Here Are Six Times the MTA Was a State Entity Under Cuomo’s Control

It’s his authority. Image: NYGovCuomo/YouTube

Yesterday on WCNY’s “Capitol Pressroom,” Susan Arbetter hosted Governor Andrew Cuomo for a discussion of the MTA capital program. Lately, the governor has been pushing City Hall to fund a greater share of the authority’s investment plan. Arbetter, pressing the governor, asked a simple question: “Isn’t the MTA a state entity?”

“It’s not, actually,” Cuomo replied. “It [covers] a metropolitan downstate region.”

The answer, of course, is nonsense. The MTA’s own list of board members reminds the public that “all board members are appointed by the governor, some on the recommendation of city and county officials.” The chair of the authority serves at the governor’s behest. The MTA is chartered by the state, and taxes levied by the state help fund more than a third of its operating budget.

The governor controls more than just board appointments. At the MTA, the governor calls the shots. Perhaps these recent events will remind Cuomo that the MTA is a state entity under his control:

  1. When storms threaten the region, the governor is the one who shuts down the entire transit system.
  2. He smiled for the cameras and brokered a labor deal between Transport Workers Union Local 100 and the MTA.
  3. Early in his first term, he cut the Payroll Mobility Tax, one of the authority’s major sources of funding.
  4. Last year, he cut tolls for Staten Island motorists in an election-year ploy, then stuck the MTA with half of the bill.
  5. His budgets regularly include diversions of MTA operating funds to cover expenses in the state’s budget.
  6. Ten days ago, his own budget office directed the MTA to trim the size of its capital plan, which it did [PDF].

The list goes on. While it’s nice to see Cuomo committing to fully funding the (slightly reduced) capital program, it’s hard to take his latest comments seriously until he acknowledges the need for a new source of revenue. Generating billions of dollars over five years is no simple task.

That’s something the governor seems to understand. In fact, here’s Cuomo telling Arbetter about the cost of building new rail tunnels beneath the Hudson River: “It’s about $12 billion, Susan. That’s a lot of money,” he said, pushing for more funds from the federal government. “But we need the funding. And if we have a source of funding, we’ll go.”

Yet when it came to finding $8 billion in the state’s budget for the MTA over the next five years, Cuomo seemed less concerned. “I’m sure we can find the funds if we make it a priority, and I’m willing to make it a priority,” he said.

Arbetter brought up toll reform as a way to raise the needed revenue, but Cuomo dismissed it as somehow not his responsibility.

“If the city wants to put that idea forth next year, God bless them. Let them talk to the legislature. But I am dubious, as is the MTA, about the success of that plan politically,” he said. Then, after capping a legislative session during which he did his best to ignore MTA funding, Cuomo uncorked this gem: “We should start the capital plan for the MTA now… I don’t want to waste a year that the MTA doesn’t go forward with a capital plan because we think that maybe we can put tolls on bridges.”

Increasing direct state and local support for the MTA capital plan could and should be part of discussions about funding the system. But if Cuomo has a better plan than toll reform for a sustainable source of MTA revenue, he’s not saying what it is.

  • Why not just base it on property tax? The better the transit system, the more you want to live there. Would be more fair than a tax on income…

  • Joe R.

    Property values, and therefore property taxes, will in fact be rising near anywhere a new subway is built. Certainly that will be the case once the Second Avenue subway opens. However, NYC isn’t planning to build any new subways other than that and the #7 extension. It’s worth noting property tax receipts rose way faster than inflation over the last 2 decades. If the city had dedicated the portion of those increases above the CPI solely to transit the MTA would be in great shape. It didn’t. It squandered the extra money on yet more dubious wage/benefit/staffing increases at the DOE and the NYPD.

    The best way to help fund transit is a congestion tax. Since this is a user tax, it’s entirely under a person’s control whether or not they pay it. If someone chooses to drive in and pay the tax, then evidently it means the benefit of driving outweighs the tax, at least to them.

    A sales tax increase dedicated solely to transit might be another thing which should be looked at if it can generate a substantial amount of revenue. That may not be the case, however.

    I’m personally not a big fan of the PMT. It doesn’t generate all the much income. Increasing it enough so it can would be a burden on many businesses. And some people pay the tax who really shouldn’t. Small businesses are exempted, as they should be, but self-employed single proprietors aren’t. That makes no sense. Because it doesn’t there’s less political support for the tax.

