Home MTA EconomicsDoomsday Budget Latest MTA funding plan rife with problems

Latest MTA funding plan rife with problems

by Benjamin Kabak

While Gov. David Paterson called the latest Senate plan for the MTA “worth considering” and Senate Majority Leader Malcolm Smith claims he has the votes to pass it, the fate of this new funding plan is far from clear. Already today, I’ve delved into the taxi surcharge problem. That appears to be just one of many hurdles this new bill faces.

First up is internal dissent among the state Democrats. According to The Times, four Senate Dems will not support a payroll tax. The new plan calls for a payroll tax for all 12 MTA counties, but the tax will be lower in the outlying counties. This makes no sense on its surface because it actually costs more to the MTA to serve those areas further away from the New York City core, but whatever. If it wins votes, it wins votes

The problem is that it’s not winning votes. “I remain opposed to the imposition and use of a payroll tax,” Craig M. Johnson, Democratic senator from Nassau County, said. He — along with fellow Democrats Brian Foley (Suffolk County), Andrea Stewart-Cousins (Westchester) and Suzi Oppenheimer (Westchester) — remains opposed to any and all tax plans.

With these four Democrats in opposition, Malcolm Smith would have to pick up four members of the state G.O.P. Senate contingent. As we learned last night, though, right now Republicans are opposed to the tax plan as well with maybe one — Frank Padavan of Queens — open to supporting this funding plan. Maybe.

Today, Republicans voiced anew their opposition to the plan and raised some valid concerns that transcend ideological lines. “It’s an insult to upstate and downstate,” Martin Golden, Brooklyn Republican, said. “We’re going to put $200 million in taxes on the backs of the cabdrivers and the people who live in the City of New York.”

Martin’s point is echoed in a brief piece by NY1. This new plan has all sorts of mismatched priorities. Basically, the cab fare increase, a hyperlocal way of raising revenue, would go to upstate projects and districts that have never seen a yellow taxi. Meanwhile, New York City dwellers and drivers would get a reprieve from shouldering much of the burden because the licensing registration fee increases would apply to everyone across the board in all MTA counties. Those living outside of the city where car ownership rates are higher would be funding the subway system.

In an ideal world, the MTA funding plan would require money collected in New York City to be reinvested in New York City; money collected upstate to be funneled back upstate; and money collected in Westchester and Long Island to go toward transit and infrastructure there. This new plan accomplishes none of those goals and doesn’t seem to have the support it needs to pass the Senate. How utterly disappointing and how utterly typical.

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12 comments

Marc Shepherd April 22, 2009 - 12:35 pm

The new plan calls for a payroll tax for all 12 MTA counties, but the tax will be lower in the outlying counties. This makes no sense on its surface because it actually costs more to the MTA to serve those areas further away from the New York City core, but whatever.

Yes, but opponents point out that many constituents in the outlying counties get no benefits from the MTA whatsoever. This was a legitimate flaw in the Ravitch plan, in that it treated all 12 counties equally. Of course, we wouldn’t have needed Ravitch’s plan at all had the legislature adopted congestion pricing, which is the best plan to date for funding the MTA.

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Rhywun April 22, 2009 - 12:41 pm

“opponents point out that many constituents in the outlying counties get no benefits from the MTA whatsoever”

And those opponents are lying. The benefits are there, they just choose not use them.

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Rhywun April 22, 2009 - 12:38 pm

Those living outside of the city where car ownership rates are higher would be funding the subway system.

…and their local buses and commuter trains.

Look, I’m not opposed to reasonable fare increases to cover operating costs. But let’s not pretend that the system is anything close to fair now. I help pay for local streets but I don’t drive. I pay extra fees on my utility bills so they can extend service to the hinterlands. I helped pay for Yankee Stadium but I’ve never set foot in it and probably never will.

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Niccolo Machiavelli April 22, 2009 - 1:24 pm

I find myself in rare disagreement with your position here:

“In an ideal world, the MTA funding plan would require money collected in New York City to be reinvested in New York City; money collected upstate to be funneled back upstate; and money collected in Westchester and Long Island to go toward transit and infrastructure there.”

