MTA To Get More State Aid,
Legislators Plan to Supersede
Agency's Doomsday Budget
By Henry J. Stern
March 27, 2009
The artificial March 25 deadline set by the MTA came and went Wednesday. The state legislature has still not reached agreement on the transit agency’s demand for new state subsidies, and by what means the necessary funds will be raised. The agency’s response was to enact what it called a doomsday budget, with 25 to 30 per cent fare increases and substantial service reductions. This is intended to shift blame from the MTA to the legislature for the substantial increase in fares and the imposition of tolls on previously free bridges to and from Manhattan, and for service cuts.
The agency's gambit is in part justified and in part showmanship. They need money, so they create an immediate crisis in the hope that someone will solve it for them. They also need to reduce their overhead in a way that will minimize service reductions, while protecting their passengers from the brunt of the cost. This is what private companies that are not publicly subsidized do in hard times.
It is probable that sometime, but not until next week at the earliest, that a package will be agreed upon by Albany and the MTA.
DIGRESSION: There is no specific location that evokes the MTA in the way the Pentagon, the White House, Albany and City Hall serve as inanimate symbols of agencies or official bodies. We would nominate 2 Broadway, the site of their costliest folly, where hundreds of millions of dollars were poured into the renovation of a building they do not own. This provided luxury office space with dramatic harbor views for back-room operations by employees who could have been housed in Long Island City for a small fraction of what the MTA paid.
A numbered building, however, lacks the panache and prestige that such a huge agency deserves. It is also a symbol of corruption and dysfunctionality. Going the other way, Grand Central is much too noble a name, while Madison Avenue (where they now occupy an office building at No. 341, across the street from Brooks Brothers) is an address associated with advertising, just as Wall Street means finance.
Penn Station clearly evokes transit, but it is owned by Amtrak, a country-wide railroad operation. Amtrak could be thought of as similar to a GSE, or government-sponsored enterprise, which would put it up there with the losers, Fannie and Freddie, whose irresponsible lending practices were a major contribution to our present economic difficulties.
Another possibility is Fulton Street (Manhattan), the MTA’s latest billion dollar boondoggle, which will now receive federal stimulus funds for the second billion of a facelift for a long corridor, with minimal, if any, service improvement. This was built because the unions, potential contractors and idle MTA engineers all wanted it. Former MTA chair Peter Kalikow made it his personal mission.
When Nelson Rockefeller built Albany’s Empire State Plaza, he was derided for an “edifice complex,” but the buildings were at least useful. Nelson’s towers were the Albany anchor to his brother David’s One Chase Manhattan Plaza, built in the late 1950’s – an attractive modern building that was intended to create an architectural renaissance downtown. Although the Chase Plaza does not work all that well, the structure is a great addition to the landscape (or skyscape).
Fulton Street has gravitas because of Robert Fulton, inventor of the steamboat, a valuable mode of water transportation in the 19th century. Originally derided as Fulton’s Folly, the steamboat proved its worth. It also linked New York and Albany, both important cities for the MTA.
Currently, to reach Albany by rail you must use Amtrak; the MTA Hudson line only goes as far north as Poughkeepsie, for which Dutchess County residents pay an additional quarter of one per cent sales tax, like the downstate counties. END DIGRESSION
Those of us who oppose bridge tolls have the responsibility of suggesting alternative revenue sources for mass transit. One idea is to increase the gasoline tax, either for the MTA counties, or state-wide, with the upstate revenues going to local transit systems. The problem is that gasoline is already relatively heavily taxed in New York State. There is a state excise tax of 8 cents per gallon, a state sales tax of 4 per cent (capped at 8 cents), a petroleum business tax of
16.6 cpg, an oil spill fund is 0.196 cpg, a fuel quality testing fee of 0.5 cpg, county sales taxes (averaging 7.9 cpg). The federal gas tax amounts to 18.63 cpg, including the underground storage tax and a superfund tax. New York State tax rates are the reason that gas costs about 25 cents less in New Jersey.