  • Kevin Love

    Because a huge amount of users are commuting in and not paying property taxes to NYC.

  • ahwr

    I’m personally not a big fan of the PMT. It doesn’t generate all the much income.

    Doesn’t it bring in 1.2 billion, 1.5 billion with state replacement funds for the 2011 cut?

  • Joe R.

    That’s a drop in the bucket compared to the MTA’s immediate needs. Note that I’m never a fan of suddenly increasing budgets well beyond inflation, but in this case it’s sorely needed both for system maintenance, and more importantly, system expansion. NYC could use another 50 to 100 route miles of subways. That might make your idea of greatly densifying places like eastern Queens feasible. It would also make getting around the city much faster, with all the economic benefits this implies. I personally feel in the short term (i.e. the next decade or two), the MTA could use an additional $10 billion annually in funding. Once the system is expanded and bought into a state of good repair the budget can be drastically reduced to reflect ongoing operating/maintenance costs.

  • It’s not like we get any out of town income taxes either. They’re using NYC property, going to NYC shops, working in NYC businesses. The costs get passed on to the users of the transit system.

  • Jesse

    I’m not sure what your point is. If you work in NYC then you pay NYC income tax even if you live outside the city.

  • Oh, derp. You’re right.

  • ahwr

    So you want a tax cut for you and service expansion for you at the same time, paid for by some mythical other. Good luck with that.

  • Joe R.

    Actually, given that NYC sends way more in taxes to Washington than it gets back, I could make a great case for the Feds giving us the $10 billion per year. No tax increases necessary. Moreover, I’ll complain a bit less about paying federal taxes knowing the money I send there is being spent to improve my city.

    The service expansion really won’t benefit me all that much. Sure, it’ll make it more convenient the handful of times I go to Manhattan. I may even go a bit more often if it took only 25 minutes. The expansion will however enormously benefit many of my neighbors. Not only could system expansion get them to Manhattan much faster, but done right it’ll make getting to jobs within the same borough much easier, perhaps discourage a lot of driving in the process. If in the long haul my real estate taxes went up because the area is now much more attractive, at least I’ll see that it was fair in the sense I now have much better options to get around (and traffic is reduced when I ride my bike).

    The key here isn’t that taxes must always be kept low. Bloomberg was an expert on this subject. He felt higher taxes were fine if the people paying them felt they were getting something worthwhile for their money. I feel the same way.

  • Joe R.

    Actually, only NYC residents are liable for NYC income tax. There used to be a commuter tax which those who lived elsewhere but worked in NYC paid, but that was killed in 1999.

    A NYC employer pays the PMT on any employees, including those who live elsewhere, but the employees themselves don’t directly pay any type of income taxes to NYC.

  • Mark Walker

    Cuomo is the MTA what Christie is the ARC tunnel. He is Mr. Short Term Thinking, a blundering fool whose arrogant inaction will cost the city and state dearly for decades to come.

  • ahwr

    How is the payroll tax not an income tax ?

  • Joe R.

    Traditionally, taxes the employer pays in addition to the employee’s salary are considered payroll taxes. Examples are the PMT, the employer’s half of Social Security, unemployment insurance, perhaps others. I know technically these taxes are still based on income, but an income tax is generally considered to be something which is deducted directly out of the employee’s pay.

    And yes, I’ll be the first to agree all this is splitting hairs. I’m just reiterating commonly used terminology. Technically for me any tax based on income is an income tax, whether the employee or employer is paying it.

  • Jesse

    my mistake.

  • vnm

    given that NYC sends way more in taxes to Washington than it gets back, I could make a great case for the Feds giving us the $10 billion per year.

    You could make the case, and indeed it would be a good case, but it wouldn’t get anywhere. New York gets two votes out of 100 in the Senate, and 27 votes out of 435 in the House. How many southern and midwestern Republicans are going to jump up and down and say “me first!” when you ask: “Who wants to give New York City $10 billion a year?”

  • kevd

    Yeah, but he didn’t say “NYC property tax”

  • kevd

    (oh, I see you redacted below!)

    Not at all true.

    NYS? Yes.
    But Not NYC.
    Pataki ended it as a bribe to suburban commuters.
    NJ and CT filed a lawsuit and won (as everyone knew they would!).

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