When Albany approved the MTA funding package last year with the payroll mobility tax as its centerpiece, I called it an imperfect compromise. It was a plan that, as state comptroller Thomas DiNapoli reported a month after enactment, would leave the MTA short some money and did not address long-term institutional problems with the way the state and city fund the authority.
Since last summer, the MTA has seen the payroll mobility tax fall short on its promised receipts by nearly $300 million, and throughout the metropolitan commuter transportation district, suburban legislatures have agitated for its repeal. Now, three Republican Assembly representatives, including New York’s first Tea Party-approved official, have launched a new attack on the payroll mobility tax. As Faith Burkins-Gimzek of LegislativeGazette.com reported yesterday, the three Republicans are just two days removed from taking office, and already, they’re trying to push through a repeal of the tax.
The legislation — currently tagged as A10011 — was presented by Dean Murray, Robert Castelli and Michael Montesano, three representatives from counties service by the MTA. It calls for an immediate repeal of the payroll mobility tax but does not allow for another source of revenue for the MTA. Without the payroll mobility tax, the authority would be out at least $1.2 billion.
While the payroll tax has been a controversial aspect of the funding package since its inception, Gov. David Paterson’s executive budget proposal recently redistributed the burden. Instead of taxing businesses throughout the 12 counties evenly, the new plan would put more of the tax burden on New York City-based businesses while relieving those in the surrounding counties. Still, Murray and his co-sponsors do not believe this proposal goes far enough.
Burkins-Gimzek has more:
Murray says businesses are being hit two-fold, because not only do they pay the MTA tax, but because schools are required to pay the tax as well, districts will have to raise property taxes to account for the revenue loss, they argue.
The bill’s memo states that the fiscal implications of the repeal on the MTA would be an annual loss of $1.2 billion in revenue. The authority recorded a $1.8 billion deficit in 2009 and a recent press release from new MTA Chairman and CEO Jay Walder announced that the authority is laying off 1,000 station agents and administrative employees.
Murray said there would be no need to raise taxes if the MTA eliminated redundant positions, collected on unpaid invoices from advertisers and targeted pension spiking, when employees rack up extra overtime in an attempt to increase their retirement benefits. He said the MTA threatened a “doomsday scenario” that without this tax, fares would be raised and services would be cut. He said that even with the tax, fares have been raised and services have been cut — “a slap to the face” to his constituents…
Castelli said “If the fraud, mismanagement and abuse was corrected they would be able to pay off the deficit with a surplus.”
Besides the sheer absurdity of Castelli’s charge that the MTA is wasting $1.2 billion, other ranking Assembly Republicans proclaimed support for Murray’s measure on more principled grounds. “Nearly a year ago, I publicly called for the establishment of a fiscal oversight control board, along with a comprehensive audit of the MTA, to increase transparency and accountability to taxpayers who paid for a nearly $2 billion bailout of this authority, which is supposed to serve in the public’s interest,” said Kolb. “Unfortunately, the MTA’s finances are still on the wrong track: there is no fiscal control board, no forensic audit, and, as a result, no real reform.”
Still, the MTA defended itself and noted that the state comptroller has been auditing the MTA. While the authority is not a lean organization by any means, it isn’t nearly as corrupt as these representatives would have their constituents believe. “The comptroller audits us on a monthly basis,” authority spokesman Kevin Ortiz said. “The rescue legislation that passed last spring already authorizes a forensic audit, and we welcome it.”
Because Sheldon Silver holds the keys to the Assembly, this legislation is dead in the water, but it shows just how deep the electeds’ distrust of the MTA runs and how little they are willing to support public transit. Repealing the payroll tax would result in losses far greater to the region than the $1.2 billion, and even if the authority shores up its accounting and waste, a repeal would leave the MTA an additional $1.2 billion in the red and effectively bankrupt. At some point, our politicians will let the MTA fail, and it will be ugly indeed. Only then will they begin to see what decades of institutional neglect does to one of the state’s most vital economic movers.
8 comments
The suburbs in question fund their public schools at between $20,000 and $25,000 per student. Anywhere else in the US, Republicans think even half that cost is a waste, and rail against further hikes in education spending. The right-wing thinktanks keep blasting inner cities like New York and Washington for spending about $15,000 per student.
So one would suggest to the Tea Party politicians to cut their districts’ school spending to what they think is acceptable for other people, and stop whining otherwise.
Democrats have had plenary power over NYS government for years. Blaming the MTA’s problems on three powerless Assembly Republicans is lame. The payroll tax is also a silly idea. Making labor more expensive is a stupid economic pllicy, unless your express intent is to reduce employment. If you want to fund the MTA raise the fares to cover expenses and have NYS cover poor peoples’ rides out of general revenuies as welfare spending. Instead we have scores of indirect taxes to fund this agency, all to insulate the riders from teh cost of the MTA’s bloated labor union cost structure.
I don’t think the article blamed the three Republicans in question for the MTA’s problems, it just highlighted that they are moving to repeal the payroll tax. Otherwise, I agree with everything you advance in your comment.
If you are proposing to have the state cover poor folks’ rides out of general revenues. If you repeal the payroll tax, where do you think those revenues would come from?
It’s not blaming the MTA’s problems on Assembly Republicans by any means. It’s highlighting how an not-insignificant number of representatives want to do away with a major source of MTA financing.
As to your initial claim, George Pataki and Joe Bruno beg to differ. The Democrats’ new-found plenary power is relatively new, and the Republicans — including Giuliani — are largely responsible for underfunding the MTA throughout the 1990s and early 2000s.
Republicans for the most part don’t like funding transit for several reasons. They range from wasteful gov. spending to the fact only that 5% to 10% of the population use it, so they say that those users should pay for it intentionally forgetting that most transportation funds subsidize roads & not transit. I wonder does the oil lobby have something to do with this? Hmmmmm.
When G W Bush was president highway funding & transit funding were merged as to forse transit agencies to fight for opperating monies that were going to be spent on road projects & would always leave transit systems comeing up short reguardless how much they faught despite the increase of new riders over the last few years.
To the last sentence of this article. Please see the ’70s and early ’80s. Funny, we’ll have a world class city with third world transit. Hopefully an opportunisitc entrepreneur can come along and provide a privately funded (albeit expensive) alternative to transit since no one in government cares.
If Jay Walder really wants to be transformative, step one will have to be raising the fare to cover current operating costs. Next, continue to explore ways to cut those costs in an orderly manner.
For example, auditing costs. The infamous Hevesi audit, which alleged two sets of books, so spooked MTA management, that it encouraged itself to be audited to death ever after. Insiders tell me that one third to one half of MTA’s administrative overhead is made necessary by echelons of overzealous auditors, federal, state, MTA internal, and hired outside firms. Their findings presume an unlimited budget for generating and retaining cya paperwork, and impose a best practices burden on agency IT departments that no private firm would ever allow itself to be saddled with.