Second Ave. Sagas

Category: MTA Politics

  • Payroll tax likely sticking around for now

    With the state legislature’s term rapidly expiring, Republicans in Albany cannot scrounge up enough bicameral support to overturn the controversial MTA payroll mobility tax, Judy Rife reported today. Despite the fact that State Republicans will vote for repeal today as a symbolic gesture to curry favor with their constituents, the Assembly will not be following suit. “We have several bills pending in the Senate, but we don’t yet have a partner for any of them in the Assembly,” a spokesman for Dean Skelos said to the Albany-based reporter. 

    Assembly Democrats, well aware of the GOP’s repeal efforts, are not inclined to address MTA funding over the next few days. “We have no plans to change the MTA payroll tax,” a Sheldon Silver spokesman said.

    Over the past few weeks suburban representatives who campaigned on anti-payroll tax platforms have ramped up the call for a repeal, but to me, their arguments seem spurious at best. Lee Zeldin, for instance, claims that the MTA can generate over $1 billion in cost savings through internal efficiency improvements, but the numbers just aren’t there to support this charge. Without another source of funding then – be it congestion pricing or bridge tolls – the MTA can ill afford to lose the payroll mobility tax revenue. As flawed as it is whet tax must remain.

    Interestingly, Rife notes too that while politicians have called for a forensic audit of the MTA, they have also refused to pass a bill that would fund such an audit. Good ol’ grandstanding, ain’t it grand?

  • Put an end to transit raid, says bipartisan coalition

    After countless raids and misappropriations of supposedly dedicated MTA funds, a coalition of MTA workers, business leaders, transit activists and state politicians have started to push for a transit funding lockbox. Spearheaded by State Senator Martin Golden and Assembly Member James Brennan and with the support of Transportation Alternatives, the Straphangers Campaign and the TWU, among others, the bipartisan effort could provide another piece in the MTA funding puzzle, and it is a solution long necessary to protect transit funding in New York.

    “Albany must keep its promises. Taxes created to fund the MTA should be spent on the MTA. Albany has to stop raiding funds legally dedicated to transit, the environment, roads and bridges,” John Kaehny of Reinvent Albany, whose group has long called for a transit lockbox, said. “Creating a tax for a special purpose and then spending it on something else, is bad policy and bad government. It undermines public faith in government, and fuels cynicism.”

    The measure, announced last week by Golden and Brennan, has garnered little press lately, but Allan Rosen brought it to my attention in his latest COMMUTE column on Sheepshead Bites. The bill currently has been referred to committee in Albany, but with some loud and powerful voices behind it, it could move quickly.

    “This legislation is for those who ride the buses and trains in New York City and have been asked to pay more for less service,” Golden said in a statement. “The management of our transit system cannot be built around a misguided policy of increases and reductions. It doesn’t make sense that while the quality of the commute of thousands has deteriorated; it’s costing more for them to travel.”

    Brennan, the Democrat, echoed his Republican colleague’s sentiments: “The transit system needs every dollar of dedicated tax revenue to pay for mass transit, not diverted to provide budget relief for the State’s deficits. Further sweeps by the State for the MTA’s dedicated funds will be a disaster for mass transit, and this legislation will provide needed protection.”

    The bill, which is available in full here, is a simple one. “Diversion of funds dedicated to the Metropolitan Transportation Authority and any of its subsidiaries to the general fund of the state is prohibited,” it says. The bill continues:

    The director shall be prohibited from diverting revenues derived from taxes and fees paid by the public into a fund created by law for the expressed purposed of funding the MTA or any of its subsidiaries into the general fund of the state or into any other fund maintained for the support of another governmental purpose. No diversion of funds can occur contrary to this section by an administrative act of the director or any other person in the Executive Branch but can occur only upon a statute enacted into law authorizing a diversion that would otherwise be prohibited by this section.

    In other words, the legislature can still divert funds, but if it does so, it must adhere to a series of stringent reporting requirements. Any diversion must include the following:

    • The amount of the diversion from dedicated mass transit funds.
    • The amount diverted from each fund.
    • The amount diverted expressed as both monthly transit passes and EZ-Pass toll crossings.
    • The cumulative amount of diversion from dedicated mass transit funds during the proceeding five years.
    • The date or dates when the diversion is to occur.
    • A detailed estimate of the impact of diversion from dedicated mass transit funds will have on the level of mass transit service, maintenance and security.

