Governor Cuomo Calls for Annual Transit Raids Until 2031

Transit advocates are sounding the alarm as Governor Cuomo again tries to quietly raid dedicated transit funds and back away from the state’s promises to the MTA so he can plug Albany’s budget holes.

Photo: Pat Arnow/Flickr
Photo: Pat Arnow/Flickr

Most years since 2009, the state has yanked funds from dedicated transit taxes to fund other parts of its budget. The pattern continues in this year’s budget, which includes a $40 million raid that pushes the state’s debt obligations onto straphangers. Worse still is that the accompanying financial plan projects a $20 million raid for several years afterward — all for MTA bonds that the state had previously agreed to pay from its general fund.

This is the first time advocates can recall a governor planning transit raids years in advance, not as a last-minute budget gap measure.

“The repayment of the bonds is a state responsibility,” said Gene Russianoff of the Straphangers Campaign. “The bottom line is that the state’s not meeting its promise.”

The Cuomo administration says its actions don’t amount to a transit raid because the bonds in question support MTA infrastructure projects. The executive budget also includes an $85 million increase in operating assistance to the MTA over last year, so the MTA comes out $45 million ahead this year.

There are two problems with this argument. First, the governor is taking away revenue dedicated specifically to the MTA’s daily operations to pay off capital bonds that are the state’s responsibility. Second, the $85 million Cuomo is adding only applies to this year, but the financial plan calls for $20 million raids every year, which would total nearly $350 million before the bonds are paid off in 2031.

While the annual raids are not locked in place, given this year’s $40 million raid, they could escalate if the governor thinks the legislature will go along with it. “This has the nervous-making potential of continuing to spiral up,” Russianoff said, adding that he had never before seen a governor schedule transit raids in advance like this.

“These diversions have always been in the heat of the moment, when they’re trying to find money for budgets,” said Nadine Lemmon of Tri-State Transportation Campaign. “It’s a clear policy statement that they’re putting forward.”

Cuomo’s budget also continues to provide $310 million in annual operating assistance to the MTA, a practice the governor began after he signed a partial rollback of the Payroll Mobility Tax in 2011. The $310 million is intended to make up for lost revenue that the full PMT would have generated. But, as Tri-State notes, the number of jobs in the New York region — and the potential revenue generated by the tax — has increased since 2011, while the governor’s contribution has stayed flat at $310 million each year. The MTA is likely missing out on millions of dollars in revenue, despite the governor’s promise to make up the shortfall.

The governor’s budget has been submitted to the legislature, which holds the key to stopping Cuomo’s transit raids. Last year, the Senate didn’t include Cuomo’s $20 million raid in its budget, but it survived in the Assembly and was ultimately signed into law.

This time around, key Assembly members are speaking up. “It’s a grab and he shouldn’t do it,” Assembly Member James Brennan, chair of the committee on corporations, authorities and commissions, told the Daily News. “There are many possible uses of these funds that would benefit the riding public, from improved maintenance to restoration of service to mitigating fare hikes.”

Advocates hope a forceful response from both chambers will compel the governor to retreat from his plan to raid the MTA over the next few years. “If the legislature puts their foot down, and says that this is a diversion and it should not happen,” Lemmon said, “Then they’re going to have to go back and revise the financial plan.”

“The problem,” Russianoff said, “is that the state’s reneging on a basic commitment.”

  • Mark Walker

    What are the current deficits in MTA’s operating and capital budgets?

  • Eff it – I’m buying a car.

    Andrew Cuomo hates train people.

  • Anxiously Awaiting Bikeshare

    Just raise taxes! It is so easy and no one other than BDB is willing to do it and he doesn’t even have the power. A real shame.

  • cp

    why shouldn’t operational money going towards paying off capital projects?

  • The problem is that when these bonds were issued, the state promised to pay them off. Now Cuomo has broken that promise so he can fiddle with the rest of the state budget. It’s cost-shifting onto straphangers and he shouldn’t get away with it.

  • duh

    BDB is willing to do it and he doesn’t even have the power.

    That’s why he’s talking about it.

  • ocschwar

    I think I can find a nice fat piece to trim off the budget and obviate the need for this:

    Cancel the new TZB

  • StepUpAndSaySomething

    So the quicker Cuomo gets out of office, the quicker the raiding on straphangers ends?

  • anondasdas

    No, it’s established precedent now. Next governor will continue it.

  • Larry Littlefield

    The MTA has a massive surplus!!!

    It’s borrowing slightly less than expected.

  • Larry Littlefield

    “It’s a grab and he shouldn’t do it,” Assembly Member James Brennan, chair of the committee on corporations, authorities and commissions, told the Daily News.”

    Now that Generation Greed has foisted 20 years of MTA (and road) maintenance onto future generations by borrowing for it, what is Brennan’s big idea to slow the MTA debt explosion?

    Why, have the state borrow half the money instead! That wouldn’t be MTA debt, so it’s OK!

    Nonsense. Anyone who thinks that by making it state debt Upstate New York could be made to pay it off hasn’t been there. No difference. But they can’t think of anything else but to keep borrowing, keep putting off pension obligations, keep robbing future generations WHO ARE POORER ON AVERAGE!

    That’s the untold story here. Cuomo’s raid. Brennan’s lie. The MTA’s doom.

  • anondasdas

    By making it state debt when the state raises taxes to balance their budget LI politicians don’t complain and say BUT I DRIVE EVERYWHERE WHY AM I PAYING FOR THE CITY’S TRANSIT!?!? and then proceed to use the courts to hold up any such taxes. By making it less clear what the taxes are funding it might leave them more palatable. And given how much more upstate receives from albany than they pay in, they aren’t covering the costs of anything downstate.

  • JK

    The state, under Pataki, issued the bonds in question in 2002 as part of a number of maneuvers, including a big debt refi, aimed at stabilizing MTA finances. From 03 until 2012 the state met its obligation to pay the debt on the bonds. Last year, Gov Cuomo took $20m in MTA dedicated taxes to pay for the state’s payment. A big problem with dedicated taxes is that Albany collects them and then appropriates them to the MTA and other transit agencies. If transit dedicated funds went straight into agency accounts, like tolls do, we wouldn’t have this endless monkey business.

  • Bolwerk

    We should be borrowing like hell right now. I doubt the state is going to enjoy lower interest rates for the foreseeable future.

    It’s not borrowing that’s the problem but why we’re borrowing. It should be spent on massive system expansion, which has to be borrowed for no matter when it’s done. Instead we get virtually nil system expansion and obligations to pay people for not working in the future.

  • Rock Boogie

    Hes a dick!!!

  • Rock Boogie

    So right JK

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