I don’t think there is anything ideal about that arrangement for MTA funding. I think what you propose balkanizes both the supply and the demand side of the equations. In my ideal world each region would trust each other and the MTA enough, and understand that transportation by its very nature transfers economic and social values from region to region, constituency to constituency. Trying to find some mathematical function that achieves social value equity is impossible and why we always revert into the turf protection and NIMBY responses in these matters driving us into a perfect circle of distrust.

The MTA, roads and bridges, ferrys, airports are tools for transferring economic value between political constituencies. When such distrust between the constituencies has been created over the years and the agency (MTA) is not considered an honest broker by the political handlers, it becomes impossible to come up with a common program that a democratic legislature can support.

Throw in the parochial interests of the far-removed members of the Senate and Assembly conferences and you have the perfect circle of distrust we find ourselves in.

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Marc Shepherd April 22, 2009 - 1:53 pm

And those opponents are lying. The benefits are there, they just choose not use them.

No, those opponents are entirely correct. It is not as if these people live near transit, but choose (for convenience’ sake) not to use it. Many people live in areas that have no credible mass transit option whatsoever. Generally, the farther you live from NYC, the more likely this is true. That is why taxing all 12 counties equally is arguably unfair.

Now, I do realize that every funding mechanism (other than the farebox) is somewhat inefficient, in that it may force people to pay for a service they either do not or cannot use. However, there is room for debate about what option minimizes the inefficiency, and in that sense critics of the 12-county tax do have a legitimate point. If you deny that, you are simply contributing to the misinformation and posturing that has caused this stalemate in the first place.

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rhywun April 22, 2009 - 9:51 pm

That is why taxing all 12 counties equally is arguably unfair.

Very well. Then those counties’ service shall be reduced by a percentage equivalent to what they wish to pay relative to the rest of us–also taking into account the higher cost of providing it to them. Let’s say (hypothetically) it costs double per person to provide bus service in relatively sparsely-populated Suffolk County. And let’s say they pay half the payroll tax that NYC pays. Then their service shall be reduced to one quarter its present level. Fair is fair.

Alternatively, an equitable payroll tax could provide the dramatically-improved service that folks in those counties are already demanding but not receiving.

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Marc Shepherd April 23, 2009 - 7:29 am

Trouble is, the “reduction” you referred to has already occurred, via the decision to provide far less mass transit to those areas in the first place.

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zgori April 22, 2009 - 4:55 pm

Actually, even if you never set foot on a train or bus, if you live in a county that has trains and buses that connect to NYC, you benefit from increased property values, better employment opportunities, reduced congestion, and all the other benefits that come from proximity to transit and access to major metropolitan area.

Same (arguably) for Yankee stadium. You may not like baseball, but many people do. Having a baseball team creates value for the city and everyone benefits.

This is what it means to live in a society. Not everyone benefits directly from every tax dollar spent, but we all benefit when we pool our resources in order to fund big projects. Our politicians have lost sight of this, and they are being egged on by people who think they are special and shouldn’t have to contribute.

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Anon April 22, 2009 - 9:12 pm

zgori well said.

Anon

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rhywun April 22, 2009 - 9:44 pm

Having a baseball team creates value for the city and everyone benefits.

That’s what the team owners want you to think when they convince us to give them hundreds of millions of dollars, but I can easily locate studies that prove otherwise.

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zgori April 23, 2009 - 11:51 am

Well, there is value to having sports teams, it’s just that taxpayers usually get a rotten deal compared to owners who lay out relatively less capital but keep relatively more profit.

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Questionable Support For Senate Dems’ MTA Plan April 23, 2009 - 12:34 am

[…] Because the Democrats only have a 32-30 majority, they need every vote to pass the proposal. The Times spoke to four Democratic Senators—one from Nassau County, one from Suffolk County and two from Westchester County—who are opposed to the payroll tax and Republican minority leader Dean Skelos said the GOP Senators “[have] a real problem with the payroll tax.” Sen. Marty Golden (R-Brooklyn) told the News, “There’s no way [Smith] has the votes.” Second Avenue Sagas breaks down some problems with the Senate plan. […]

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