Home Public Transit Policy A federal attack on transit dollars draws NYC’s ire

A federal attack on transit dollars draws NYC’s ire

by Benjamin Kabak

As more New York State Republican representatives try to whittle down the MTA-supporting payroll tax, their colleagues in Washington are trying to do the same with federal funds dedicated toward transit. Last week, the House Ways and Means Committee voted to send a markup of the transportation bill to the floor, and if passed by the House and Senate and approved the president — a tall order indeed — the bill could rob New York City of billions of dollars of transit funds.

For extensive coverage of the bill, check out articles from Reuters and The L.A. Times. Streetsblog D.C. offered a short summary of the mark-up’s impact. Essentially, the Ways and Means Committee is hoping to bar gas tax revenue from funding transit. Today, those taxes are essential part of federal transit grants. Ben Goldman writes:

The Ways & Means bill [PDF] would funnel all gas tax revenue toward road programs, redirecting billions of dollars per year away from transit, which for decades has received about 20 percent of fuel tax receipts. Instead, the House GOP wants transit funding to come entirely from the general fund, pitting transit against all other government spending. To offset that spending, $40 billion would have to be cut from the rest of the federal budget.

Essentially, the House GOP is holding transit hostage to achieve budget cuts elsewhere — and they don’t seem to care if the hostage dies. They will also be tossing aside a precedent set during the Reagan administration, one that has enjoyed bipartisan support through several transportation bills, including the 2005 law, known as SAFETEA-LU, which was passed by a Republican president and Republican Congress.

The announcement of the mark-up, which you can read here, came just one day before the committee voted to send the bill to the House floor, and a broad coalition of union officials, politicians, contractors and transit agency heads have voiced their opposition. Later today, in fact, MTA Chairman Joseph Lhota will join with TWU President John Samuelsen, NYC DOT Commissioner Janette Sadik-Khan and four New York House representatives to speak out against the bill.

In the meantime, Lhota, a one-time Giuliani deputy, has penned a letter to David Camp, the chairman of the House Ways & Means Committee. “The 2.86 cents of the motor fuels tax currently dedicated for public transportation provides a stable fund source that the MTA relies on to fund its capital investments. It is critical,” he wrote, “that these funds continue to be dedicated for public transportation purposes.”

He later warned of the consequences of federal divestment. “Consistent, on-going investment by the federal government is critical to ensure that the MTA continues to be a safe and reliable system for the long term,” he said. “A less predictable funding stream for public transportation will not only result in degraded service, but will also have a ripple effect on manufacturers and suppliers that serve the transit industry.”

This is an issue that extends far beyond the borders of New York. It would cost hundreds of thousands of jobs throughout the nation in various domestic industry. Within the city, it would likely impact any future work on the Second Ave. Subway or other system expansion plans. It is yet another attack on transit dollars from those who underestimate the importance of public transit to the nation’s economy. It is a measure that likely won’t survive the Senate or the President’s veto power, but the House GOP is serious about gutting the funding mechanism for capital plans for transit agencies through the nation. That is a scary future to ponder indeed.

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Alex C February 6, 2012 - 1:04 am

Mass transit gets people out of their cars and into more efficient vehicles. Oil industry doesn’t like that.

Bolwerk February 6, 2012 - 1:55 am

At least without incredible changes to transport funding mechanisms, land use, and/or the tax structure, there is reason to doubt transit does that so much. More likely transit makes possible a lot of economic activity that might not happen otherwise, though.

Bolwerk February 6, 2012 - 1:10 am

Republicans are cretins, of course, but is this as bad as the transit bloggers are making it out to be? Naturally, this won’t happen, but if it does some nimble state and local legislation can fix the major problems, probably not even in an especially controversial way. AFAICT, the gas tax receipts would still have to be distributed locally, which has two obvious consequences:

1) more federal money has to go to New York highways, of which we have a lot and they’re underfunded.

2) buses will still use said highways, so you can’t cut transit out of the picture entirely.

So far as I know, #1 can be fixed by shifting state/local funds toward transit to make up the slack. Also, you know it won’t pass because transit subsidizes highways at least as much as the other way around is true. It means more traffic in even relatively small cities.

Alon Levy February 6, 2012 - 8:58 pm

First, New York State is a net gas tax recipient. So no, there’s no guarantee more money will flow in; Congress could cut the contribution.

