Another Bad Transit Plan from the State Senate

So, just in time for Earth Day, the State Senate has proposed an MTA rescue plan that’s bad for both business and the environment. Here’s a refresher on the basics: The plan calls for an eight percent hike in transit fares and existing tolls, and a higher payroll tax (85 percent of the non-hike revenue comes from this one source), combined with a smattering of fees on renting and owning cars. Half of the $190 million from a new $1 "drop charge" on cabs won’t even help the New Yorkers who pay it, going instead to fund bridge and highway projects outside the city.

Not only will the piecemeal funding approach likely have the MTA begging again within months, but these particular funding streams will make the city’s traffic woes even worse, all while forcing New York City businesses and the city’s car-free majority to shoulder much of the burden. It’s a poor substitute for the Ravitch plan or congestion pricing. Here’s why:

  1. Raising tolls on MTA crossings while keeping East and Harlem River bridges free gives car commuters and truckers even more incentive to detour across city streets to the free crossings. Neighborhoods like Downtown Brooklyn, Long Island City, Williamsburg and the Lower East Side that are already pulverized by traffic will see things get worse.  
  2. Raising fees on car ownership through higher registration and licensing fees does nothing to discourage car use, and may actually encourage people to drive more in order to get more bang for their buck. Using tolls or congestion fees to price driving would have the opposite effect.
  3. Raising the cost of car sharing, rentals and taxis makes it tougher to live without a car. And, like higher ownership fees, increasing these one-time charges encourages renters to maximize their driving. Congestion pricing or tolls are far superior.
  4. Unlike private motorists taxi drivers faced with higher fees will increase their driving. Why? Since passengers will choose to ride less, given the higher fare, cabbies will have to drive more to recoup the flat fee they pay to operate a taxi.
  5. Using cab fees to pay for highway and bridge projects outside of the city transfers wealth from the dense, environmentally sustainable city to the car-dependent suburbs. If anything, taxes on cabs should fund the city bridges and streets used by those cabs.
  • grzond

    While I agree that using Taxis to pay for road repairs upstate is a terrible idea, it’s disingenuous to imply that the money would exclusively be spent in suburban regions. Not all of Upstate NY is suburban, and it’s certainly not all a suburb of NYC.

  • da

    So what do we do now? Ask our reps to oppose this plan? Anyone who dares oppose the plan will no doubt be portrayed as “standing in the way of the MTA bailout that city residents so desperately need”.

  • Shemp

    Moreover, on grzond’s point, there is plenty of state road and bridge infrastructure within NYC, while every MTA capital program also contains a signficant suburban component.

  • LJ

    This is an upside down revenue plan. It’s all flat taxes except for the hikes for toll payers and subway riders. Since when was a payroll tax so wonderful? This graduated payroll tax is a tax on density. Management looks at labor as a cost, whether it’s wages, benefits or taxes. This graduated payroll tax raises the cost of doing business in the city. Are there details on this plan? Will they bond all the tax revenue over a couple years? How many years? How much goes to operating support and how much to capital? This plan could be worse than what you describe if all the revenue is bonded over a couple of years and the MTA has to come back again.

  • it’s disingenuous to imply that the money would exclusively be spent in suburban regions

    That’s not the point. The point is that money raised exclusively in NYC is being spent exclusively outside NYC. People start revolutions over stuff like this.

    there is plenty of state road and bridge infrastructure within NYC

    Irrelevant. The details specify that taxi fees will pay for upstate roads and bridges.

  • LN

    The Working Families Party just sent out an email telling everyone to support this one:

  • fdr

    Saying that this plan makes traffic congestion worse is beside the point. The Senators will tell the subway riding public they saved the MTA fare, or at least prevented most of the threatened increase. They’ll be heroes.

  • taxi tax

    MTA ‘taxi tax’ hits practical roadblock
    By Daniel Massey and Erik Engquist

    Published: April 21, 2009 – 3:46 pm

    Taxi industry leaders were baffled at how a key piece of the latest MTA-bailout compromise plan—a $1 per taxi ride surcharge that accounts for nearly $200 million of the $1.7 billion proposal—would be collected by government officials.

    “We can’t figure that out,” said Ethan Gerber, of the Greater New York Taxi Association, which represents 1,500 medallion owners. “Most people still pay by cash.”

    A spokesman for Senate Majority Leader Malcolm Smith said the logistics of the surcharge collection have yet to be determined. “I don’t think that has been worked out,” he said. “There’s of course a technical aspect, just as there was for the [idea of] collecting tolls [on East and Harlem river bridges].”

