As the MTA Board voted to pass a Doomsday package consisting of a 23 percent fare hike, the elimination of two subway lines and the scaling back of late-night and weekend service, the New York State Senate finally passed a comprehensive bailout package. The tax-and-toll plan will scale back the fare hike to a mere eight percent, avoid the service cuts, pare down the MTA debt and fund the agency’s ambitious capital expansion program.
Oh wait. Just kidding. Let’s try that again.
As the MTA Board voted to pass a Doomsday package consisting of a 23 percent fare hike, the elimination of two subway lines and the scaling back of late-night and weekend service, State Senators fell back on the same finger-pointing and party bickering that has come to dominate the Albany discourse. Our politicians again tried to blame a supposedly uncooperative MTA for Senate inaction and offered up the red herring of the commuter tax, another D.O.A. politically infeasible plan.
After fielding G.O.P.-targeted criticism in the city’s papers this week, Republican leader Dean Skelos blamed the Democrats for inaction. “The closed door discussions by the three New York City Democrats running state government have failed to produce an agreement on the MTA to prevent fare hikes, just as the closed door discussions on the state budget have failed to produce an agreement, with the deadline just a week away,” Skelos said in a statement.
Skelos has offered Republican support for an MTA bailout plan if it is tied to a road-and-bridges package for the upstate area.
Meanwhile, as Mayor Bloomberg urged the Senate to “do something,” one Senator took it upon himself to try. Martin Dilan, the head of the Senate Transportation Committee, proposed reinstating a commuter tax.
Support for the bill is dicey, and those who want the commuter tax reinstated believe the benefits should flow to the City and not the MTA. “The New York City commuter tax should be for New York City,” Senator Tom Duane said. “And if we hadn’t lost those millions from the commuter tax years ago, we wouldn’t be in such a dire situation with regard to the M.T.A.”
What the difference is, I don’t know. The City will benefit from a healthy and funded MTA. There’s also no guarantee that at any point the Senate would have diverted the flow of funds from the city to the MTA, as Duane suggests.
Furthermore, this proposed plan just won’t cut it. When the commuter tax was repealed during a good economy in 1999, it was estimated to bring in between $210-$360 million — or $267-$458 million in 2009 dollars. The MTA’s budget gap is $1.2 billion and climbing.
The tax has also suffered from historica bipartisan opposition. Upstate and Westchester-based Senators from both sides of the aisle felt the commuter tax unfairly burdened their constituents. With today’s G.O.P. mounting an ideological attack on the Ravitch Plan’s payroll tax, to assume a commuter tax — a plan far less equitable than bridge tolls — would pass defies reality.
(For an interesting debate on the commuter check, check out these two 2002 articles from the Gotham Gazette: pro and con. In a bad economy, the “con” argument seems a lot stronger to me.)
In the end, Senate Majority Leader Malcolm Smith issued another half-hearted plea for patience in an attempt to defend himself. “We are clearly still working towards a solution for them,” Smith said. “There’s still some time before they actually institute the raise.”
If this is the Senate “clearly” working toward a solution, I’d hate to see what they do when they actually want to get something done. Smith inspires no confidence, and while there is indeed some time before the cuts and hikes are implemented, I don’t have any faith in the State Senate. Do you?
10 comments
I do!
Maybe part of the problem is, as you say, “the MTA’s ambitious capital expansion program.”
That program is estimated at $30B over the next 5 years, and we know part (all?) of the mess we are in is due to debt service (almost $1.4B a year out of operations) on that ambitious plan? Just maybe people – senators, public, press – are looking at the world we are in and thinking that overleveraging doesnt work in a rapidly declining and toxic economic environment, and the MTAs plan – while laudable – is no longer feasible????
So you’re suggesting that the MTA abandon its capital plan and instead use the money to maintain the existing system? Not only would that be illegal (federal money earmarked for capital programs MUST be used for such or returned), but that is exactly the mentality that has kept the Second Avenue Subway out of existence for the past 70+ years.
of course I am not saying abandon the plan – but I am saying the plan (and how it got sold) is a major part of the problem. Loading more debt now upon the fragile system is stupid – even with the Ravitch plan there is still proposed billions of dollars that need to be financed.
And also – I am not saying use the fed cap money for operations – it’s already been used up anyway as the capital plans are only funded through 2009. But – there is a way to move that money to operations – it requires DOT exemptions etc but these are extraordinary times.
What do you propose?
I have a question regarding this “debt-service”, which comes out of the operations budget. In comparing it to a home mortgage, does it include interest and principal, or is it only interest payments? It would seem highly peculiar if the principal costs of previous capital programs should be paid by operations, and if interest-only payments are being made, there’s no progress in paying down the debt, is there?
With regard to Bloomberg’s goal to push the plan through the senate, I wonder what his options are. Could the city toll the NYCDOT-owned-and-operated bridges to fund the city itself – without Albany approval? If he does that, then maybe the decision in Capital City shifts from “should we toll them,” to “who should receive the toll revenue”. Or, I suppose he could really play hardball and disrupt some of the bus “privileges” on city-owned streets, but that probably wouldn’t be wise.
It’s also the mentality that gave us graffiti-covered trains that broke down constantly a few decades ago. I can’t wait for those days again. (Actually, those days were long over by the time I became a New Yorker, but you get the idea….)
This isn’t a very important question, considering that there are more important things going on, but what will happen to all the new R-160 W Trains that the MTA put into service in the last year. I live in Astoria and seeing an old Orange-and-Yellow seat W Train is rare. Will they be moved onto the R line or given over to the Q line?
I live in Bay Ridge and I’ve really had it with the nasty, funky R trains. O MTA, throw some of those new trains our way please.
They’ll just be reprogrammed as Q trains or N/R trains. What to do with the new rolling stock isn’t a very big problem. Plenty of lines need the new trains.
@ScottE: Yes, debt service includes principal and interest. Albany, as usual, did something stupid. They funded the last capital program with debt, which had to be paid off out of the operating budget. That was a terrible idea, but having done it, we are stuck with the consequences of the decision.
The Ravitch plan involves no new debt. Instead, it attempts to secure two recurring revenue streams, namely bridge tolls and a payroll tax. If it were enacted, the Ravitch plan would not only plug the current deficit, but it would also fund future capital programs, so that we would never again (hopefully) use debt for that purpose.
There’s a myth that the capital program consists entirely of big-ticket projects like SAS and ESA. Actually, the bulk of the capital program is for things like station rehabs, signal replacement, new rolling stock, and so forth. If we don’t do these things, we are back on the road to the 1970s and a state of disrepair.
People also need to understand that the big-ticket items receive large infusions of federal funding, which is not transferrable to the operating budget. If we cancel those projects, we lose the funding too.