John Liu Wants Federal Bailout for MTA, Calls Bridge Tolls a “Distraction”

While Washington is bailing out banks and carmakers (maybe), City Council Member John Liu thinks an allocation to the MTA is in order.

On WNYC’s "The Brian Lehrer Show" Tuesday, Liu said an infusion of cash from city, state or federal coffers is the best hope for putting the transit system on solid ground, and again dismissed talk of raising revenue from adding tolls to East River bridges. Here are some of the transportation committee chair’s comments:

"It may still be a pipe dream at this point, but we have to talk about going to the federal government for assistance, because the Metropolitan Transportation Authority, it will have an impact on the regional economy if it fails. And the kind of deficit that we’re talking about, over a billion dollars, that is nothing to sneeze at. And that is just for next year."

"I don’t think you can raise fares, or cut services, or even impose new tolls to the point of being able to get out of this budget deficit. It’s a structural deficit that is so significant that some external source is required, whether it be the city paying into it, or a combination of city and state paying for it, or the federal government coming up with dollars to shore up the MTA finances."

"It would be very difficult to toll the East River bridges. It’s been bandied about for nearly a hundred years. It’s never gone over well. I think it’s right now just a distraction from getting at the real solution."

"Congestion pricing was far more comprehensive. Anybody who was entering a certain area, no matter how they were getting in, was going to pay the fee. And that fee was going to be invested in new mass transit resources, not simply to plug an MTA deficit. That’s a big distinction here."

"If you look at the structural deficit right now, a lot of it was a result of the state pulling out its support for capital projects and having the MTA foot the bill. If the federal government was able to include New York City, the New York metropolitan area and the MTA as part of its infrastructure investments, then it would free up a great deal of money that otherwise would be used to service debt in the coming years. That would not help us immediately with the budget deficit but it certainly would help us with the out years where the deficit is projected to be far greater."

Liu isn’t the only New York lawmaker asking for aid, as Senator Chuck Schumer has also called on the incoming Obama administration for help "from Broadway to Babylon to Buffalo."

While no one sees bridge tolls as a cure-all for the MTA’s problems, are they, as Liu says, a "distraction"? Or are such measures — which are expected to be part of the upcoming Ravitch Commission report — necessary for the agency’s long-term viability, rather than relying on the "pipe dream" of federal aid?

  • For starters, there’s no guarantee there will be a whole lot of money for Obama to work with, as the recent news about taxpayer bailout funds being flushed down the drain on Wall Street bonuses indicates. But assuming there is, wouldn’t fixing a structural deficiency require actually doing so?

    One of the lessons becoming crystal clear is money simply handed out with no strings attached to ensure it is spent as it is intended, to address the root causes leading to the mess in the first place, is no answer.

    I wholeheartedly disagree with with Liu – the timing couldn’t be better for measures like the bridge toll that have previously been unpopular yet could clearly go a long way towards addressing the MTA budget’s structural deficiency.

    Naomi Klein wrote this for “The Nation” today, about Obama and the measures he could take to solve the country’s economic problems, which I think applies quite aptly to this case as well:

    Obama [has] a window to disregard the calls for a seamless transition and do the hard stuff first. Few will be able to blame him for a crisis that clearly predates him, or fault him for honoring the clearly expressed wishes of the electorate. The longer he waits, however, the more memories fade.

    When transferring power from a functional, trustworthy regime, everyone favors a smooth transition. When exiting an era marked by criminality and bankrupt ideology, a little rockiness at the start would be a very good sign.

  • Larry Littlefield

    See my comments in today’s news about Skelos.

    Here we have another pol promising no fare increases, no tax increases, free roads and bridges, everyone gets, no one pays, thanks to him.

    And the money should come from somewhere.

    The game is going to go on until all the money is gone, it is impossible to borrow more, and everything collapses. So why raise fares or tolls to prevent collapse at this point?

    Thank you to the precient bike advocates. Now that I’m following along, I at least don’t have to worry about the collapse of the transit system, and never expected to get Social Security of Medicare anyway. If only my younger daughter can get through three years of high school before being forced to drop out.

