Home MTA Economics Assembly sort of sticking up for MTA millions

Assembly sort of sticking up for MTA millions

by Benjamin Kabak

Yesterday afternoon, Streetsblog reporter Noah Kazis alerted to the world to a potentially crippling raid on transit funding from the good folks in Albany. As part of the looming budget discussions, the legislature could remove an additional $170 million from the MTA’s budget. Around $70 million of that would come from the partial repeal of the payroll tax, and the other $100 million would come in the form of discretionary spending. Combined with Gov. Andrew Cuomo’s plan to cut $100 million, the MTA could be staring down the wrong end of a $270 million budget hole.

Today, Jim Brennan, chair of the Assembly’s Committee on Corporations, Authorities and Commissions, vowed to protect the MTA’s budget. Noah Kazis reports:

According to Brennan’s legislative director, Lorrie Smith, the Assembly remains opposed to having its money be used for the MTA, but will find another source for that $100 million. “The MTA is not going to lose that money,” she said. “Mr. Brennan’s main goal here is to protect the MTA’s budget.” It is not clear, however, what the alternative source for that $100 million will be.

Smith also told us that the payroll tax exemption was not going to make it into any final budget. “The payroll tax, as I understand it, is off the table,” said Smith, “because the Assembly is adamantly opposed to it.” According to the leaked memo we reported on yesterday, the Cuomo administration is also opposed to cutting back the payroll tax in this budget.

Finally, Smith revealed that a third transit issue is keeping the transportation section of the budget from being completed: Long Island Bus, which recently cut more than half of its lines. “This is an issue that is being decided some place above us,” said Smith, who knew only that negotiations were ongoing.

Better late than never, I guess, but I’m not going to hold my breath quite yet. The state has a huge budget gap, and transit funding has always been the first to go in times of crises.

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Alon Levy March 25, 2011 - 3:43 pm

Why are they cutting taxes in an austerity plan?

Donald March 25, 2011 - 4:48 pm

Because that is precisely how austerity works Alan. You cut spending that benefits middle class and poor people, and you cut taxes for rich people and corproations. Austerity is nothing more than welath re-distribution from the bottom to the top.

JK March 25, 2011 - 6:24 pm

The bigger, more positive, picture here is that Brennan, the chair of the Assembly Authorities committee, is from a transit district in west Brooklyn instead of suburban Westchester like his predecessor. Brennan has every reason to preserve funding for the MTA — and has said so. The Governor’s office understands that the $70 million in PMT education reimbursement the senate wants to cut is chump change in the overall budget, but a big deal to an MTA already fraying from two years of raids and the burden of a self-funded capital plan.

will March 25, 2011 - 9:50 pm

it’s hard to argue against these spending cuts when the MTA spends half a billion a year on access-a-ride, which provides door to door limo service for a relatively small population of the “disabled”, most of whom are perfectly capable of taking a train or a bus. The MTA will never win the hearts and minds of the public or the legislature when it is obviously incredibly bad about allocating its scarce resources.

MaximusNYC March 25, 2011 - 11:23 pm

Half a billion a year? Do you have some links to back that number up?

Donald March 26, 2011 - 12:35 am

“The MTA’s paratransit costs have more than doubled to $472 million in 2010 from $190 million in 2006. Access-a-Ride costs are expected to grow to $694 million in 2013—a 47% increase from today—as the city’s elderly population grows and as more residents become immobilized by chronic illnesses such as diabetes.”


Nathan H. March 26, 2011 - 9:47 am

Diabetes, largely brought on by sedentary living. Many of our elderly are incapable of riding the subway; in other countries they are riding bicycles to the store, or away from tsunamis. (I intend to be one of the latter two.)

It’s not fair for transit advocacy to be pitted against the society-wide issue of assistance for the handicapped. Why should bus routes be cancelled to pay for access-a-ride? The problem of paying for paratransit needs to be put against the wish to maintain free parking, free bridges, and low taxes. Public transit has already been squeezed dry.

Donald March 26, 2011 - 1:49 pm

Para transit is being cut too. Now they are going to replace most of the para transit system with debit cards that non-wheelchair bound passengers can use to pay for cabs.

will March 26, 2011 - 8:20 pm

low taxes? Are you kidding? Taxes in New York are the highest in the country, and compare unfavorably with taxes in other world-class cities. We have scarce resources, and the mandatory nature of ADA requires that we cancel subway and bus routes to pay for incredibly expensive limo service for a relatively small population of “disabled”, many of whom could take the train or bus. Paratransit is sucking the lifeblood out of NYC transit, but no one wants to talk about it. It’s impossible to engage in any kind of rational cost-benefit analysis, given that free limo service for the “disabled” appears to have become an entitlement.

Alon Levy March 27, 2011 - 12:08 am

Which world-class cities specifically are you thinking about? Because I’m reading on taxation in France, and it’s much more onerous than anything in the US: 40% on income, 8% on top for social security, 19.6% sales tax, 50% on payroll for social security levied from the employer. Paris has another 1.6% payroll tax for transit, if I remember correctly.