Second, the roads that city buses drive on are usually ineligible for gas tax funding. It depends on the state, but in Texas it’s illegal to spend any gas tax money on anything below a numbered county road, and in Jersey Christie made a big deal out of not helping shovel snow on non-state roads. I’m not sure what the New York rules are, but I doubt they’re favorable to cities; they’re anti-urban everywhere else.

Bolwerk February 7, 2012 - 12:56 pm

I wasn’t saying more money would flow in, I was saying more would have to go to highways – existing receipts would be shifted, in other words. As far as the federal gas tax alone is concerned, isn’t it fairly equitably distributed? My understanding is that a state gets about what it raises – it may not be perfect, but it’s pretty close. If this just means it can’t be spent on transit, and that’s my understanding, New York can just as easily use the money on highways and spend less of its own money on highways. It should be a lateral, net zero move. (But that requires a state legislature with the type of legislative nimbleness that ours doesn’t have, of course.)

It’s in general-fund appropriations to transport that wild disparities occur; Alaska once got the third highest funding, despite being one of the least populous states.

As far as NYC-level appropriation goes, I don’t know the exact details but there are arterial “road-streets” in NYC that obviously need to be treated as highways as far as local transport is concerned. Queens Boulevard is an obvious example. I would guess it would be hard for them not to receive gas tax revenue, considering they surely raise a disproportionate amount of it and do play a role in regional transportation.

Alon Levy February 10, 2012 - 12:43 am

There’s a rule mandating a minimum percentage of a state’s gas tax revenues to be sent back to the same state. I think it’s 92%, but I’m not sure. Some states are far higher – not New York, which is fairly close to 100%, but a few are closer to 200%.

If New York has the same rules as New Jersey and Texas, then Queens Boulevard can’t get gas tax money. Northern Boulevard could, and so could Hillside Avenue, but not QB. Don’t you love government in the US?

Chet February 6, 2012 - 6:13 am

An idea:

1) Rename the MTA the MPA for Metropolitan Petroleum Authority

2) Slap a bunch of Exxon/Mobil stickers on everything- buses, trains, Tunnel Boring Machines

3) Tell the moronic, troglodyte, urban hating cretins that are House Republicans that we are just drilling for new oil reserves.

With that, they should be more than happy to send us billions for the work needed here.

Hank February 6, 2012 - 12:08 pm

A brilliant plan. The mouthbreathers may swallow it whole. I would include the home-builders and racists to really build a strong coalition. Also, promise to pipe in FoxNews/Talk Radio to all transit stations, as everyone knows that anyone who takes mass transit is an un-merkin freedom hating communist

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Ed February 6, 2012 - 9:10 am

One correction to many of the comments you see on this site. The “build more suburbs” lobby is really made up of real estate developers, construction companies, and car dealers (!) (these guys are quite active in politics), but not oil companies. Car manufacturers used to play a big role, but probably not so much now.

Larry Littlefield February 6, 2012 - 9:27 am

“Essentially, the House GOP is holding transit hostage to achieve budget cuts elsewhere — and they don’t seem to care if the hostage dies.”

My whole life I’ve been hearing about threats to cut off funds for New York City, while keeping them for other places. With New York politicians agreeing to a slightly worse deal each time.

Why don’t New York politicians ever demand that funds be cut to other places? Because the are supported by those who want more spending somewhere, and/or because they are hoping to be President.

I want to seem someone suggest cutting EVERYBODY’s federal matching share for Medicaid to 50 percent. Or having the state cut the state local matching share for the rest the state to the lower level of NYC. Or cut municipal aid for the rest of the state to the level of NYC.

3ddie February 6, 2012 - 11:50 am

The big issue here is that there is no political desire to raise the gas tax, it hasn’t been raised in years (should be tied to inflation), so now that the bridges are crumbling it makes sense that they only have transit to make up for that.
It just shows the lack of progressive thinking that we are engulfed on.

Al D February 6, 2012 - 12:36 pm

If the House GOP are truly the tax haters/cutters that they represent themselves to be, they would just cut out the 20% entirely and lessen the tax burden instead of re-allocating it to roads. So they are just grandstanders in the end, no different. Boehner and his tea party…

Michael February 6, 2012 - 1:43 pm

These transit cuts tie nicely into the latest vogue right wing UN conspiracy.

The dreaded UN Agenda 21, that aims to help local communities with such evil issues as sustainability, transportation planning and preservation of rural areas and the rural way of life from suburban and exurban domination.