    Essentially, if anyone in Albany is going to divert MTA funds away from transit, they have to be willing to lay out exactly what it means to the millions who rely on the subways, buses and MTA crossings every single day.

    Golden, not a supporter of either the Ravitch plan or congestion pricing, has taken on an important role in New York City transit policy. He sits on the Capital Program Review Board, and despite his tenuous relationship with last decades’ funding measures, he has been vocal in calling for an end to these transit raids. With the right allies — including transit workers — this measure could gain momentum.

    “The diversion last year of funding for public transportation resulted in the largest service reductions in New York City history,” John Samuelsen, head of the TWU, said. “Pinched funds this year will lead to additional service cutbacks, more dangerous stations and platforms, increased breakdowns of the rolling stock, and a needless decrease in quality-of-life throughout the transit system. The Lockbox legislation is a rational and necessary approach to protect this vitally essential public service, and to speed the economic recovery not only for the City but for the entire region.”

  • Fernando Ferrer to replace Doreen Frasca on the MTA Board

    Gov. Andrew Cuomo has named Fernando Ferrer, the one-time mayoral candidate, to the MTA Board. The one-time head of the Drum Major Institute for Public Affairs and current lobbyist will replace Doreen Frasca, whose term expired in 2010. Ferrer, the Bronx Borough President from 1987-2001, will have to be confirmed by the State Senate, but he likely won’t face a significant opposition in Albany.

    Interestingly, this move could have an impact on the board’s makeup. Frasca, an expert in the financing of complex transportation infrastructure projects, has been one of the more outspoken members of the MTA Board. For instance, she has long cast a wary eye toward the Atlantic Yards deal. Ferrer, on the other hand, is a relative unknown in the transportation sector; rather, his expertise lies in housing policy. Ferrer, an outspoken opponent of Mayor Bloomberg during his 2005 mayoral campaign, will have to prove his transit mettle.

  • Who watches the watchers?

    One of the major themes that’s developed on Second Ave. Sagas over the past four and a half years has concerned Albany. Our elected representatives who oversee the MTA and the downstate transit funding apparatus are not very good at their jobs. The MTA was born out of the need to isolate fare decisions from the demands of politics, and politicians have turned that structure around to use the MTA as a favorite whipping boy and political goat.

    These days, most representatives in Albany aren’t even trying. Despite the fact that New York City powers the state’s economy, upstaters could care less about downstate transportation policy, and in an era of austerity, politicians prefer to attack funding mechanisms that impose the costs of a successful transit system on those who benefit instead of explaining why the region needs that transportation network.

    Right now, for instance, the MTA needs a significant infusion of cash for its current five-year capital campaign. Transit advocates could easily explain why this is a vital investment for our region’s future, but most politicians would have a hard time arguing either for or against it because they just don’t know enough about it.

    Recently, as the payroll mobility tax has come under fire, politicians have used the lack of popularity to shine. At a public hearing yesterday on Long Island of the State Senate Committee on Investigations and Government Operations, State Senators grilled MTA officials on the payroll tax, and the exchange between the two sides is telling. William Murphy of Newsday was there. Throughout the meeting, Sens. Carl Marcellino, Jack M. Martins and Lee Zeldin pushed MTA head Jay Walder to, in the words Murphy, “find a replacement” for the $1.4 billion generated by the payroll tax.

    Murphy has more:

    Walder said it would be difficult to make up for repealing the tax, which raises $1.4 billion annually. For example, severe service cuts imposed last year saved $82 million, he said, and a 7.5 percent fare increase generated $400 million.

    “The decision where to place the burdens . . . the decisions about how to fund the MTA, senator, I believe are the legislature’s question, not the MTA’s question,” Walder said. “The MTA cannot answer that question.”

    Marcellino gave no indication of how he would fill the gap if the tax were repealed but told Walder: “You have to find an alternative, and I take issue with it’s not your problem to find the answer. . . . If you don’t help us, we’ll find an answer, and you might not like our answer.”

    Walder said he would be happy to work with the legislature and the governor on finding other funding sources.

    To me, it sounds as though three state Senators took umbrage with the fact that Jay Walder is telling them what their responsibilities are and what their jobs are. Despite the fact that the MTA operates the transit system, it does not have the power to tax, and it is not change of raising the revenue it needs to operate. That is the state’s responsibility.

    Essentially, what we’re seeing is a failure of government. Suburban Republican representatives do not like the payroll tax and campaigned on a platform of repeal. They don’t like it because it forces suburban residents to shoulder more of the funding burden for a transit system that led to some very wealthy and accessible suburbs. But now that they are in a position to repeal the tax, they have seemingly recognize that it’s not feasible to take the money away from the MTA, and they have no idea how to otherwise fund transit.

