More Bad News for Transit Funding: Payroll Tax Comes Up Lame Again

The MTA’s budget picture took another turn for the worse today. The payroll tax instituted as part of last year’s funding package continues to raise far less revenue than expected. Which means that even if the extensive service cuts on the table take effect, the MTA will still have to deal with a $400 million deficit in 2010.

What’s more, the MTA noted in a statement today that the payroll tax shortfall is probably a fact of life. The agency now projects revenue from the tax to come up $200 million short of what was predicted each year after 2010. In other words, the payroll tax just doesn’t raise the money it was supposed to. And even that wasn’t enough to shore up the MTA’s finances in the first place.

The MTA must maintain a balanced budget, which leaves two options: increasing revenues or decreasing costs. The Daily News floats the possibility of fare hikes on top of next year’s planned 7.5 percent increase, while noting that those fighting to overturn service cuts — including the phasing out of student MetroCards — now have a steeper hill to climb.

The current round of service cuts is painful enough. With transit funding absorbing body blows every few weeks, how long will riders have to wait before New York’s elected leaders put more options on the table?

In yesterday’s Huffington Post, John Petro of the Drum Major Institute laid out the stakes, arguing that congestion pricing "is the only option left to Albany and City Hall." Without it, Petro writes, "the cycle of short-term fix followed by financial crisis will continue, and there won’t be much mass transit system to save anymore."

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