    The $1.8 billion proposal includes a payroll tax of 34 cents per $100 of wages, a $1 fee per trip for taxis, a 25% increase in the fee for driver’s licenses, a $25 fee for vehicle registration and a fee on rental cars. The taxes and fees would affect the 12-county region around New York City that is served by the MTA.

    The taxi portion of the plan especially mystified Mr. Gerber. “Private unsubsidized transportation is being used to subsidize public subsidized transportation that doesn’t work because of its own inefficiencies,” he said.

  • grzond

    Re: Rhywun
    I agree. My point was merely that the debate is starting to once again characterize the state as an upstate vs. downstate acrimonious battle and generalizations like this only hurt the problem.

    I agree 100% that the Taxi plan is bogus, and that the state’s ownership of bridges and roads in NYC is irrelevant to the discussion.

  • zgori

    Gee, I was just thinking that car rentals in this city were too cheap. We really should make them so expensive, not to mention unpleasant and unreliable, that people without cars are never tempted to try to leave the city. That way there will be more roads available for elite suburban drivers, particularly those with Lexus RS400s.

  • Congestion is not beside the point; the options for making up the revenue shortfall have to be looked at from all sides. The biggest merit of tolling is that it can actually sustain the needed revenue stream; the hodgepodge of sources favored by the Senate would collapse if forced to produce the money the MTA ultimately needs. But also importantly, tolling’s side effects are positive: fewer unnecessary trips, cleaner air, faster busses, saner streets. Payroll taxes have only negative side effects, and additional fees (e.g.) on drivers licenses obtusely penalize New Yorkers for being permitted to drive—anywhere in the world.

    The obvious, sensible, and fair way to make auto-use a part of the revenue solution is tolling that applies to taxis, rental cars, and private cars alike. The Senate is acting increasingly quixotic in their prolonged efforts to deny this simple truth.

  • Pete

    So I emailed my State Senator (Velmette Montgomery) this morning, complaining about the new plan.

    The result? I got two copies of a response they sent me a few weeks ago, when I first complained to them, that canned email that I posted here on the site. No mention of the current situation. Some lazy staffer just copied & pasted. And then sent it out *twice*. With two different subjects.

    So, the takeaways:

    1) Senator Montgomery’s office doesn’t know how to use email.
    2) Senator Montgomery’s office doesn’t know how to communicate with its’ constituents.
    3) Senator Montgomery continues to support plans that aren’t good for the transit future of New York City.

    Will someone *please* run against this woman?

  • “transportation that doesn’t work because of its own inefficiencies”

    Oh, that’s rich.

  • This plan is by far the most assinine one the Senate has come up with to date. These “ideas” do nothing but provide band-aid solutions to a huge wound. The time will come fairly quickly when the MTA will once again need some sort of bailout. As I noted in my entry about this, the time has clearly come for long term solutions to funding the MTA as anything less will not get the job done.

    Instead of acknlowedging the years of inadequate funding & coming up with long-term sustainable solutions, officials rather look for temporary fixes which will make them look like heroes to their constituents. When re-election time comes, the rank & file will keep them in office & remember how they “saved” them from doomsday.

    The circle jerk of political gamesmanship rears its ugly head once again & we are left dealing with the mess.

  • Marty Barfowitz

    I’m with you, Pete. Someone has got to run against Velmanette Montgomery. Her approach to this issue has been a complete travesty. I’m guessing that something like 20% of her constituents even own cars. Her district is relatively transit-rich too. Pathetic.

  • We need to change the terms of the debate from “bailout” or “rescue plan” — which invite pejorative comparisons between the MTA and AIG — and talk more about “funding,” “longterm financial planning,” etc.

  • Niccolo Machiavelli

    We are way beyond such semantic nuance. This has been a crescendo of crisis policy making for the last several years. We can’t go back now to good focus group marketing strategies.


Road Pricing Still the Big Missing Piece in MTA Funding Puzzle

It’s been 20 months since the state legislature passed an MTA funding package with a conspicuous missing piece. In early 2009, the transit agency was reeling from the recession, and straphangers were about to get walloped by deep service cuts and a 23 percent fare hike. Albany responded by enacting just a partial fix: a […]

IBO: MTA Fares on Pace to Rise 50 Percent Over Next Decade

The 2009 MTA funding package passed by Albany included a plan to increase fares and tolls every other year. The most recent of those fare hikes, implemented in March, increased fares 8.4 percent, with the MTA anticipating another increase in 2015. If this pattern continued for the next decade, fares would rise 50 percent, to […]