Another suggestion is to increase auto registration fees more sharply for heavier motor vehicles. An SUV would then pay substantially more than a Prius. This was the case many years ago, when the weight of the car was required to be listed on the registration document, and the fee was directly proportional to the weight. Now we have relatively minor increases until the vehicle’s weight exceeds 7000 pounds, at which time the tax jumps to $112 per two years. SUVs (sport utility vehicles) weigh between 4400 (Ford Explorer) and 5500 pounds (Chevy Tahoe), so neither is affected by the substantially higher tax rate above 7k. However, Governor Paterson’s proposed budget already provides a 25 per cent increase in licensing and registration fees.
The burdens imposed by increased taxation lead to consideration of cost reduction by the MTA as their contribution to balancing the budget.
Cost reduction can be accomplished either by discontinuing services, freezing or lowering personnel costs, or by requiring employees to perform more work. Any of these proposals will be opposed by public employee unions, who are the largest contributors to legislators’ campaigns, and whose lobbying expenses are the highest in Albany.
The affinity between politicians and labor unions has developed over the years. It is relatively non-partisan, and when the Republicans controlled the State Senate the unions contributed to their campaigns. The Working Families Party, small but militant, is ardently pro-labor and can take part in Democratic primary contests, thus instilling fear in timid legislators who are accustomed to following the directions of their leaders. In the 2008 Democratic primary on the Lower East Side, the WFP endorsed Speaker Sheldon Silver for re-nomination, a reasonable decision in view of the likelihood of his victory (He won handily.), and his support for their issues.
One question as yet unanswered will be whether Governor Paterson will ask Senate Republicans for help in imposing bridge tolls, bypassing his own party members.
A related issue is whether the Senate Republicans will allow themselves to be used for this purpose, and, if they do, what price they will exact from Paterson and Speaker Silver. Since all negotiations are conducted in secret (as I suppose is necessary when people get serious), we have no idea at this time what the outcome will be.
It would be foolish for the Republicans to allow themselves to be bought, but the Congressional GOP went along with President Bush’s ever-increasing budgets as long as they were larded with earmarks for their districts. Why should New York State Republicans be more principled than their Washington counterparts? Maybe because they really want to win in 2010 in a wave of revulsion against high taxes (which will be adopted). They would not look idealistic if they collaborated to tax bridges that have been free for a century. But never underestimate the hunger of a tribe, now reduced to 30 souls and deprived of the majority they enjoyed and exploited while Senate Democrats spent 43 years in the wilderness, longer than it took to cross Sinai.
It is also possible that the governor will lean on his colleague, Malcolm Smith, with sufficient force to persuade Smith to recant his heresy in opposing bridge tolls. Smith’s hold on the majority leadership is not the strongest. It relies on the likelihood that since every other Senator wants to be the leader himself or herself, none of them can find sufficient support for a coup.
This afternoon Speaker Silver and leader Smith announced that the legislature would aim to resolve the transit budget issue by Wednesday, April 1. Transit would be considered at the same time but not as part of the adoption of the State budget, which by law must be approved by
12.01 a.m. on April 1. Last year, the legislature was a day late and billions of dollars short.
Silver said each body would consider various issues in their party conferences. The powerful Silver, who has been Speaker since February 1994, enjoys a 109-41 majority in the Assembly, while Smith has the bare minimum of 32-30. A quorum of the Senate, a necessity if taxes are to be increased, is said to be 38 members, which provides the Republicans with a way to block action if they chose to use it. That course might not, however, be politically desirable. The Federal governmental showdown of 1995 was widely blamed on Republican speaker Newt Gingrich, and led to the loss of Congressional seats by the GOP.
We will see whether or not the issue can be resolved by Budget Day. And watch out for other legislation which is likely to be sneaked in during the closing rush. Of particular concern is a bill sponsored by trial lawyers which would double their fees in major cases.
Enjoy the weekend.
StarQuest
#547 03.27.2009 1565 wds |