    The MTA can’t answer the question, as Walder said, and they shouldn’t. This is the state’s mess, and the state cannot simply wash its hands of the funding problem without thinking long and hard about the economic ramifications of their actions. Unfortunately, Walder knows the MTA is too dependent upon Albany to bite the hand that feeds. Last night, he could only nibble a little bit. Going forward, though, we’ll have to rely on an institution two hours to the north that doesn’t understand transit policies and doesn’t seem interested in learning how to govern.

  • Trading a payroll tax for East River bridge tolls

    State Senator John Bonacic wants to repeal part of the payroll mobility tax.

    Over the past few months, as New York state legislators have made noises about repealing the payroll mobility tax, I’ve continued to point out the need for that money. Albany cannot strip away any of the $1.3 billion the MTA expects to see in payroll tax revenue without finding another source of money for the beleaguered transit agency. Most state representatives do not seem wise to this fact, but a few, in fact, are.

    Enter John J. Bonacic. The Republican State Senator from the 42nd District has submitted S. 4774, a bill that would eliminate the payroll tax in Orange, Dutchess, Putnam, Rockland, Westchester, Suffolk and Nassau Counties and would instead allow New York City to institute East River bridge tolls. The proceeds from that move, which Bonacic believes would be more than enough to make up for the decreased payroll tax revenue, would help fund the MTA.

    “Since the tax’s enactment, the MTA has not demonstrated it is any more effective in providing services to the people of the Hudson Valley and Long Island,” Bonacic said in a statement last week. “It remains, as I said when the tax was first proposed, ‘taxation without transportation’ on the people of our region.”

    In describing the impetus behind the bill, Bonacic issued an impassioned assault on the payroll tax. His office’s release says:

    According to a 2003 analysis, East River Bridge Tolls: Revenue, Traffic, Mobility and Equity Impacts; prepared by Schaller Consulting, tolls on the East River Bridges would bring in $522 million in annual revenue if the city adopted toll charges between $2.50 and $5. In comparison, an analysis done in June 2009, by State Comptroller Thomas P. DiNapoli projected that the MTA tax would bring in $394.3 million in revenue from Long Island and Hudson Valley. That means the bridge tolls would be more than enough to make up any lost revenue if the MTA payroll tax ended outside of New York City. However, the accuracy of the Comptroller’s initial projection has come into question given the current recession – meaning perhaps even less revenue would be necessary to make up the difference if the MTA payroll tax was eliminated.

    “People commute to New York City from New Jersey and Connecticut. My proposal is not a pie in the sky repeal of the MTA tax, which leaves a gaping hole in the MTA’s budget. Rather, it puts the financial onus on the people who commute to New York City and drive around New York City, rather than the small businesses, non-profits, and local governments whose employees, by virtue of the fact that they are working here in the Hudson Valley and Long Island, are not using the MTA to go to or from work,” Senator Bonacic said.

    Town of Chester Supervisor Steve Neuhaus, whose community is part of a lawsuit to declare the MTA tax unlawful, likes Bonacic’s alternative. “The MTA tax is also a property tax. Town’s like Chester spend thousands of dollars on the MTA tax. That cost is passed onto our property taxpayers. Simple fairness dictates that those who use the City’s bridges and subways and train system ought to pay for it. Orange County’s small business owners and local governments, whose employees do not use the MTA to get to and from work, should not be on the hook to pay the MTA tax. Senator Bonacic’s plan is fair, which is what we should expect from our government.”

    There are, of course, a few concerns. Neuhaus’ comments do not seem to offer a full view of the taxation picture. While transit service to the nether reaches of certain upstate and Long Island counties may not be as frequent or as comprehensive as many would wish, that the trains go do these towns adds to the property value. Even if businesses do not need the rails to go to and from work, they benefit from the added access. Ideally, the payroll tax would help capture that value without going overboard. It’s hard to say if it does.

    Meanwhile, the toll plan comes with a silver lining. While the payroll tax repeal would be immediate, Bonacic’s bill would be contingent upon City Council action. If our city representatives do not approve a bridge toll plan, the payroll tax would be diminished, but the MTA would not be able to recoup the lost dollars. That’s not an ideal outcome by any means.

