|FROM ||Ruben Safir
|SUBJECT ||Subject: [NYLXS - HANGOUT] MTA Blackmail - you should read
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Date: Thu, 27 Nov 2008 22:27:33 -0500
From: Ruben Safir
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Subject: [NYLXS - HANGOUT] MTA Blackmail - you should read
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November 27, 2008
Taxes and Tolls Sought in Plan to Save M.T.A.
By WILLIAM NEUMAN
A state commission appointed by Gov. David A. Paterson
is expected next week to propose a rescue package for the financially
imperiled Metropolitan Transportation Authority
that includes a new tax on corporate payrolls and tolls on the East
River and Harlem River bridges, several people informed of the plan said
The commission, led by Richard Ravitch
a former chairman of the authority, will also recommend an increase next
year in fares on subways, buses and commuter railroads, as well as in
tolls on the bridges and tunnels it currently controls. But those
increases would be much smaller than the ones the authority recently
outlined in its proposed budget for next year.
The commission is also expected to call for minimal cuts, if any, in
transit service. The plan, which is due to be released by Dec. 5, will
contain recommendations to the governor, subject to passage by the
The authority is facing a $1.2 billion shortfall next year and even
larger deficits in the future because of the economic downturn and an
ever-growing debt load. The authority relies heavily on revenue from
taxes on real estate transactions, which have plummeted as the real
estate boom has fizzled.
In a budget proposal that the authority’s board will vote on next month,
the authority has called for raising revenues from fares and tolls by 23
percent next year — which could mean a base subway and bus fare of $2.50
or higher, up from $2. It also lays out a wide range of service
reductions that include deep cuts in the frequency of bus and subway
service, the elimination of the W and Z subway lines and the elimination
of 2,800 jobs, many through layoffs.
The authority is hoping the commission’s recommendations will allow the
state to find more revenue and allow the authority to avoid carrying out
its austerity plan. If the Legislature approves the recommendations, the
authority could end up with a budget that contains less severe cuts in
service and smaller increases in fares.
The people familiar with the rescue plan cautioned that it is still
being refined and may change as Mr. Ravitch tries to win the support of
elected officials like Mr. Paterson and state legislative leaders. Mr.
Ravitch is expected to meet with the governor in the coming days to
present a final version of the plan.
Opposition to some of the plan’s central elements is sure to be strong.
Despite the growing problems at the authority, most elected officials
have remained publicly uncommitted about how to help it, saying only
that they were awaiting the commission’s report.
So far the strongest show of support has come from Assembly Speaker
a Manhattan Democrat, who said last week that he was open to raising
taxes or creating a new tax to support the authority.
It was not clear, however, whether Mr. Silver or other legislators would
support instituting tolls for the bridges. Bridge tolls are seen by many
as similar to Mayor Michael R. Bloomberg
plan to charge drivers for entering Manhattan on its busiest streets;
that plan died in the Legislature this year, largely because of
opposition from Assembly Democrats.
The idea of collecting tolls on the bridges over the East and Harlem
Rivers has enticed and tormented mayors for decades. It has repeatedly
been proposed and then shot down, with especially strong opposition
coming from elected officials in Brooklyn and Queens and on Long Island,
whose constituents account for much of the traffic on the free bridges.
Details of Mr. Ravitch’s proposals were sketched out this week by
several people involved in discussions of the plan, including two
members of the state commission. All spoke on condition of anonymity
because they were not authorized to speak for the commission. Mr.
Ravitch refused to discuss the proposals.
The tax on payrolls, expected to be less than one half of 1 percent,
would apply to businesses in the 12-county area served by the authority.
It would be paid by businesses, not employees. The tax would be designed
to raise $1 billion a year or more.
It would be coupled with the new bridge tolls, which would generate
about $600 million a year, after the cost of maintaining the bridges and
collecting the tolls is accounted for. Drivers would pay a higher rate
on the East River bridges than on the Harlem River bridges under the plan.
There would be no toll plazas: Most tolls would be collected through a
system of E-ZPass readers. Drivers without E-ZPass would be identified
and could be billed using digital cameras that snap a picture of each
vehicle’s license plate.
Control of those bridges, which are owned by the city, would be
transferred to the authority under the plan, although it was not clear
how that would be achieved.
The third main element of the proposal is a more modest increase for
next year in fares and existing tolls on the bridges and tunnels already
controlled by the authority.
That increase would allow Mr. Ravitch and his supporters to argue that
the cost of running the system was being shared by all those who benefit
The commission has also discussed including sweeteners that would reduce
costs to the city and other local governments.
Under one such proposal, the city would stop making payments to the
authority to subsidize the operations of a group of private bus lines
that the authority took over at the city’s request. The projected city
subsidy next year is $280 million.
And if the authority takes over the city’s bridges it would also assume
maintenance costs, which for the East River bridges alone total about
$10 million a year.
The four East River Bridges are the Brooklyn, Manhattan, Williamsburg
and 59th Street Bridges. The city-controlled Harlem River bridges
include the Willis Avenue, Macombs Dam, Third Avenue, Madison Avenue,
145th Street, University Heights, Washington, Broadway and Wards Island
Mr. Ravitch has a monumental task in seeking to build a consensus for
his plan at a time when the economy is sinking and the city and, in
particular, the state both face huge budget problems.
There will be many demands on the state budget next year, and officials
at the authority said they hoped that elected officials were willing to
address their needs first. They have said that if the state does not
enact a new revenue source by March, they will have to proceed with the
Mr. Ravitch is widely credited with helping the authority recover in the
early 1980s when the system was plagued by widespread mechanical
failures. At that time, he showed a deft hand and sharp political acumen
as he fashioned bipartisan support for the authority’s first capital
plan, which began the rebuilding of the transit system. He benefited
from longstanding relationships with Gov. Hugh L. Carey
and top legislators, but those players have long since left the stage in
Mr. Ravitch now must win the support of a governor attempting to pass
his first budget in a time of crisis. His task is further complicated by
the confusion in the State Senate. This month, Democrats won a majority
there for the first time in decades, but are facing a fight over who
will become the new majority leader, one of the three most powerful
positions in Albany.
The full-fledged support of the governor will be needed to bring
Albany’s many competing factions — business and labor, upstate and
downstate, city and suburban — in line behind the plan. One important
ally may be the governor’s new senior adviser, Marc V. Shaw
a former executive director of the authority who led a state panel
looking into congestion pricing; he has been an outspoken proponent of
charging tolls on the East River bridges.
Risa B. Heller, a spokeswoman for Mr. Paterson, said in a statement,
“The commission is still deliberating, but we look forward to receiving
their final report and working with all stakeholders to ensure the
fiscal integrity of the M.T.A.”