Albany’s Selective Theft of Transit Funding: Only NYC Pays

Earlier this month we described how Albany made off with more than 100 million dollars in dedicated transit taxes that should have gone to the MTA, using revenues collected from the New York City region to plug the statewide deficit. So we wondered, what’s happening to the state’s other transit authorities? It turns out that not only are upstate transit agencies still receiving subsidies from the state’s general fund, they get a portion of the MTA’s dedicated taxes too.

We don’t mean to imply that these transit agencies shouldn’t receive support from Albany — they should. But it’s worth looking at the choices elected officials make about allocating funds for transit, because it reveals part of the political calculus that goes into Albany’s predilection for robbing from the MTA.

When electeds divert transit funding from New York City, it’s not a "tough" or "necessary" budget decision. It is a conscious, political choice by the state government.

There are four major upstate transit authorities, covering the metro areas of Buffalo, Syracuse, Rochester, and Albany. Each is quite small compared to the New York City region’s transit system. Combined, they carry around 2.6 percent of the ridership of the MTA [PDF].

At each authority, the single largest source of operating revenue comes from a state fund called Public Transportation Systems Operating Assistance, or PTOA. All told, Albany puts about $19 million in general tax revenue into PTOA each year, according to the State Division of the Budget. Those subsidies stayed in place, even as the state took extra measures to eliminate its deficit last fall.

In contrast, before last fall, the MTA was slated to receive only $7 million in
operating assistance from the state’s general fund. Then, after Albany enacted its deficit reduction package, things got even worse. The state became a net drain on the MTA,
siphoning off more than $100 million in dedicated transit taxes collected downstate.

But that’s not all. Since
2006, the state legislature has taken $20 million per year, on
average, from the MTA’s downstate transit fund and transferred it directly
to PTOA, according to the State Division of the Budget. In other words, the state takes dedicated transit tax revenue from downstate and gives it to upstate transit.

To reiterate, upstate transit agencies should receive state subsidies. Albany’s willingness to rob from the MTA but not upstate transit should remind us, however, that when electeds divert transit funding from New York City, it’s not a "tough" or "necessary" budget decision called for by hard times. It is a conscious, political choice by the state government. The kind of choice that legislators try to obscure from their constituents when service is threatened or fare hikes loom.

  • Larry Littlefield

    Part of the problem is that since all the legislators are in on the deal, no one has to pay a psychic price for this. Those Upstate are free to go on sneering at New York City residents as a bunch of freeloaders riding on their backs.

    And what do downstate legislators get as part of the deal? Member item funding and other personal handouts.

  • Allan

    I never understood why there isn’t a secession movement to seperate NYC from the state. Same with Chicago in IL. When your city has 50% of the population of the state and like 80% of the income (rough guesses), it only makes sense

  • Dave

    It is a bit more complicated than that. While most of the taxes that NYS collects on behalf of the MTA are only collected downstate, there is one tax that is collected statewide — the “Long Lines Tax.” This tax is on the intrastate portion of interstate phone calls. i believe that the revenue that the State is sending to the upstate authorities is that portion of the long lines tax revenue that is NOT collected in the downstate region.

  • Noah Kazis

    Dave,

    Actually, there are four main taxes dedicated to transit. The corporate and sales tax surcharges are only paid downstate, and only go to the MTA. The long lines tax, which you refer to, also only goes to the MTA. The fourth tax, on petroleum businesses, goes both to the MTA and to upstate transit; it is the sole dedicated tax for upstate, I believe.

    And that’s just for these two transit funds; there are other, smaller programs out there too. This is decidedly not a comprehensive accounting of every dollar in the budget; rather, it’s a good data point for comparing the different choices Albany makes about transit spending.

  • Phil

    I guess I don’t understand the “dedicated” part. Where do the tax monies actually go? Do they go to the state to be held in trust for the MTA, in which case the MTA is the beneficial owner of the money, or is it a tax that just says, we’re going to send this to the MTA when we do our budget, but there is no actual legal restriction preventing the state from spending for some other purpose?

    Because it all sounds like the latter to me, otherwise the MTA, and the City could sue, I would think.

  • BicyclesOnly

    What Phil said.

  • Allan, once in a while, city opinion leaders and politicians talk about secession from the state. Occasionally they even talk about secession from the country; one magazine, I think TimeOutNY, had an article about it back in 2004, right before the Republican convention. Usually it’s made about cultural differences on the federal level (the city’s way more liberal than the country, etc.) and money on the state level (Downstate ships gobs of money both Upstate and to Washington). In fact some Long Island pols are threatening secession over tax imbalance issues, hoping to take the city and Westchester with them.

  • Westchesterite

    Although I agree with the point that the state should not take MTA funds from the MTA, I wonder if there is a political dimension that we’re ignoring. Transit has very strong support downstate, particularly in NYC. Transit has weak support upstate. Couldn’t we make an argument that by subsidizing upstate transit, we can build a broader coalition of transit supporters upstate that will help us in future fights for transit in the legislature and maybe even Washington?

ALSO ON STREETSBLOG

Albany Didn’t “Cut” the MTA Budget. They Stole From It.

|
As part of December’s deficit reduction package, Albany lawmakers took dedicated transit tax revenue from MTA operations to fund other parts of the state budget. The $190 million pot of money is known as the state’s 18-B obligation to the MTA. The total MTA operating budget is nearly $12 billion (with a "b"). When the […]

New York State Withholding a Fortune in Transit Taxes From MTA

|
How many ways can New York state raid the MTA piggy bank? Here’s one to keep an eye on. As the state budget deadlock drags on into its third month, Albany is withholding hundreds of millions of dollars in dedicated transit tax revenue from the MTA.  The state, which collects transit taxes before distributing the […]

Cuomo on MTA Raids: Transit Funds Are “Fungible”

|
WNYC’s Andrea Bernstein reports on the most troubling sign yet that Governor-elect Andrew Cuomo is not willing to stop Albany’s practice of raiding dedicated transit funds to plug gaps in the state budget. From a press conference yesterday: Cuomo: “I understand the concern. Everyone — especially in a declining budget environment, where we are now, […]

Vacca and Advocates to Albany: No More Transit Raids

|
Transit advocates and City Council transportation committee chair Jimmy Vacca are sounding the alarm about potential transit funding raids before the year is out. A $315 million hole has opened up in the state budget, and unless elected officials change the way they balance the state’s books, straphangers could end up paying for Albany’s fiscal […]

Can Andrew Cuomo Stop Albany From Raiding Transit Again?

|
Yesterday, City Council transportation committee chair Jimmy Vacca and leading transportation advocates sent a letter to New York state’s current leadership urging them not to raid the MTA’s dedicated funds to close an impending $315 million budget deficit. As long as the MTA’s finances are vulnerable to Albany incursions, transit riders will be at risk. […]