Gingrich mentioned fighting the “nefarious” Agenda 21 in one debate.

When does the insanity stop?

Alex C February 6, 2012 - 2:15 pm

When Republicans take over entirely, drive us into a dystopian nightmare and we get nuked by the rest of the world for trying to start/restart wars with France, Iraq, Iran, Egypt, North Korea, Pakistan, Palestine, Afghanistan, Russia, Saudi Arabia, China and I guess…Cuba? Then the madness will probably stop.

But realistically, I think the whole “LET’S WRECK OUR COUNTRY” campaign can only last so long. Eventually people will realize that they need their buses and subways and vote against these clowns.

Bolwerk February 7, 2012 - 2:23 pm

A complete Republikan takeover would probably look like 2001-2006. Frivolous spending and gov’t corruption will increase, but most of the current structure of the federal bureaucracy will remain in place.

Just think about what it takes to maintain the Tea Party myth: constantly shifting rhetorical focus between the “elites”* who humiliate the middle class with their twisted eggheadery and the poor/intransigent who survive on government largess, which is only possible to finance because Galtian titans like Joe the Plumber ($40k/year, was his income?) pay so much in taxes – again, humiliation for the middle class. Both the elites and the poor/intransigent have to simultaneously be powerful/dangerous yet apocalyptically easy to overthrow if only the Real Americans™ would stand up for themselves. It’s hard work to keep such nonsense alive, and would be impossible if the social safety net disappeared. So, when the GOP inevitably takes over again at some point, the matter will be quietly dropped until the political winds shift again.

* The “elites” being totally different from the actual oligarchs, like the Koch Bros.

JAzumah February 6, 2012 - 3:13 pm

There is an easy, elegant solution to this issue.

1) Propose a federal gas tax increase to 50 cents.

2) Allow states to opt out of the gas tax increase.

3) Opt out states will be frozen to the current gas tax budget and not have access to the funds generated by the increase.

Chris February 6, 2012 - 5:04 pm

Transit enthusiasts in my view are foolish to fight against the current national mood in begging to retain/increase federal transit funding. They would be much better off seizing the moment to fight against highway funding. After all, the reduction in transit subsidy is not a problem in itself. The only problem is that highway subsidies are being protected at the same time. Eliminating all those subsidies at once (“starving the beast”) would work out tremendously for transit. It has a huge competitive advantage and in an unsubsidized market it would win, gaining mode share aggressively and becoming internally profitable as room opened up to raise fares. Yet transit advocates are happier losing, so long as the federal money faucet stays wide open padding union wages and contractor margins.

N Bluth February 6, 2012 - 5:54 pm

“…fight against the current national mood in begging to retain/increase federal transit funding”
I’m fairly certain that those in cities are clamoring for increases in transit funding. Yes, the Tea Party has been able to hijack the national debate for the past couple years, largely due to the more undemocratic aspects of our government (super majorities in Senate, first-past-the-post elections).

Chris February 7, 2012 - 12:37 am

The point is that while they fight with the Tea Party to preserve federal transit funding that is not needed, they miss a chance to ally with deficit crusaders to end destructive highway subsidies. Despite supporting the most efficient of all competing modes & the clear winner in a market without subsidies, transit supporters work to preserve a system in which patronage and lobbying over a vast pool of politically-directed funds are the main methods of deciding what gets built. It’s no secret that the massive expansion of federal transportation spending basically coincides with the development of the freeway network, the consequent decimation of existing mass transit, and the massive expansion of suburban sprawl. Why do transit supporters back this paradigm?

John R February 7, 2012 - 1:25 am

Chris, this is an excellent point. The gas tax itself covers only a fraction of the highway spending. Fighting to remove spending that is not from gas tax is in line with Tea Party conservative models, unfortunately, try to convince them that this is good economics and I’m sure you’ll find that you run into more resistance than you expect. But hey, it’s worth a shot. Make road users pay their fair share…return the rhetoric.

Alex C February 7, 2012 - 1:35 am

It wouldn’t work for one reason: the way the Tea Party views driving and mass transit. Driving to them is “AMERICAN!!!” so spending money on highways is acceptable. The second you bring in the argument of making it a fair deal for highways and transit, you lose with them. To them, transit is “communist” and “socialist” and “fascist.” So anything regarding not screwing over mass transit funding is a no-no in their book. It’s the root of all evil.

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