Albany Reaches MTA Deal

It’s pretty much a done deal, with an official announcement from the three men in a room expected shortly. What’s the plan? The sordid details are still emerging, but Politicker’s Jimmy Vielkind has some numbers:

  • .34 percent payroll tax in MTA service region (non-graduated): $1.53 billion annually
  • $.50 cab fare surcharge: $95 million (None of this is likely to pay for upstate roads and bridges, I’m told.)
  • Assorted fees on vehicle registrations and rentals: $175.5 million
  • 10 percent fare hike: $100 million more than the 8 percent hike in prior funding proposals
  • Total: $1.9 billion
  • Total from commuters who drive across East River bridges: $0.

This is basically the Senate Democrats’ proposal, with some knob twisting. Many aspects remain murky, like how much will go toward the MTA capital plan, but it seems fairly certain that Albany will kick the lion’s share of those funding needs down the road. The Times is also reporting that the deal includes scheduled 7.5 percent hikes for transit fares and existing MTA tolls in 2011 and 2013.

Discuss.

  • How is an increase from $2.00 to $2.25 in the base fare (which Sewell Chan of The Times reports) only a 10% increase? Mathematically, the increase is 12.5%.

    It could be that a 12.5% fare hike is needed to produce the 10% revenue increase. That’s certainly suggested by this excerpt from The Times article:

    The rescue plan called for fares and tolls to rise again in 2011 and 2013, each time by enough to increase revenues from those sources by 7.5 percent.

    If those 2011 and 2013 fare hikes are, say, 9% each (to yield a 7.5% revenue gain), then the total 2009-2013 fare hike is one-third (since 1.125 x 1.09 x 1.09 = 1.336).

    Thus, The Times’ assertion, “The agreement prevents the 20 to 30 percent fare and toll increase that was set to go into effect within weeks,” is wrong. Rather, the agreement authorizes even larger increases, over a longer period.

    The alternative to the 2011 and 2013 fare hikes must be traffic pricing — done smarter and fairer than the failed toll plans of 2007-2009.

  • meb

    Albany is broken. We know it. They know it. Let’s just get them out of office.

  • Since this seems to go mostly to the operating budget, I think the MTA will need to get massive assistance on the capital budget. This is the time for Weiner, Rangel, et al to bring home the Federal bacon. We should start parsing out the components of the capital plan that need funding – new buses, trains, projects, capital programs like painting that are really operating costs, etc. How much theoretically could the Feds fund through changes in transportation formulas / additional stimulus money.

    A few questions:

    Are MTA bridge tolls increasing 10% upfront too? If so, will that not only further incentivize bridge shopping.

    Is the 10% fare increase just getting rid of the “bonus” rides or actually increasing the fare? I hope it just gets rid of the bonuses rather than raising the base fare.

    What about diverting city funds for the 7 line extension to other necessary projects?

    If real estate bounces back, what’s range of upside for revenue? If RE transactions start to pick up, can we avoid the stupid MTA “surplus” concept and simply pay down debt or put toward the capital plan.

  • mfs

    NYT story says that car rental taxes will rise 5%. Isn’t that going to fall on companies like ZipCar that are helping people avoid buying cars?

  • I’m renting a car in a few months for a long trip. I can’t wait to have my lack of vehicle ownership for my entire life rewarded with more taxes. Way to screw it up guys.

  • NYT: “Under the agreement, about $400 million will be set aside each year from the payroll tax proceeds for capital needs. That will pay the cost of borrowing about $6.5 billion through bonds, enough to get a start on the capital plan, Mr. Silver said.”

    As we’d feared, they’re one-shotting the perpetual revenue stream. This time it doesn’t even pay for an entire capital plan — just two years of one.

  • Dave

    Pathetic. Soak the poor and pander to the car-owning rich.
    Where was Bloomberg to read the riot act to Smith and the other IDIOTS? has he given up hope with Albany and the weak governor?
    When’s the last time secession was seriously considered?
    Solutions:
    – East and Harlem River bridge tolls (it really really makes sense)
    – Two way tolls at all crossings (avoid toll-shopping)
    – Re-installation of Sunday meters (why favor Christians?)
    – Implement permit parking fees (pay for what you use; avoid tax fraud by givng permits to only city residents)
    – Congestion pricing
    Why don’t these politicians get it? Car owners by definition are rich and transit riders are poor. They are enticing increased car traffic with their horrible policies….shame shame shame

  • I do think Bloomberg could really do a lot with on-street parking revenue raising. The red light cameras are another potential revenue source. Perhaps they could pay for the “free” East River Bridges?