  • Larry: Note that Obama supports extending the social security tax to incomes over $250,000. Ultimately, I expect the “donut hole” between roughly $100,000 and $250,000 will be closed. Of course, this doesn’t deal with private pensions, but it does show that some people are thinking about how to pay for the increasing number of retirees, rather than just piling up debt endlessly.

    Not a complete solution, but maybe it can give you something you need (and something that is one of Obama’s favorite words): hope.

  • Was Liu in favor of CP? I don’t honestly remember; in any case, I’m not sure I see the distinction he’s drawing here.

  • Larry Littlefield

    “Note that Obama supports extending the social security tax to incomes over $250,000. Ultimately, I expect the ‘donut hole’ between roughly $100,000 and $250,000 will be closed.”

    “Not a complete solution, but maybe it can give you something you need (and something that is one of Obama’s favorite words): hope.”

    Nope, anger.

    Yes we are in a situation where we have a choice of diminished benefits, a later retirement age, or even higher future taxes, but before hitting our kids with the taxes or us with the later age, I want someone to acknowledge what has happened.

    In 1983 they increased the retirement age for those of my generation and younger and hiked up regressive payroll taxes to “save social security.” The excess payroll taxes were spent by the federal government (and used to offset lower income taxes). Now the rest of the federal government owes Social Security money, and Obama wants to raise payroll taxes to pay that back.

    Could he at least acknowledge that we (and/or our children) will be paying a second time for the same thing?

    And why the HELL should the money to pay back Social Security come from payroll taxes and not income taxes, which cover investment and retirement income as well? So the generations that robbed all our post 1983 extra payroll taxes doesn’t have to pay anything and our kids do?

    Sounds like something Lew Fidler would propose.

  • Josh, Liu was in favor of congestion pricing and wanted guarantees that the money would go to transit.

  • Larry, My point is not that this is the ideal tax but just that Obama is looking for ways to get people paying now for benefits – rather than promising something for nothing and increasing the amount of debt that falls on future generations (which you rightly complain that we usually do).

    Incidentally, the higher retirement age is a function of longer life spans. Life expectancy for males has increased from 66 years in 1950 to 75 years today, but retirement age has only increased from 65 years in 1950 to 67 years today.

    If they can pay your benefits, you are much better off than the first generation on Social Security.

  • Larry Littlefield

    “Incidentally, the higher retirement age is a function of longer life spans.”

    There is that, which is no one’s fault, which is why I favor solving the problem by eliminating the specific retirement age, freezing the ratio of workers to beneficiaries at three, and allowing people to retire as existing retirees die off and enough young workers are available to support them.

    That still means, however, that for the past 25 years a regressive tax on wages only has been substituted for a progressive tax on all income, due to the extra payroll tax revenues in excess of Social Security spending. I certainly don’t want to add to that.

  • I agree that Social Security is a regressive tax, but we would make it a bit less regressive by deducting Social Security from all incomes rather, not just from incomes up to about $100,000 dollars.

    Then it would begin to approach the sort of flat tax that conservatives sometimes advocate. Still more regressive than the flat tax, because it exempts all income except wages and salaries – but at least Bill Gates would have to pay it on his entire salary, not just on a few percent of his salary.

    Again, my main point is not about ideal tax policy but just about the fact that Obama is talking about getting people to pay for benefits, rather than promising benefits for nothing and failing to mention that future generations will have to pay the costs.

    Obama also supports an all-auction cap-and-trade system to control greenhouse gas emissions, which could raise lots of revenue for the government (without being called a tax).

    You are right that, for the last few decades, our usual fiscal policy has been similar to our usual environmental policy: indulge ourselves now, and defer the costs to the future.

  • Larry Littlefield

    “You are right that, for the last few decades, our usual fiscal policy has been similar to our usual environmental policy: indulge ourselves now, and defer the costs to the future.”

    I get the feeling you’re my age or older. It has been extremely frustrating watching all the irresponsible decisions over all the years, public and private. Responsible members of our generation have been outvoted, and even with the consequences in our face, we still have to listen to irresponsible voices.

    We’ve sold out the future for decades. Not it is here. In a few months it will be time to ask — how has that worked out for you? And don’t expect me to pay for you to continue to live more extravagantly than I and others are content to do.

    Why is the oil price collapsing? Because peak debt hit before peak oil.


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