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Albany Reform

Who, Me? Cuomo Vetoes Lockbox Bill, Denies Raiding Transit

Hours after the MTA announced that it would be scaling back planned fare hikes in part because of better-than-expected tax receipts, Governor Cuomo vetoed two transparency bills designed to discourage Albany from siphoning away those very same dedicated transit funds. The governor capped his veto with a brazen denial: Despite getting caught raiding the MTA's budget earlier this year, Cuomo insisted that he's done no such thing.

With the news that upcoming fare hikes won't hurt so much, straphangers might wonder why Cuomo's vetoes matter. After all, if things are looking better than expected, what's the big deal?

To answer that question, let's look at the recent history of transit raids. With New York state's budget facing chronic shortfalls, Albany has diverted more than $260 million since 2009 from taxes that are supposed to be dedicated to funding transit, including multiple raids under Cuomo's watch.

The result? The MTA had to cover the shortfall with fare hikes and service cuts.

One of the bills Cuomo vetoed yesterday would have required the MTA to produce a report detailing the impacts of those post-2008 service cuts, measuring whether the projected cost savings actually materialized, and coming up with a plan to restore the lost service.

That bill overwhelmingly passed both the Assembly and Senate, but in his veto message Cuomo said the MTA has already performed an internal analysis of service cuts in line with federal guidelines and has announced $18 million in service enhancements this year. (By comparison, the systemwide cuts enacted in 2010 saved the authority $93 million.)

Though Cuomo criticized the first bill as re-litigating the past, the second, known as the transit lockbox bill, is focused squarely on preventing similar robberies in the future.

Only a constitutional amendment can force the governor's hand in budget decisions, so the lockbox bill was designed as a transparency measure instead. If transit funds are raided, it would have required a statement from the governor's budget office laying out how much is being diverted from transit and how it will hurt transit riders. By requiring the disclosure of impacts, advocates hoped that it would make the governor and state legislators less likely to propose budget raids in the first place.

A previous version of the lockbox bill passed in 2011, but it only protected the MTA, and Cuomo neutered the legislation before he signed it by stripping out the section requiring impact statements and adding a loophole that allows him to declare a fiscal emergency before proceeding with a budget raid. This year's bill was expanded to protect all transit agencies in the state, added back the impact statement requirement, and removed the "emergency" loophole. A statewide coalition of labor, transit, good government and social justice groups lined up in support of the bill, which passed both the Senate and the Assembly unanimously.

Yesterday, Cuomo vetoed the statewide lockbox bill. Here is his complete statement:

This legislation is almost identical to a bill passed by the Legislature in 2011. However, the Legislature, at that time, agreed to amend that legislation to allow the Governor to transfer funds when the Governor declares a fiscal emergency, the Governor notifies the leaders of both houses, and a statute is enacted to authorize the transfer. This bill would repudiate that agreement. I have never declared a fiscal emergency and directed such transfers. The Legislature has not articulated a sound basis to change the current law. For these reasons, I disapprove this bill.

The governor focuses on the "fiscal emergency" loophole, which was added at his request in 2011. In his veto message, Cuomo says that he's never taken advantage of that power: There have been no fiscal emergencies and no transfers under his watch, he says.

Yet the governor's 2013 executive budget included a $20 million diversion of MTA operating funds. In his budget analysis [PDF], state comptroller Thomas DiNapoli said these funds were being transferred "to pay debt service typically paid from the State’s General Fund."

Moving funds from the MTA operating budget to cover expenses that would normally be covered the state's general fund looks and sounds like a budget raid. But Assembly Member James Brennan, a sponsor of the lockbox bill, said the governor's office had an explanation: Because the diverted money would cover debt service for MTA capital program bonds, it wasn't subject to the "fiscal emergency" trigger. "There was a claim that it didn't count," Brennan said. I asked if he bought the argument, but Brennan wouldn't say.

"[The governor's] rewriting history with this veto memo," said Nadine Lemmon of Tri-State Transportation Campaign. "He's making his own definition. That's why were were so upset about that [$20 million] diversion," Lemmon said. Letting the governor ignore the few checks already in place against budget raids sets a bad precedent, she said, especially if pressure mounts to plug holes in Albany's budget.

Lockbox bill supporters blasted Cuomo for the veto. "The lockbox bill offers a simple, easy way to increase fiscal transparency and accountability, and is consistent with Governor Cuomo's stated goal of bringing an end to budget gimmicks and business as usual in Albany," said John Kaehny of Reinvent Albany in an e-mail. "There's simply no responsible excuse for raiding dedicated transit funds."

"It seems like the Governor is the only one in Albany who thinks the lockbox bill is a bad idea. This legislation was not a heavy lift," Transport Workers Union Local 100 President John Samuelsen said in a statement. "The veto is puzzling."

State Senator Marty Golden sponsored the companion bill to Brennan's legislation in the Assembly. His staff is still reviewing the governor's veto message but hopes to try again on the issue in the future. "We're disappointed with the veto," Golden said in a statement. "The bill is a common-sense mechanism that ensures funds dedicated to transit stay with transit."

Looking ahead, advocates are regrouping to figure out how to protect transit funds from budget raids, given the governor's interest in quietly keeping his hand in straphangers' pockets. "There's huge support for this bill," Lemmon said. "If anyone's going to find a silver lining, it's that we've built a good coalition, and hopefully it will get louder on transit issues -- not just this one, but ones coming down the pike."

"We'll keep working and maybe someday he'll see the light," Brennan said.

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