Ravitch Unveils Broad MTA Rescue Package

Former MTA chief Richard Ravitch stood with Governor David Paterson and Mayor Michael Bloomberg this morning to discuss details of his commission’s plan to keep the cash-starved MTA afloat both in the short-term and in years to come. Streetsblog’s Ben Fried attended the news conference and will have more later. For now, here are a few highlights:

  • The Ravitch plan would bring a "mobility tax" of 33 cents per $100 that would be levied on payrolls across the region, expected to raise $1.5 billion annually.
  • As expected, the proposals include tolls on East River and Harlem River bridges, projected to bring in net revenues of $600 million per year.
  • Ravitch described the plan, to be translated into legislation immediately by the governor’s office, as "a major stimulus bill for New York State," which would generate up to $15 billion in wages.
  • The plan recommends the MTA be allowed to impose fare increases not more than every two years, pegged at the rate of inflation, without public hearings. 
  • Ravitch described his commission’s work as "an effort to spread the burden among the largest group that one possibly can." 
  • Governor Paterson expressed full support for the recommendations. Echoing Ravitch, Paterson described the proposals as "holistic." Said the governor: "The ways in which responsibility may have been shirked, or ignored, in the past, to live for another day — that day has come, and we’re going to have to make those tough choices."
  • Oddly, perhaps, MTA head Lee Sander did not participate in the announcement.


  • Larry Littlefield

    It’s not enough money.

    All this strum and drang, and we are going into deferred replacement and decline in the capital program, unless there is another $2 billion per year in there somewhere.

  • Larry Littlefield

    From The Daily Politics:

    “The payroll tax of 33 cents per $100, would have to be paid by every single employer in the MTA service area, including the city, the state and nonprofits because “everybody in the region benefits from the transit system,” former MTA Chairman Richard Ravitch said. This would generate $1.5 billion annually and enable the MTA to borrow between $30 and $35 billion over the next five years for its capital plan, which as of today has “not one hard dollar” behind it, Ravitch said.”

    Oh my God!

    They are pushing through a permanent tax, in order to pay for just five years worth of capital expenses, most of which are just ongoing normal replacement.

    And then in 2014 we are right back in the same spot with $62 billion in debt instead of $27 billion in debt.

    SON OF A…

  • James

    Wait, hold on Larry. The report advocates for the creation of an MTA Capital Finance Authority in order to detach the debt service from the operating fund. Where did your $62 billion number come from?

    On first look, the plan does look sound enough overall but it’ll be open political warfare to get the bridges tolled.

  • Larry Littlefield

    What a disappointment, bordering on an outrage.

    Yes there are proposals for steady, regular fare increases, and tolled access to Manhattan to end toll shopping and force all motorists to pay for a share of congested Manhattan streets. These are sensible policies.

    There is also an inference that the MTA should stop prioritizing service over capital costs, meaning more long-term shut-downs to cut the cost of reconstruction. That’s painful, but I agree with it.

    This, however, is overwhelmed by a tax — an unfair tax at that — that is inadequate to cover ongoing expenses and will instead be borrowed against. The same deal that’s been going on since 2000.

    The innovation is that the debt will be shifted to an off-balance sheet entity. But that was already done in the 2005 to 2009 plan, with a 1/8 cent of extra sales tax we’ll be paying forever for (in reality) maintenance projects that will be over by the end of next year.

    (The new projects, the SAS and ESA, had an acutal bond issue voted on as required by the state constitution, if you recall).

    How desperate and ridiculous is this, in addition to being another unethical shift of costs to poorer younger generations? The Port Authority tried to get someone to underwrite a municipal bond issue. It got ZERO bids. Reported today.

  • Borrowing Larry’s Daily Politics snippet:

    “The payroll tax of 33 cents per $100, would have to be paid by every single employer in the MTA service area, including the city, the state and nonprofits because ‘everybody in the region benefits from the transit system,’ former MTA Chairman Richard Ravitch said.”

