Cuomo’s Transit Budget Is a Confusing Jumble of Raids and Transfers
12:31 PM EST on February 5, 2015
It's state budget season! Governor Andrew Cuomo's executive budget is chock-a-block with raids of dedicated transit funds, questionable transfers, and toll cuts doled out as election-year favors. It's a mess that doesn't answer how the state will close the $15.2 billion gap in the MTA capital program.
Cuomo's attempts to satisfy MTA haters in the suburbs, shuffle bits and pieces to the capital program, and squeeze money out of the agency as surreptitiously as possible -- without a noticeable effect on service -- create a confusing blur in his transit budget. The overall effect is a lack of transparency, because it's difficult to tell whether funds are being used for their intended purpose.
Here's our guide to the tangle of transit funding proposals in the governor's budget, starting with MTA operations.
Stealing from operations to pay for capital. In what the Tri-State Transportation Campaign calls "an unprecedented and troubling move," Cuomo's budget would shift $121.5 million from transit operations to pay for capital programs. More than 85 percent of those funds would go to the MTA capital plan; the rest would go to other metro area transit operators. This makes the capital plan's balance sheet look better while harming day-to-day operations.
MTA raids continue. Remember how the governor raided the MTA's operating budget to take care of debt the state had agreed to pay? In 2013, he took out $20 million, followed by $30 million last year. Now, the governor is proposing another $20 million raid, and more to come in the future.
Extra cash for operations? Even as he's raiding MTA operations with one hand, the governor is proposing an additional $37 million in operating assistance from the state's general fund with the other. But is this really coming from general taxes? The State Senate claims that the increase is attributable not to Cuomo's largesse, but an increase in revenue from the Payroll Mobility Tax.
Falling short on making the PMT whole. In 2011, Cuomo trimmed the payroll tax while promising to fill the hole with a transfer from the state's general fund. This year, the general fund transfer will total $309 million, in line with previous budgets. But while the MTA expects payroll tax revenues to increase 23 percent by 2018, it projects replacement revenues from the state will remain flat [PDF]. The bottom line: The 2011 deal is on track to hurt straphangers in the long run. It enabled Cuomo to appease suburban politicos immediately while delaying the loss of tens of millions of dollars in annual revenue for transit operations.
Meanwhile, suburban Republicans continue to strongly oppose the payroll tax. The Senate recommends phasing it out entirely and replacing it with one-time cash from the state's windfall $5.4 billion bank settlement [PDF]. Agreeing to this reckless plan would quickly starve the transit system of funds needed to keep trains and buses running.
Funding Cuomo's Verrazano toll cut: Last year, the governor announced an election year toll cut for Staten Islanders and commercial drivers on the Verrazano Narrows Bridge, with the state budget and the MTA splitting the tab. Cuomo's budget does not come up with the state's half, leaving it to the legislature to find funding for the program or let it expire.
In addition to raiding the operating budget to pay for capital expenses, the budget contains a few more maneuvers related to the $15.2 billion gap in the MTA capital program.
State assistance to the capital plan declines from previous levels. The MTA had not been counting on any revenue from the state, although it was widely expected. Now, the governor has put forth the first of five $150 million installments from the state budget to contribute $750 million of bondable funds over five years to the capital plan. But this amount is actually a decrease from the $770 million over three years provided to the previous capital plan [PDF].
Bank settlement windfall to ease capital crunch. As announced last month, the governor is sending $250 million of bank settlement funding to construction of four new Metro-North stations in the Bronx with service to Penn Station. Cuomo also wants to use $150 million in settlement cash to subsidize parking garages at suburban Long Island Rail Road and Metro-North stations. To put this in perspective, nearly $1.3 billion in settlement money is going to the Thruway Authority and Tappan Zee replacement project to keep tolls low.
Don't forget the AirTrain. The promised AirTrain from Willets Point to LaGuardia hadn't been included in the MTA's capital plan until Cuomo announced it last month. The governor said it would cost $450 million, but MTA chief Tom Prendergast says the cost could go as high as $1 billion. No funds have been publicly identified to pay for this pet project.
The MTA says it is producing a new estimate of the capital program shortfall as it prepares an updated version of its plan for approval in Albany. A joint legislative hearing on the MTA's budget had been scheduled for last Monday, but was postponed due to weather.
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