Reinvent Albany Preliminary Analysis of MTA Funding in One-House Budgets

March 15, 2023
Senate and Assembly fill MTA’s deficit, but differ on funding and policy proposals
 

MTA Operating Budget Gaps Filled, But Without Service Expansions
We thank the Senate and Assembly for funding the MTA at the level proposed by the Governor to keep the MTA solvent. Both houses rejected the next scheduled fare hike, and the Assembly said it was supplying $197 million in additional funds to cover that lost revenue.

The Legislature did not provide funding to expand service, as requested by transit advocates and as identified by some legislators as important to attract more riders, since congestion pricing is moving forward. Both houses added new pilot programs for free bus service. 

Both houses rejected the Governor’s proposed increase to the Payroll Mobility Tax (PMT). The PMT is a stable dedicated fund remitted directly to the MTA, meaning it is protected from raids during the annual budget process. It also varies less year-to-year than some other taxes.

Both houses also rejected funding the Governor’s proposal to require the City of New York to make $500 million in contributions to the MTA through PMT exemption payments, funding of student Metrocards, and Paratransit payments. Reinvent Albany supported the State increasing its own PMT “make whole” payments to adjust for inflation, and urged it to work with the City to strengthen the Fair Fares program. See our report Skipping Out: NYS Not Making $375 Million a Year in Payments Promised to MTA for more information.

  • The Senate and Assembly both would fund the MTA in part through increased corporate taxes, which are more volatile taxes on businesses’ profits. Both propose to have taxes sent directly to the MTA without appropriation, which will protect the revenue from being diverted.
  • The Senate also added a new surcharge for rides on transportation network companies (TNC) like Uber or Lyft to be paid directly to the MTA and other NYS transit systems, without appropriation. (Part FFFF S4008-B)
  • A residential parking permit program in NYC is also proposed by the Senate, which would provide additional revenues for the MTA. (Part DDDD of S4008-B)
  • Troublingly, the Senate added new exemptions to the PMT, as well as the driver’s license fees (MTA Aid) for only Dutchess, Orange, Putnam, and Rockland counties. The Senate provides no guarantees of replacement funds, as was required for past exemptions to the PMT. (Part EEEE of S4008-B)
  • The Assembly proposal funds the MTA in part through the state General Fund, through both the State Transit Operating Assistance Fund (STOA) and requiring state payments for PMT exemptions, student Metrocards and Paratransit – which were funded by NYC in the Governor’s proposal. When MTA funding is not dedicated and remitted directly or part of established programs like 18-b, it is more vulnerable to raids or cuts during the annual budget process. 
  • The Senate sharply reduced what the MTA would get from casinos: they agreed with the Governor to send revenue from casino licenses to the MTA, but unlike the Governor, proposed dedicating ongoing tax revenue from casinos to education. The Assembly accepted the Governor’s proposal.

Article VII Transportation Proposals
We thank the Senate for including the following measures we support (see our budget testimony for more details):

  • New MTA Capital Project Transparency: The Senate includes new transparency requirements for MTA capital projects, including data on contracts, source of funding, as well as coding projects by accessibility and resiliency (Part AAAA of S4008-B, as proposed by Senator Ramos and Assemblymember Carroll in S3545/A4043.) Reinvent Albany supports this legislation.
    • The Assembly did not include this proposal in their one-house budget.
  • Automated Bus Enforcement: The Senate “in principle” supported the Governor’s proposal to expand the MTA’s automated bus enforcement program, which would increase bus speeds. Reinvent Albany supports the Governor’s proposal to strengthen automated bus enforcement, as well as stand-alone legislation (S153/A2610) sponsored by Senator Krueger and Assemblymember Hyndman to expand the program. (Part A of A3008-B/-S4008-B)
    • The Assembly rejected this proposal.
  • Allow NYC to Lower Its Speed Limit: The Senate accepted the Governor’s proposal authorizing New York City to lower its speed limit from 25 mph to 20 mph. (Part K of A3008-B/S4008-B – see also our Memo of Support for S2422, Senator Hoylman-Sigal, “Sammy’s Law.”)
    • The Assembly rejected this proposal. 
  • NYC Parking Reform: The Senate modifies the Executive’s proposal to increase penalties on commercial vehicles that park overnight in residential areas in New York City by incorporating higher fines (S.518) and addressing the issue of overnight school bus parking in residential neighborhoods (S.1186). (Part N of A3008-B/S4008-B)
    • The Assembly did not include this proposal in their one-house budget.

We appreciate the Senate removing the value capture proposal which we opposed. Reinvent Albany requested that the Legislature hold a hearing before extending this program, and opposes the use of PILOTs to fund state projects. 

  • Value Capture: The Senate rejects the Governor’s proposal to allow MTA to use value capture, including by siphoning off local property taxes via PILOT agreements. The Assembly modified the proposal to require the program to sunset in 10 years. (Part C of A3008-B/S4008-B)

We are disappointed that both houses failed to include traffic enforcement proposals that we supported from the Governor’s Executive Budget:

  • Bridges & Tunnels Speed Enforcement: The Senate and Assembly both rejected the Governor’s proposal to authorize speed cameras for MTA bridges and tunnels. We support measures to improve enforcement of local traffic laws, particularly as the MTA will soon implement congestion pricing. (Part B of A3008-B/-S4008-B) 
  • Toll Violation Enforcement: The Assembly rejected, and the Senate modified, the Governor’s proposal for toll violation enforcement.
    • The Senate  included the Toll Payer Protection Act in its counter proposal, which we oppose. The Act would decrease operating revenues for the MTA and Thruway Authority, while moving in the wrong direction on enforcement as congestion pricing – which we strongly support – is being implemented. (Part F of A3008-B/-S4008-B).

Penn Station

  • Both houses reappropriate $1.2 billion in Capital Funds for Penn Station (A3004-B/S4004-B). This is limited in use for either Penn Expansion, or transportation improvements – not above-grade development.
  • The Senate added new language to repeal the Madison Square Garden (MSG) tax exemption and send all future revenues generated from property taxes to the MTA. (Part ZZZ of S4008-B). Reinvent Albany supports separate legislation to end MSG’s tax abatement, S1632 (Kavanagh) / A846 (Weprin).