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.
Leave a Reply