    I will also say that keeping service running was prioritized over tolls, but also over maintaining the fare low. At least for the next few years…

  • Peter Flint

    I’m pretty much fed up with the whole lot of politicians. Thieves and cowards. I’m voting against them all next time around. I don’t care who’s running. Run against an incumbent and you’ve got my vote!

  • Rhywun

    Car owners by definition are rich and transit riders are poor.

    Not so much in NYC, which explains the charges of “elitism” that are often leveled at Manhattanites who support congestion pricing. Therefore, I believe it is more constructive to phrase this argument in terms of supply and demand rather than making it an issue of “class”. The simple truth is that driving and parking in the densest parts of NYC is priced too low.

  • Ian Turner

    Dan,

    Rent your car in Jersey, you’ll save a bundle. Fort Lee in particular has a lot of places at roughly 25% of Manhattan rental charges.

    –Ian

  • Ian Turner

    Car owners by definition are rich and transit riders are poor.

    Indeed. Is it a transportation system or is it a welfare system? Just charge what you need to charge to encourage reasonable transportation choices in the overall system, and if the result is inequity then implement rebates for those who are truly needy. There’s no need for rich drivers or rich subway riders to get special treatment.

  • Larry Littlefield

    “If real estate bounces back, what’s range of upside for revenue? If RE transactions start to pick up, can we avoid the stupid MTA “surplus” concept and simply pay down debt or put toward the capital plan.”

    The transfer tax revenues seen during the bubble won’t be seen again for decades.

    A reasonable estimate of revenue, long term, is $400 to $500 million per year. It was up to $1.6 billion at the peak, and (at the insistance of politicians demanding the release of “hidden billions”) it was all blown.

    And there may be very little in revenues until we get from the “Mexican Standoff” phase to massive distress sales.

  • Rwhyun,

    In NYC drivers are wealthier than transit riders.

    From the Campaign for NY’s Future:
    Workers earning less than $25,000 are TWICE as likely to take the subway as drive, and THREE TIMES as likely to take bus, subway or commuter rail than drive. Among commuters who earn between $25,000 and $50,000 a year, transit remains the preferred option to driving, by a 3-1 margin. Only among commuters earning more than $50,000 a year is driving more popular than the subway, though subway, bus and commuter rail use is greater than automobile use.

    I’m not sure if I would, as Dave did, use the phrase “by definition,” as the only thing car owners are by definition are car owners, but they definitely tend to be wealthier than transit takers.

  • So the MTA is still going to have to borrow for the capital plan (well, 2/5 of the capital plan, who knows where the rest is going to come from). Unfortunately, debt service payments are already set to be over $2 billion in a couple years. What impact is this borrowing going to have on the operating budget down the line? At least these will be revenue backed bonds. From what I can gather, the last two capital plans did not use revenue backed bonds, which led to higher debt payments.

  • We will never have real transit funding as long as Espada, Diaz and Kruger are in office. I really hope some energy will be put into strong primary challenges for them.

  • Pathetic. I can’t believe I got my hopes up.

  • This is a sad day. But I am already prepared: I have been on the bike more than ever this year. The only bright spot is for cyclists – as the city’s infrastructure continues to improve we will see our numbers continue to climb.

  • Larry Littlefield

    “This is a sad day. But I am already prepared: I have been on the bike more than ever this year.”

    I’m with you Clarence.

    I started with “somebody should do something” to preserve our public institutions. I moved onto “if no one else will do something I have to” which eventually led me to run against my Assemblymember as a minor party candidate in 2004.

    To today — they are going to keep draining these institutions until they collapse, so we’d better be prepared to live without them, and try to fight against paying something for nothing. For transportation, that’s a bicycle.

  • Glenn

    Actually, the MTA bill for cyclists just went through the roof. Let’s say your an everyday cyclist and only occasionally take mass transit. But let’s say you make $75,000 a year and rent a car a few times a year. You can’t average down you fares by using the system more because the unlimited doesn’t really make sense for you.

    And now you’re getting taxed .34% on your income which equals $255. And you’re also chipping in another $50-100 on car rental fees. Throw in a few dozen cab rides that your significant other demands and you might be pushing $400 a year.

  • Larry Littlefield

    “But let’s say you make $75,000 a year and rent a car a few times a year. And now you’re getting taxed .34% on your income which equals $255.”

    Ah, but if you have $75,000 in retirement income, you aren’t paying an extra dime. In fact you aren’t paying a dime period. And if you have $250,000 in retirement and investment income, you aren’t paying an extra dime.

    And “the MTA bill” bill to be funded isn’t for 2009 to 2012. It is the interest on the unfunded bill from 1992 to 2008.

    We aren’t paying more for transit (or Social Security or schools or parks or libraries or health care). Don’t let the psychological enginners convince you we are.

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