Gov. Andrew Cuomo released a sweeping budget yesterday afternoon that is aimed at shoring up the state’s shaky finances. The big-picture items do not concern us here, but on the transit front, Cuomo has so far delivered as promised. After cuts to the Payroll Mobility Tax last year, he has proposed to make the MTA whole for 2012 and will not yet raid the transit piggy banks. Despite this pledge of dollars, the MTA though will still face a deficit of $35 million this year.
“Because of the tough choices and the historic reforms we achieved last year, we are able to propose a pro-growth budget, tackle broad fiscal reform, drive accountability in our schools to put students first, and leverage tens of billions of dollars of new investment to create jobs without significant cost to the taxpayer,” the Governor said in a statement. “Through fiscal discipline and working in partnership with the private sector, we are making New York a pro-growth State once again. This budget represents the next step in our plan to transform New York State.”
In the Governor’s proposal are a few line items for the MTA. First, the authority will receive $250 million from the state to replace dollars lost to the payroll tax repeal. Eventually, the partial repeal will cost the authority $310 million a year, but because the repeal doesn’t go into effect until mid-2012, the state need only pay over $250 million this year. The future for out-year payments, upon which the MTA had been relying to avoid deficits in the range of hundreds of millions of dollars, remains hazy.
Next the state will contribute an additional $190 million to the MTA, money that had already been factored into the authority’s budget. That isn’t money, as some transit advocates suggested earlier in the day, that came as a surprise to the MTA, and the MTA, unfortunately, cannot use it to restore service cut in 2012.
Finally, the state granted the MTA over $700 million in capital funding and raised the authority’s debt limit by $7 billion. So now the MTA can proceed with securing the necessary revenue flow for the remainder of its capital plan. As Streetsblog noted, this last item is a big one. The MTA has now seen its debt cap increase by $13 billion over the past few years, and at some point, the debt payments are going to come due. It’s fine to build Second Ave. on the backs of revenue-supported bonds, but we will pay tomorrow and for years to come for the remainder of the capital plan.
In a statement, the MTA thanked the governor: “MTA greatly appreciates the Governor’s continued support. When the payroll mobility tax was cut in December, the Governor committed to holding the MTA harmless. He followed through on this commitment by increasing direct aid to the MTA in the 2013 Executive Budget. The Multi-Year Financial Plan contained in the Executive Budget also indicates that MTA will continue to be made whole for the next three fiscal years. In addition, the Executive Budget also includes $770 million in capital funds and an increase in the statutory bond cap that are both critical to the funding plan for the 2010-2014 MTA Capital Program.”
That, of course, is just a part of the charade of the budgeting process. When the state finds itself a few hundred million dollars short come November and December, we’ll see how well those funds supposedly dedicated to and earmarked for the MTA hold up. That $35 million deficit won’t shrink on its own, but we’ll have to rely on Albany to keep from growing ever so quickly.
6 comments
A proposal to keep a promise. Realize that the Repbulicans control the Senate and must pass the budget. And it seems the deal has all ready been struck. The rebalance of the payroll tax and the installation of a republican in the MTA chair are healthy gives to the right. Cuomo has a formula for getting things done. I won’t dispute that past administrations were both embarrassing and ineffective in dealing with the legislature (who were equaly embarrassing and ineffective). Yet Cuomo doesnt show a lack of skill in navigating and legitimizing a state government that was the laughing stock of the nation less than two years ago. I have a healthy distrust of suburban republicans on transit issues. Yet, I don’t share this blog’s mistrust of Cuomo. There’s a poitical reality in Albany. Face offs rarely deliver. Negotiating isn’t the same as selling out.
I’m may not speaking for Ben (“this blog”) or other readers, but I don’t especially distrust Cuomo. Why would I? He hasn’t been especially dishonest about what he’s doing, and if anything has been unusually open. I think he’s pursuing bad policy with regard to transit, but I don’t regard his political positions on things like transit as anymore than legitimate political positions that I happen to disagree with.
That said, to an extent, they are tragic political positions, since he’s clearly talented and could be focusing on reforming the system. And hey, maybe he’ll see the light and do just that before the opportunity closes – which could happen as quickly as the weather can change.
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Let’s the kick the can another $7bn down the road I guess. What’s actually going to happen when all this debt comes due? Won’t we see a Greece right here in NYC? Hasn’t anybody learned anything yet? What am I missing?
You’re missing nothing. The people driving up the debt don’t care. They’re financially set for life. They’re doing what was done in the 50’s and 60’s: paint a pretty picture, and let the next generation worry about it while they go off to retire.
If paying for the debt in the foreseeable future means building a better New York, count me in. Investing is the economic quintessential of an athlete who is willing to pour sweat, scrape knees, or even break a leg in an effort to make it to the championship. I am willing to make sacrifices, get dirty, and take a few punches if it means that this generation, my New York Team, goes down in history for building the greatest New York. That is our championship.
If it wasn’t obvious yet, I am optimistic for the success of the MTA. I fully support it. I will not be one of the many teammates who file a petty lawsuit that will consequently run up the cost and prolong the construction in the same way one of the five players on the basketball court starts blaming his team for mistakes. That only runs up the pressure of running a play correctly. I will put up with the noise and traffic changes on second avenue. I will take those hits for my team. This applies to any construction going on in our city. In this effort, if we work together and hold each other up instead of getting knocked down and blaming the coach, we can complete these projects more efficiently and more proudly.
Our investments represent our strength. This is New York City. We are strong enough. (Shout out Drake lol) “That’s just something we know.”