The GOP Tax Plan Will Hit NYC Transit Riders Hard

If the legislation passes, it's going to put the squeeze on transit funding from the feds, the state, and the city.

Photo: ianqui/Flickr
Photo: ianqui/Flickr

The tax bill Republicans in Washington hope to pass before they head home for Christmas break will have a “devastating” effect on NYC’s transit system, according to an analysis by the Riders Alliance and the Tri-State Transportation Campaign [PDF].

The MTA’s $32.5 billion, five-year capital plan, which funds both maintenance and expansion, depends on $7.5 billion in federal funding. By cutting tax revenue $1.5 trillion over 10 years and blowing up the deficit, the GOP bill will create downward pressure on the federal programs that supply those funds, advocates warn.

The results could include declining service quality from deferred upgrades and maintenance, as well as service cuts and fare hikes as the MTA scrambles to close unforeseen holes in its capital budget.

“As if transit riders needed more bad news, it seems that Congressional Republicans are conspiring to make our commutes even worse,” said Riders Alliance Executive Director John Raskin.

Specific capital projects currently in line for federal funding include the next phase of the Second Avenue Subway, power upgrades on the L train, and Woodhaven Boulevard Select Bus Service. Since transit funding is distributed unevenly state-by-state, with New York receiving a large share to help with its large system, Riders and TSTC worry it will be particularly vulnerable to funding cuts in the current political climate.

The tax bill won’t just affect specific MTA line items. By eliminating the federal exemption for state and local tax payments exceeding $10,000, the GOP bill will create pressure on states and cities to cut taxes and spending. As a result, the fiscal climate in New York will be more constrained and austere, which will invariably put the squeeze on transit funding.

The bill would also limit the MTA’s ability to refinance bonds at lower rates, increasing the costs of borrowing to pay for transit infrastructure.

The MTA shares these concerns. Agency chairman Joe Lhota told AMNY that the bill would be “devastating for New York State and particularly jarring for the MTA.”

“It will result in a reduction of federal funding for mass transit, will significantly impede the MTA’s access to the capital markets and will increase the tax burden for all of our customers,” Lhota said. “This legislation is not tax reform, it is tax deform and is a direct assault on all New Yorkers.”

  • HamTech87

    More reason to get the IDC in line with NYS Senate Democrats before the next congressional districts are laid out. All the Republicans in the MTA region — Peter King and Lee Zeldin on Long Island, Donovan on Staten Island — need to be voted out asap.

  • Larry Littlefield

    “Agency chairman Joe Lhota told AMNY that the bill would be “devastating for New York State and particularly jarring for the MTA.”

    However, de-funding the MTA capital plan for 25 years, diverting dedicated revenues, and retroactively increasing pensions was no problem at all!

    Sorry, NY pols are not off the hook for the “devastation.” And as I said, the third round of Republican federal debts are likely to gut Social Security and Medicare, as infrastructure funding had already pretty much disappeared.

  • com63

    This article isn’t very persuasive. I’m very much against the tax bill, but I think it will not have an immediate impact on the MTA as written. The things described here are more abstract. Instead of saying there will be downward pressure on transit funding, you could just as easily say the tax bill will lead to a huge democratic wave in 2018 and 2020 which will bring infrastructure funding to the highest levels in recent memory…

  • JT

    ‘By cutting tax revenue $1.5 trillion over 10 years and blowing up the deficit, the GOP bill will create downward pressure on the federal programs” conservative advocates hope’

    FTFY

    This is really a strategy to destroy government service – cut taxes, blow up the deficit, then have to cut services more to “deal” with the deficit. Rinse and repeat.

  • Anxiously Awaiting Bikeshare

    At least it gets rid of the parking subsidy.

  • Larry Littlefield

    It wasn’t quite the repeat of 1986 that was promised. They kept the mortgage interest deduction up to $750,000, for multiple houses.

    I don’t mind the multiple houses part, since one aspect of an urban vs. suburban life is that some people have small apartments and second homes in rural locations.

    But why keep the mortgage interest deduction at all? I might have been slightly less hostile had they gotten rid of it entirely.

    They really just set out to hurt a few states.

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