersey is extremely tenuous, in the form of a contract with New Jersey Transit to serve stations in upstate New York that are reached via the Port Jervis Line.
I’m fairly certain the MTA serves 10 counties in New York and two in Connecticut. I don’t think NJ counts, but the bus from Staten Island touches Bayonne.
No, it’s 12 counties in New York: the five boroughs, the two Long Island counties, Westchester, Putnam, Dutchess, Rockland, and Orange.
I generally like the plan, but I think it’s a mistake to charge the tax to businesses rather than employees. This tax is passed on to employees in any case through lower salaries and benefits.
Make it a payroll tax and be done with it (of course the tax would be collected and passed on by employers in any case).
One of my suggestions when it looked like Congestion pricing was dead was to transfer the city owned bridges to MTA and let them price accordingly. I’m glad that is on the table.
The argument over who should pay such taxes has been going on for decades. It may amount to the same thing in the end, but psychologically it’s an easier sell if it doesn’t come directly out of the employee’s paycheck. It’s the same reason why social security taxes are split between employer and employee, rather than being entirely on the employee’s back. Maybe the employee winds up paying anyway, but it’s indirect, and therefore more palatable.
I hear you. But this time around with the economy being as bad as it is, I think that strategy might backfire and be spun negatively as driving businesses out of the city.
Let’s face it. The gutless NY legislature will not take up this plan because too many sacred oxes are gored. Better to just do nothing and not risk your re-election so the subway can fall into a state of shit. I predict nothing in this plan is enacted – except for the fare hikes.
I personally would have also liked to have seen the Ravitch commission recommend cuts and efficiency savings for the MTA.
I like most of these ideas except the business tax. The economy is so fragile now and the last thing we want to do is scare businesses away from the city. Maybe if it’s an even smaller tax increase, like 0.1%-0.2%
So, what would you do instead? The deficit is what it is. If you don’t raise revenues, they have to come from somewhere else. Or you have to cut service.
I think increasing one type of tax by .5% is not going to deter many if any businesses from doing business in the largest market in the richest country on earth. And part of the reason it is the largest market is because of the mass transit system.
This is very similar to the idea McCain threw out during the election that raising taxes on the wealthy would destroy our economy despite the fact that Obama’s Tax Plan was basically restoring the tax structure as it was during the Clinton Administration.
[…] we know what Richard Ravitch is going to propose — modest fare hikes, East River bridge tolls and a small, region-wide payroll tax increase — already this plan’s opponents are gathering to defeat it. Will no one step up to save the […]
What about Metro-North Service in Connecticut? Would taxes be raised along the New Haven Line as well?
[…] the Governor’s Office in midtown, Richard Ravitch will unveil his plan to save the MTA. With word of the plan out last week, the report won’t contain too many surprises. But as Ravitch gears up to launch […]