Jim Brennan’s Transpo $ Plan: Gas Tax, Income Tax, and Forced City Funding

A bill from Assembly Member Jim Brennan, who chairs the Committee on Corporations, Authorities and Commissions, would create a transportation finance authority to collect new taxes and help fund the MTA as well as roads, bridges, and transit statewide. It’s the first major transportation funding proposal to come out of Albany this year.

Brennan's bill marks the start of transportation funding debates in Albany. Photo: Wally Gobetz/Flickr
Brennan’s bill marks the start of transportation funding debates in Albany. Photo: Wally Gobetz/Flickr

“Time is growing short,” Brennan said this afternoon. The legislative session ends in mid-June, and state transportation agencies need assurances about funding before they can begin projects. “This is just a proposal,” he said. “It’s the first piece of legislation to make a proposal.”

The revenue in Brennan’s plan would come from three sources:

  • A 10-cent increase in the state gas tax would yield $500 million annually.
  • A half-percent income tax increase on New Yorkers earning between $500,000 and $2 million each year would raise their rate from 6.85 percent to 7.35 percent, bringing in $750 million annually.
  • A mandatory contribution from New York City, starting at $60 million in the first year and adding an additional $60 million each year until the city’s contribution is capped at $300 million annually.

That makes for a total $1.55 billion annually, which would be bonded against to provide $20 billion in capital funding. Of that, $12 billion would go to the MTA, nearly filling the $15.2 billion gap in its capital program, and the remaining $8 billion would be distributed through the New York State Department of Transportation, which also has a long-term gap in its capital program.

Although Brennan supports and says he would vote for the Move NY plan, road pricing is not included in his bill, so it lacks most of the traffic-busting, safety-enhancing benefits of toll reform. Forcing the city’s hand through state legislation is also a dubious proposition to say the least.

Still, advocates welcomed the bill as the start of negotiations. “It’s important to get all the various funding options out there,” said Nadine Lemmon of Tri-State Transportation Campaign. “I hope he inspires folks to come forward with other ideas, including the governor.”

“All these options need to be on the table, whether it’s a gas tax or an income tax,” said Move NY champion “Gridlock” Sam Schwartz, who noted that, unlike other funding plans, toll reform is more politically palatable and would generate new funding while also addressing congestion problems.

“The Brennan proposal could be a complement to the Move NY proposal,” he said. “I think it’s terrific that we’re getting… legislators to begin introducing legislation to fully fund the MTA and to also fund roads and bridges.”

Neither the mayor nor the governor had much to say about the Brennan proposal today.

“Mayor de Blasio has made clear that years of underfunding from the federal and state governments have left our roads, bridges, and transit in serious need,” said de Blasio spokesperson Amy Spitalnick. “The administration is committed to investing in our infrastructure, which will only come with strong partnership between all levels of government. We are reviewing this specific legislation.”

Governor Cuomo’s office had no comment.

  • BBnet3000

    That makes for a total $1.55 billion annually, which would be bonded against to provide $20 billion in capital funding.

    So this will have to be paid back with interest, but for the most part won’t be going to uses that increase revenue. What portion of the MTA’s operating budget is already dedicated to debt service again?

  • Larry Littlefield

    What’s Brennan’s plan for five years from now? Retire to Florida with a tax-free pension?

    The MTA budget gap is $3 billion per year, but we are being ripped off by contractors. We need $2 billion per year, plus an end to the ripoffs and the borrowing for ongoing normal replacement. Plus money for the roads.

    Brennan proposes almost enough revenues to cover the MTA portion, but only if Generation Greed can cash in the next 30 years of revenues right now and the placard class doesn’t get hit with tolls.

    How about taxing retirement income on the same basis as work income? They’re the ones that ran up this debt, after all.

    “Mayor de Blasio has made clear that years of underfunding from the federal and state governments have left our roads, bridges, and transit in serious need.”

    Surely he means the city and state governments? The federal government is the only level to put up actual cash.

  • Daniel

    I’m glad someone has a proposal on the table. But the Albany obsession with borrowing and spending has got to stop. Seriously, if you pass something like this plus MoveNY you have the funds to pay for necessary transportation spending in perpetuity. Borrowing now and making the needed repairs will only mean we can’t afford needed repairs 5 years down the line and we’ll end up with more neglect.

    I know I’m preaching to the choir in this group, but it was not painting the Brooklyn bridge every 10 years for a few million dollars that caused it to rust and cost 600 million to paint and repair. If 1.5 billion a year is all we can raise, lets only spend that much on our transportation network. That is enough to keep steel and asphalt painted. I know we can do more with MoveNY, but maybe that has to wait until next year.

  • ahwr

    Brennan’s plan together with MoveNY gets you two billion a year for the MTA. Neither has passed, but the rough frameworks are in place.

    What has to happen to cut down on costs for the last billion?

  • Joe R.

    The income tax increase has me a bit concerned. I’m not and probably never will be in the income range for which it will apply, and if I was frankly it wouldn’t bother me paying an extra half percent per year to help mass transit. What does concern me is income tax rate increases seem to has a nasty way of trickling down into income ranges where they really do hurt people. How can we be sure the tax increase won’t affect people making $250K two years after it initially passes because we still need more mass transit funding? And suppose it’s still not enough so those making $100K pay half a percent more a year later. When this line of thought continues, eventually the tax increase starts to affect people like me who really can’t afford it.

    On the flip side, I’m perfectly fine with bumping up marginal rates for $1 million plus incomes if it turns out more money is needed. And if I was lucky enough to be in that tax bracket, I wouldn’t be complaining about it, either.

  • RoeJ

    You’d think with all the free breakfast you have thrown at you you’d be able to spare five bucks per grand in income.

  • chekpeds

    The assignment of $ 300 million to the city is a perfect placeholder for a future discussion of the Move NY plan, without encumbering the funding discussion with a still controversial item in Albany. And then Move NY could cover some of the operational deficit.

    But I wish there was an audit of the way MTA manages projects and contractors. The east side acess is costing TWICE as much as planned . The 7 is now 18 months late with no opening committed and everymonth costs a ton of money. This audit could potentially cut the capital needs by 25% .

  • Larry Littlefield

    Instead of putting out a proposal and taking the lowest bidder, put on a preliminary framework and a price. A price that reverses some of the excess cost inflation of the past 15-plus years.

    Nothing happens until someone meets the price with a proposal that works and that will last 60-70 years until the MTA is in a position to do the same work again. If we have to wait 10 years and then do a whole bunch of work at once, we wait the 10 years, patch as needed and pay down our debts.

  • Fool

    One of the root causes of the general level of inflated costs is the very fact that the jobs are heavily audited.
    -Workforce utilization reports.
    -DBE/WBE/MBE goals.
    -Prevailing Wage
    -Sustainability Goals.
    -Laws preventing overtime unless governor declares an emergency.
    -Buy American Laws.
    -etc…

    MTA, and other agency’s, have armies of compliance personnel to enforce the laws society has determined need to be in effect during a capital project. When you cannot manage your sourcing of Labor or the Material they are going to install, you are pretty much stuck with what we have.

  • Larry Littlefield

    Maybe Brennan & Co. could do the honest thing and have the additional taxes pay for PAST MTA debt, and excess pension costs due to past pension underfunding and retroactive increases enacted by the legislature.

    Absent these burdens the MTA already has enough dedicated tax revenues to pay for what we are getting today.

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