The UK, as I recall, has much higher taxes than the US as well, so add London as another world-class city with higher taxes.

will March 27, 2011 - 7:13 pm

yes, and confiscatory levels of taxation have really worked out well for them. A lot of entrepreneurs and industrialists are clamoring to set up shop in France, so they can pay those taxes. The reality is, NY is competing with other American cities, like Dallas and Chicago, and Asian cities, like Shanghai, Beijing and Singapore, where rates of taxation are lower.

And by the way the marginal tax rate in New York, taking account of state, federal and local tax, is about 50% on high earners. And that’s without accounting for real estate tax, sales tax and all of the other sundry taxes levied by the state and city.

Donald March 27, 2011 - 7:47 pm

That sounds more like Tea Party propaganda than fact. Germany, a high tax country, has one of the lowest unemployment rates in Europe. In contrast, Ireland, a low tax country, has 13.5% unemployment.

Most credible economists have found that tax rates and employment have very little to do with each other.

Alon Levy March 27, 2011 - 9:51 pm

If looking at France offends you, then let’s look at Sweden, one of the fastest-growing developed countries. Local income tax is flat and averages 31%, marginal national income tax is 25% (on incomes above about $80,000), social security tax is 32% paid by the employer, and VAT is 25%. Government spending as a percentage of GDP is about 50%, one of the highest in the OECD if not the single highest.

The only city in the American Sunbelt that can boast comparable income growth to the faster-growing European countries in the last few years is Houston. In many, such as Atlanta, real per capita has never recovered to 2000 levels.

Donald March 27, 2011 - 11:24 pm

And as a result of low taxes, Texas is in worse shape than NY and has a massive $27 billion deficit.

Alon Levy March 28, 2011 - 9:32 pm

If you start comparing various recession pain indices like unemployment and foreclosure rate with state taxes and spending, it turns out that in all cases bigger government is correlated with less pain – but the correlation is just short of being statistically significant. Of course, when you have 8 correlation indices each just short of significance, together you should get some significance… but how much is beyond my meager knowledge of statistics.

will March 28, 2011 - 11:31 pm

Something tells me that you guys militating in favor of high taxes aren’t paying much in the way of taxes. Sure, from your ivory tower, high taxes seem like a good idea, but once you actually start forking over half your income to the state, city and feds, you will sing a different tune. In the meantime, the steeply graduated nature of our tax code means that there really is a free lunch: the top 5% pays all the taxes, so why not demand more taxes, more services, door-to-door limo service for all…just so long as someone else gets stuck with the bill.

Meanwhile, the MTA, in the face of the Access-a-Ride mandate, is forced to operate a vast fleet of para-transit vehicles, at an insane cost, while its stations collapse into ruin.

Alon Levy March 29, 2011 - 3:38 am

The rich pay taxes roughly in proportion to their income. Because the payroll tax is capped, the marginal income plus payroll tax in the US is flat from the 25% bracket and up – and that doesn’t take into account the regressive sales and property taxes, regressive exemptions such as for mortgage interest (i.e. a tax on renters), and the lower rates of capital gains taxes.

The super-rich pay less, because of sundry loopholes. Warren Buffett likes to point out he pays a lower percentage of his income in taxes than his receptionist.

Donald March 27, 2011 - 3:00 pm

Except for cities in oil rich Middle Eastern countires (ie: Dubai), I don’t know of a single city with low taxes. Virtually every country in the world has a Value Added Tax (VAT). The U.S. does not.

Andrew March 28, 2011 - 7:15 am

The MTA is required by federal law to provide Access-a-Ride.

will March 28, 2011 - 11:25 pm

not exactly. It isn’t required to provide door-to-door service. It could provide service from one accessible station to another. If service was limited in this manner, ridership (the cost of which works out to about $50 per ride) would plummet. Of course, politicians won’t even consider this because they are in business to pander to the elderly.

will March 28, 2011 - 11:38 pm

also, what sort of response is that? The MTA can’t lobby the feds for saner eligibility standards, or work within the system to restrain the ruinous cost? Was the ADA handed down to Moses from God? The ADA is nothing more than an accretion of rules, written by bureaucrats, which has forced the MTA into providing services it is unfit to provide, at an expense that imperils the health of the transit system.

think about it: the MTA is now in the business of providing (virtually) free on-demand car service, not only for the handicapped, but for anyone who feels old or tired or may have developed a limp. It calls into question the whole idea of “public” transit. And the expense is unfathomable. As a consequence, we can look forward to decades of decline, at the end of which every station will look like West Fourth Street, and every train will look like the C train.

Alon Levy March 29, 2011 - 6:59 pm

The MTA has already gotten outs for legacy reasons that a greenfield subway wouldn’t get. By federal law, all new transit systems must be 100% accessible. The MTA gets to choose to provide paratransit instead of retrofitting every station with an elevator.

will March 28, 2011 - 11:26 pm

also the standards for eligibility are obviously ludicrously low. I see “handicapped” people practically bounding on to these vans, like pre-schoolers. Maybe they just put on a really good show at the eligibility center, but most of these people are scamming the system.


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