New York Transit Funding Fight Reaches Breaking Point

I rarely discuss the funding fight over New York’s Metropolitan Transportation Authority, which is facing a huge $1.2 billion deficit in the next fiscal year. That’s not because it’s not an interesting conversation to be having – it’s just that the issue is covered so well by Second Avenue Sagas I rarely have anything in addition to say. If you’re interested in transit in New York City, that’s your site.

That said, I wanted to point out the stop-gap measures being proposed by the New York State Senate Assembly to cover the huge hole, including a 4% fare increase and a 25¢ tax on every $100 of payroll in the metro area. This money does not go far enough in that it won’t do anything to cover the growing problems the MTA is having covering its capital costs. At least according to the plan’s proponents, however, it will at least cover operating costs and prevent the now-planned shutdown of lines across the city.

Unlike the Ravitch Plan, which was proposed at the end of last year, this proposal would not impose tolls on the East and Harlem River bridges, a necessary action if New York is ever going to address its traffic congestion effectively. It simply isn’t fair that car drivers can cross the Manhattan bridge for free whereas transit users must pay $2 – and rising – to do the same.

But the payroll tax idea falls along the lines of a stable funding source for which I’ve advocated in the past. Unlike sales taxes or real estate transfer taxes, upon which the MTA currently relies for the majority of its non-fare revenue, the payroll tax is unlikely to jump back and forth as rapidly as other forms of income during recessions or bull markets. Using the payroll tax would make it easier for the MTA to assess its expenses and plan its budgets years in advance. That’s important if we’re going to try and avoid the “doomsday” scenarios that seem to be arising every other year now.

So the new plan – while not great – is a step in the right direction.