    It’s tough right now to see much action on this issue. At some point, the state will address the payroll tax and MTA funding, but more immediate issues — including the giant $10 billion hole in the capital plan — will take center stage this summer and fall. Slowly, though, momentum is building for some kind of action on the payroll tax. That money, though, must be replaced through other funding mechanisms.

  • On the pandering of politicians

    The MTA’s financial problems are no secret. Transit supporters have been working in Albany to identify some source of funding for the $10 billion gap in the capital budget, and the authority has engaged in a very public effort to slash administrative costs. So what do the politicians do? They pander.

    In his column this week, Daily News transit guru Pete Donohue takes Albany to task for both its failure to invest in the system and its blatant attempts at pandering. Highlighting a serious of legislative measures that, honestly, are unlikely to pass the Assembly and Senate, Donohue shows how, instead of crafting sensible policies, politicians are using their oversight powers over the MTA to score points.

    Noting that New York is home to 600,000 college students, 500,000 public school students who commute, 600,000 seniors and 34,5000 police officers, he writes:

    Members of our now slightly less dysfunctional state Legislature have introduced bills requiring the MTA to give free or reduced-price travel to more than 1 million additional New Yorkers – without providing an extra dime to make up for the lost revenue.

    College students would get at least 25% off. Senior citizens wouldn’t have to pay at all. Off-duty fire marshals, off-duty police officers and retired cops would all get freebies. Under one of the bills, the MTA would be legally prohibited from charging public school students – something it threatened to do during a recent fiscal crisis. The proposed bill, however, wouldn’t even require that state and city government continue paying part of the tab as they have for years.

    Not for nothin’, but someone has to pay for mass transit or the system goes to hell in a handbasket. “I understand the impulse of legislators to make sure students and others travel on subways and buses for free or at a discount, but Albany has to help fund these rides,” Gene Russianoff of the Straphangers Campaign said. “Otherwise, commuters will be stuck with tens of millions in costs, putting pressure to raise the fare or cut service.”

    Now, the bills themselves are hilarious in the earnestness. The measure to provide free service to public school students contains no provisions for additional funding from the city or state. The bill mandating free rides for seniors doesn’t even come attached with a justification memo while the discount for college students is designed to help make up for the increased costs of higher education. (Wouldn’t it make more sense to target loan rates instead of subway fares?)

    My favorite though is the measure calling for free rides for retired police officers. Supposedly, “the presence of current and retired police officers aboard our mass transit systems would provide an added security benefit to places that are known to be targeted by criminals and where the threat level for terrorist attack is elevated. The intent of this act is to encourage the presence of men and women who possess a level of training to deal with criminal activity through their employment as police officers to use the transportation services of the metropolitan transportation authority so that they may be an extra set of eyes to aid law enforcement in maintaining security and safety aboard such transportation services.” I’m sure having more on-duty police officers would improve safety, but the argument for retired officers seems spurious at best.

    Anyway, from a social perspective and in a vacuum, it’s hard to argue against any of these measures. In an ideal world, we would give students discounts while providing for seniors and figuring out ways to ensure that more police officers are patrolling vulnerable areas. But, as Donohue notes, “More important is the need to maintain and upgrade the system so millions of daily riders have a safe and reliable way of getting to work, school and the senior center.”

    Right now, Albany has to figure out a way to hold off on the pandering long enough to fund the system. We need to make sure the physical plant is maintained and the system expands to meet demands. After all, what good are free rides if the trains don’t run?

  • MTA to restore WEP program

    From the mid-1990s through the mid-2000s, the MTA took part in a welfare-related work experience program that required a certain number of welfare recipients to work as station cleaners underground. The authority used the WEP program to promote station cleanliness without the costs associated with unionized labor, and while Roger Toussaint’s TWU had long objected, Willie James, the one-team president of Local 100, had ushered in the program back in 1996.

    Now, amidst employee cuts and complaints of dirtier stations, the MTA is going to bring back the program. “This is a program that has a proven track record of doing three things: providing low-cost cleaning help for the subway; providing job training to people who need it, and leading directly to full-time employment for many of the people who participate in the program,” MTA spokesman Jeremy Soffin said to the Daily News last week.

    Even as over the years, WEP workers moved into union positions with full-time wages and benefits, New Yorkers seem mixed on this program. I can’t fathom why anyone would complain about the potential for cleaner trains or stations, but Pete Donohue sums up the thinking in his column today.

    News that welfare recipients will be given mops and brooms to earn their benefits by cleaning the subways elicited strong reactions last week. Some readers viewed it as a further erosion of unions because the MTA would be getting free labor instead of having to pay a decent wage with benefits.

