This article is the fourth in a series examining mechanisms to fund the MTA’s Capital Plan for 2015-2019. The agency that serviced over 1.75 billion subway riders last year — 5.6 million riders on an average weekday and 6 million on weekends — has proposed a $32 billion budget to fund standard maintenance and repair, service expansion and improvements, and continued construction of the 2nd Avenue line, among many other projects that will ease overcrowding, delays, and breakdowns of our trains, subways, and buses. Unfortunately, a $14 billion funding gap ($1B was funded in the State budget approved in March) threatens the continued viability of the MTA. The Move NY Fair Plan is the only viable proposal on the table which can provide much of the funding needed to fill the gap, but unless serious discussions are had in Albany in the last weeks of the legislative session, the future of the MTA — and our lifeline to work, entertainment, shopping, and family & friends — is very much up in the air. And as the MTA goes, so goes the entire New York State economy.
We will look at fill-the-gap alternatives to the Move NY plan, none of which individually or collectively can bring faster, safer, fairer transportation to New Yorkers and many of which are dead on arrival: Filling the Gap with More Debt; Filling the Gap with a New Gas Tax; Filling the Gap with an Increased Sales Tax; Filling the Gap by Increasing the Payroll Mobility Tax; Filling the Gap by Reinstating the Commuter Tax; Kick the Can Down the Road: Doing Nothing.
IV. Filling the Gap by Increasing the Pay Roll Mobility Tax
At the “official” tail end of the Great Recession, the MTA was in the throes of preparing its 2010-2014 Capital Plan budget. New York’s economy was in the proverbial trashcan and so, too, would’ve been the Capital Plan had it not been for a new revenue stream created to help fill the $9.9 billion gap (a gap that was also closed with tremendous service cuts). Called the “Payroll Mobility Tax (PMT),” the State Legislature proposed that 34 cents of every $100 of payroll paid by public and private employers within the 12-county MTA region would go toward keeping the City and region moving, and generate ~$1.5 billion annually.
The PMT was signed into law in 2009, and has been a hot political potato ever since.
Almost immediately, suburban legislators on both sides of the aisle and at all levels of government fought to have the tax revoked. Nassau County Executive Edward Mangano and others filed a lawsuit declaring the tax unconstitutional. The court ruled against Mangano et al, but on August 22, 2012, they won on appeal. Nearly two years later, the NYS Court of Appeals overturned the decision by State Supreme Court Judge R. Bruce Cozzens, Jr, and the MTA breathed a sigh of financial relief.
There was also a bill introduced in the State Senate to repeal the PMT. As Streetsblog reported in June 2011:
“In addition to every member of the Republican majority, the bill garnered the votes of eight Democrats. Every Democratic state senator from outside New York City voted to repeal the payroll tax. Shockingly, so did Queens Senator Malcolm Smith, who while majority leader in 2009 was responsible for shepherding through the Senate the MTA funding package that had the payroll tax as its centerpiece. Every Senate Democrat voted for that bill at the time, meaning the six non-freshmen Democratic nays from last night flipped their votes (here’s the roll call), whether because of a different political climate or the knowledge that this was merely a symbolic vote.”
Even the Governor has tinkered with the original bill authorizing the Payroll Mobility Tax. In 2012, small businesses ($1.25 – $1.75 million in annual payroll) saw a reduction in the amount they paid into the system, and private and parochial schools were exempted from the tax as public schools had been in the original bill.
With such opposition to the tax, it seems highly unlikely that anyone would advocate, much less, pass new legislation to increase the Payroll Mobility Tax — which, if used to fill the MTA’s (2015-2019) $14 billion gap, would need to be more than doubled.
We Need a Real Solution
As we reach the end of this legislative session, Move NY remains the only viable plan on the table that can help fill the MTA gap, reduce traffic congestion, and bring relief to city residents living in transit-starved neighborhoods. If left underfunded, the MTA will be forced to cut back on upgrades to the system (e.g., countdown clocks and modern signaling systems) as well as investments to increase service (e.g., SBS and BRT) and expand the system (e.g., Second Avenue subway expansion). As ridership continues to grow, we will be faced with ever more overcrowded trains, unreliable service, and innumerable breakdowns, making it difficult to attend meetings and get to work on time with any predictability.
On a recent evening on the Lower East Side, a theatre performance was delayed by nearly 30 minutes because two cast members were stuck in a Westside train that had broken down. This is just one of the many horror stories New Yorkers face everyday while trying to get to and fro in the most efficient way possible. And it’s just as maddening for drivers. Clogged roads increase travel time on buses and make it all but impossible to make deliveries and service calls with any reliability.
If these problems aren’t addressed — and soon — employers and employees will pay the price throughout the region, not with an increased Payroll Mobility Tax but with loss of productivity. Under the Move NY Fair Plan:
“Annually, drivers will save $2.2 billion in time that would have been spent idling in traffic. Time savings benefit transit riders as well, to the tune of $1.1 billion for subway riders and nearly $100 million per year for bus riders. These reductions in travel times have tremendous economic value: $3.60 per work trip.”
But to move New York into the 21st Century, we need the political will power to fund our transit system, or else there is a very real (and scary) possibility that we will slip back to the 1970s when an underfunded system meant dark subway cars, graffiti inside and outside the trains, miles and miles of dangerous tracks, and extensive service cuts.
Let your elected officials know you support a fully-funded MTA with Move NY as a key funding mechanism. Sign the petition today! We can’t afford to go back to the future.