    If everybody in the region benefits from the transit system, why is it only those to whom a payroll tax would apply who are being asked to pay this “mobility tax”?

  • The payroll tax is the part that concerns me.

    Reason one: I’m an NYC-based employee of an LA-based magazine owned by a company with offices strewn throughout the country. My company might decide that its NYC-based employees are costing too much — and then I’m out of a job. I’d rather pay a $3 fare.

    Reason two: The payroll tax encourages a shell game that will enable car-centric legislators to wiggle out of tolling the bridges. And where is congestion pricing? And the vehicle registration tax? And the commuter income tax?

  • Larry Littlefield

    “The payroll tax is the part that concerns me.”

    That was yesterday’s rant for me. A 1% payroll tax, exempting all the most privileged interests — the rich, the retired — was bad enough.

    A smaller tax that is indefinate and yet would leave us right back in the same mess in five years is worse. I guess I of all people shouldn’t be surprised. Read the start of my Room 8 post from a couple of days ago, the first paragraph with the quote from The Producers.


  • Hey, did Ravitch say anything about canceling the sale of the Vanderbilt Yard to Forest City Ratner for less than half its appraised value?

  • vnm


    The tolling of the now-free East and Harlem River bridges would prevent draconian 23% toll increases on the seven bridges and two tunnels controlled by the MTA, namely, the

    Brooklyn-Battery Tunnel
    Cross Bay Bridge
    Henry Hudson Bridge
    Marine Parkway/Gil Hodges Memorial Bridge
    Queens Midtown Tunnel
    Robert F. Kennedy Bridge (nee Triborough)
    Throgg’s Neck Bridge
    Verrazano-Narrows Bridge
    Whitestone Bridge

  • Larry Littlefield

    They said when he was appointed that Ravitch had a history of telling the hard truths to elected officials. Well I read the report and there is nothing in it.

    No numbers. No discussion of how we got here, with a financial crisis despite record ridership. No discussion of who benefitted. What is said seems to imply that the entire problem is a function of the current financial crisis.

    Yes, borrowing on the MTA’s books is mentioned as having pressued the operating budget, but who benefitted from borrowing rather than paying up in the past? And then the recommendation is more borrowing, off the books?

    Mark if you are under 40, perhaps the message from the Buick of state governments is that if the job moves, you should move with it. They’re going to securitize the future until there is nothing left. They don’t seem to get that they already have, unless they are going to have the Federal Reserve print money to buy those bonds.

  • Larry, I’m having a hard time buying that old people living on fixed incomes are as bad as “the rich” sorry. I see nothing wrong with public employees having excellent pensions and I’d rather pay higher fares, taxes or tolls than compromise on that.

  • Larry Littlefield

    (Larry, I’m having a hard time buying that old people living on fixed incomes are as bad as ‘the rich’ sorry.)

    I was informed yesterday that my company has a wage freeze, as others are laid off. The “fixed income” matra is carried over from the days when there were no automatic Social Security adjustments; Social Security is going up 5.8% this year.

    Penisons are also partially adjusted for inflation in NY State, and in the event of a DE-flationary spriral, former public emloyees are still guaranteed an IN-flation adjustment of plus 1%.

    There is nothing wrong with having a set of social arrangements that make life tough for younger people (who have other advantages) and cushy for seniors — IF those arrangements are sustainable.

    But the generations now in charge are sticking those coming after with burdens they shirked while demanding benefits those younger generations will never see. And their answer to everything is to borrow more and put off the costs just a little while longer.,

  • fdr

    Maybe Lee Sander wasn’t there because the report recommends that his job be divided again into two positions, chairman and executive director, as it was before Sander took over.

  • vnm

    fdr, it’s actually the other way around. The report recommends putting executive director/CEO power back into the hands of an independent chairman/woman. It’s more of a merger than a split.


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