    Others thought it a novel idea that could give welfare recipients useful work experience and riders a more palatable environment. Still others – prejudging all welfare recipients as lazy layabouts who would finally have to do something for their handouts – considered it a measure of justice.

    Basically, those reactions run the gamut, but if the WEP workers bring even a modicum of cleanliness or order to a system overwhelmed by trash, I can’t see too many people complaining for much longer.

  • State GOP may wait til ’12 to attack MTA payroll tax

    A group of Long Island Republicans who won entry into Albany last fall did so on the promise that they would immediately work to repeal the state mobility tax. Claiming that this tax, which generates $1.4 billion in annual revenue for the MTA, is a “job-killing” one, these representatives want to shift even more of the MTA funding burden onto the shoulders of city residents while at the same time enjoying the benefits of a vibrant commuter transit system. Now, though, it seems as though those repeal efforts are going to have to wait.

    As Newsday reported this morning, State Senate Majority Leader Dean Skelos may be tabling repeal efforts until 2012 due to concerns over political leverage. Because the GOP would prefer to wrest other concessions out of state Democrats who, by and large, support the payroll mobility tax, Skelos may wait for a better opening before launching his assault on the MTA dollars. “When we can, we will take it up,” he said.

    Meanwhile, Republicans recognize that they can’t just take this money away from the MTA without offering up replacement funds. While we don’t yet know what shape or form the compromise will take, Sen. Lee Zeldin says he is “studying ways to make up for revenue losses that would occur.” The payroll tax — just 34 cents per $100 — will remain alive, controversial and in the news for another year yet.

  • Appeals court dismisses $1.8M bus accident award

    Over the past few years, I’ve burned more than a few pixels talking about the MTA’s legal liability. Most recently, in December, following a horrific accident involving a passenger and the gap fillers at Union Square, I wondered if the authority needed some tort protection. After all, does it make sense for the taxpayers to subsidize excessive jury awards when oftentimes the victims are contributorily negligent as well?

    Yesterday, an Appellate Division state court showed that the system as it is established now seems to have enough legal checks and balances to work well. A Harlem man in 2009 won a $1.8 million verdict from the MTA when a jury determined he wasn’t drunk as he stepped in the path of an oncoming bus while crossing the street. The appeals court though tossed the verdict and ordered a new trial based on clear inconsistencies in the testimony and too much compassion on behalf of the jury. “Albeit very infrequently, juries sometimes make findings that are utterly without foundation in the law or the evidence,” the ruling says. “This is one such case, and the finding of no comparative negligence is so irrational as to require that we unconditionally direct a new trial.”

    Usually, the multi-million-dollar awards make headlines, but those awards don’t trigger an instant payment. The MTA is bound to appeal most cases that would require a large outlay, and here, the judicial system functioned as it should. The authority may still wind up on the hook for some damages, but if Claude Williams was indeed intoxicated at the time of the accident, the award will be far smaller than originally assessed.

  • Meet the Assembly’s new Authorities Oversight boss

    For much of the past decade, Richard Brodsky had been in charge of a legislative check on the MTA. As head of the Assembly Committee on Corporations, Authorities and Commissions, the Westchester Democrat had oversight power over the MTA and made sure to use his bully pulpit to push the authority toward improvement. He was, however, anti-congestion pricing, and while his good government initiatives should be applauded, he didn’t have a great grip on the financial picture. He stepped down to run an unsuccessful campaign for Attorney General, and James Brennan, a 27-year committee vet from Brooklyn, took his place.

    This week, The Bond Buyer sat down for an interview with Brennan, and he talked about his oversight philosophy. So far, he’s saying all the right things when it comes to transit. “I’m a devoted supporter of mass transit because it’s the backbone of the metropolitan area,” he said. “The MTA’s got major capital budget shortfalls going forward which we’re probably not going to deal with right now.”

    Recognizing that the MTA’s current financial model which relies heavily on real estate tax revenue cannot support something as necessary as the subways, Brennan is willing to look outside of the box. In fact, he was a congestion pricing supporter a few years back but didn’t mention specifics in the interview. “Real estate transactions have proven to be too volatile a financing source for them and they’re going to need something going forward that’s more stable,” he said. Brennan certainly does, as one member of the Citizens Budget Commission said have “big shoes to fill,” but for now, it sounds as though he’s up to the task. That’s welcome news indeed from Albany.