The MTA is threatening massive, unprecedented service and job cuts to its transit system in an attempt to demonstrate to Congress, particularly the U.S. Senate, what failure to provide $12 billion in federal funds means not just for the people who depend on public transportation in New York but for hundreds of companies nationwide that benefit from MTA spending. But while the agency takes its own riders hostage in an attempt to shame a complacent Congress, the Cuomo administration also seems ready to do nothing while the mass transit system it oversees is hacked to pieces.
Without the $12 billion, MTA leaders say they would be forced to lay off almost 10,000 workers and cut bus and subway service by 40 percent starting in May. But waiting for Washington is a parlor game — Gov. Cuomo could act.
"I don't know how we can continue to wait for federal funding," said State Senator Jessica Ramos, who is not only a supporter of transit, but an every day user of it. "I doubt it's going to get here in time and I don't think it's going to be enough."
Our federal leaders aren't exactly displaying any confidence that they'll act. On Friday, it became clear that they can't even agree on an agenda for their next meeting. New York señor Senator Chuck Schumer told reporters that his staff was meeting with Senate Majority Leader Mitch McConnell's staff in the next day or so to negotiate a relief package agreement — only to have Republicans say that such a meeting would simply about a looming government shutdown that will happen after Dec. 11, as Jake Sherman reported.
So state leaders are now looking increasingly longingly at Cuomo.
Ramos and her Albany colleagues have spent the pandemic proposing multiple new taxes to help deal with New York State's yawning four-year deficit, which has hit $63 billion by now. In addition to Ramos's proposed mark-to-market tax, which would tax an increase in stocks and bonds held by billionaires in New York, Democrats have proposed a pied-a-terre tax, a stock transfer tax, a sales tax on luxury items like private jets or yachts or a surcharge on non-essential online deliveries.
Albany could even use borrowed money to help the MTA, without burdening the agency itself with debt. Former Assembly Member Jim Brennan argued this week that Gov. Cuomo could take $3.5 billion out of the $4.5 billion that it's borrowed during the pandemic and have the legislature appropriate it to the MTA, in an attempt to build a small bridge deeper into 2021 and a government headed up by a Biden administration.
No single tax alone would be a quick fix for the MTA, with every service in New York needing some kind of help. Ramos said that the theoretical money is not yet spoken for though, which would mean that billions from the mark-to-market or package tax or hundreds of millions from the pied-a-terre tax is there waiting to be lobbied for.
But Wednesday's MTA Board meeting, which was centered on the potential service cuts and the need for federal aid to fill in missing revenues, barely had a mention of any fallback plans. There was an interminable 20-plus minute discussion on the particulars of a reduced fare pilot for some Long Island Rail Road and Metro-North commuters and the public notice that was going out about hearings on scheduled fare hikes.
MTA Chairman and CEO Pat Foye told reporters that the agency was ultimately "agnostic" about sources of new revenues, but he also took the time to downplay the proposed stock transfer tax as an option.
"The governor of Texas was quoted as saying he was going to take advantage of the proposed tax transfer and see if he could entice NASDAQ and the New York Stock Exchange and other firms from New Jersey, where a lot of them have located," Foye said about the potential for a stock transfer tax, before saying that he didn't want to express a view on the tax.
Experts have suggested that it's not a slam dunk NYSE would leave New York, even if a stock transfer tax was passed. But if Foye is unwilling to push Cuomo on a funding plan for mass transit, advocates pointed out that it's not as if the governor is totally unaware of what's happening at 2 Broadway every month.
"The governor has his budget director [Robert Mujica] and his director of financial services [Linda Lacewell] sitting on the board," said Riders Alliance Communications Director Danny Pearlstein. "They are in very close touch with the governor, so he's as close as he can possibly be without sitting in on the meetings themselves."
"The state doesn’t have the resources as we have our own nearly $63 billion, four-year revenue loss to contend with and we need federal aid to offset that loss or we will have to make spending reductions even if – in the absence of federal aid -- we also use borrowing and revenue increases to close it," said Cuomo spokesperson Freeman Klopott. "Anywhere the state doesn’t reduce spending will mean deeper reductions in another and the state supports schools, hospitals, transit, police and fire departments, and services for the most vulnerable."
And in fact, further MTA cuts appear to be the only thing that New York State is preparing to deliver to the beleaguered transit agency. In the November financial plan, the MTA writes:
While the State has yet to officially reduce its 2020-2021 appropriations to the MTA and other localities, due to the severe financial impact of the economic downturn from the COVID-19 pandemic, it has implemented reductions to disbursements of appropriations which were reflected in the MTA July Plan and are now in the November Plan as well. It is expected that an equal reduction will also be implemented for the State 2021-2022 fiscal year; and this reduction is reflected in the November Financial Plan.
That passage comes while the agency discussed the status of the Metropolitan Mass Transportation Operating Assistance fund, the dedicated revenue stream made up of taxes collected in the MTA service area. The agency warned that the amount from the fund would be smaller than expected, which makes sense in the context of an economic slowdown across the city and state. But as advocates warned earlier this year, the above passage is a lot of words to communicate a transit fund raid.
"The MTA said even with MMTOA funds getting reduced because of the economic downturn, they are also having funds withheld from them as part of state budget adjustments, which will eventually become formal cuts -- essentially raiding the MTA's dedicated taxes to make up for state budget shortfalls," said Reinvent Albany Senior Researcher Rachael Fauss. "Even worse, this is expected to occur next year as well."