The Daily Q: How does the state legislature detour mass transit funds?

Posted January 31, 2012 By Sasha Chavkin

Most New York City subway and bus riders say their commutes are getting worse, according to a survey released yesterday by the advocacy group Transportation Alternatives. Three out of five of straphangers surveyed said the quality of their commutes had worsened since 2009, the year before the MTA approved a package of harsh service cuts and fare hikes. Transportation Alternatives contends riders can blame their pain on the state legislature, which has diverted more than $260 million in dedicated transit funding for other purposes over the last three budgets.

The New York World would like to know: How does the state legislature divert mass transit funds, and is there a danger of it happening again?

If you have information or insights to share, please comment below, write us, or tweet to @thenyworld.

What we found

First, let’s take a step back. The MTA gets its operating revenue from a variety of sources, and fares account for only 38 percent of the total. An equal proportion comes from dedicated sources such as the mortgage reporting tax, the petroleum business tax and the payroll mobility tax, which are intended to go straight to the MTA’s coffers. The Tri-state Transportation Campaign has produced a good visualization of how the MTA’s budget breaks down.

However, the state legislature can divert these tax revenues in two ways, said John Kaehny, executive director of the reform group Reinventing Albany (and formerly of Transportation Alternatives). One way is through the budget process, by diverting the revenue from these taxes from the MTA account into the state’s general fund. Kaehny said that some $200 million had been diverted this way in the 2012 budget. The other is with across-the-board cuts in MTA spending – last imposed by Gov. David Paterson – which Kaehny said the same effect of allowing the state to hold onto revenues designated for the MTA.

Gov. Cuomo’s proposed budget for FY 2013 does not impose a shortfall on the MTA. But he has eliminated the politically unpopular payroll mobility tax, and his budget proposal calls for replacing the missing funding through the state’s general fund – a source that is even more prone to diversion by the legislature than dedicated taxes.

Nonetheless, the MTA says its current funding is solid. “When the payroll mobility tax was cut in December, the Governor committed to holding the MTA harmless,” wrote MTA spokesman Kevin Ortiz in an email. “He followed through on this commitment by increasing direct aid to the MTA in the 2013 Executive Budget. The Multi-Year Financial Plan contained in the Executive Budget also indicates that MTA will continue to be made whole for the next three fiscal years.”

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<h1>The Daily Q: How does the state legislature detour mass transit funds?</h1><p><a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg');"  href="http://www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg"><img class="alignleft size-full wp-image-2600" title="dailyQ2-01" src="http://www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg" alt="" width="105" height="105" /></a></p>
<p>Most New York City subway and bus riders say their commutes are getting worse, according to a <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.transalt.org/newsroom/releases/5687');"  href="http://www.transalt.org/newsroom/releases/5687">survey</a> released yesterday by the advocacy group <a onclick="javascript:pageTracker._trackPageview('/outgoing/transalt.org/');"  href="http://transalt.org/">Transportation Alternatives</a>. Three out of five of straphangers surveyed said the quality of their commutes had worsened since 2009, the year before the MTA approved a package of harsh service cuts and fare hikes. Transportation Alternatives contends riders can blame their pain on the state legislature, which has diverted more than $260 million in dedicated transit funding for other purposes over the last three budgets.</p>
<p>The New York World would like to know: How does the state legislature divert mass transit funds, and is there a danger of it happening again?</p>
<p>If you have information or insights to share, please comment below, <a onclick="javascript:pageTracker._trackPageview('/mailto/nyworld@thenewyorkworld.com');"  href="mailto:nyworld@thenewyorkworld.com" target="_blank">write us</a>, or tweet to @thenyworld.</p>
<h3>What we found</h3>
<p>First, let’s take a step back. The MTA gets its operating revenue from a variety of sources, and fares account for only 38 percent of the total. An equal proportion comes from dedicated sources such as the mortgage reporting tax, the petroleum business tax and the payroll mobility tax, which are intended to go straight to the MTA’s coffers. The Tri-state Transportation Campaign has produced a <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.tstc.org/101/mta.php');"  href="http://www.tstc.org/101/mta.php">good visualization</a> of how the MTA’s budget breaks down.</p>
<p>However, the state legislature can divert these tax revenues in two ways, said John Kaehny, executive director of the reform group Reinventing Albany (and formerly of Transportation Alternatives). One way is through the budget process, by diverting the revenue from these taxes from the MTA account into the state’s general fund. Kaehny said that some $200 million had been diverted this way in the 2012 budget. The other is with across-the-board cuts in MTA spending – last imposed by Gov. David Paterson – which Kaehny said the same effect of allowing the state to hold onto revenues designated for the MTA.<span id="more-3007"></span></p>
<p>Gov. Cuomo’s proposed budget for FY 2013 does not impose a shortfall on the MTA. But he has eliminated the politically unpopular payroll mobility tax, and his budget proposal calls for replacing the missing funding through the state’s general fund – a source that is even more <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.streetsblog.org/2011/12/07/cuomo-tax-deal-could-leave-320m-in-mta-funding-on-shaky-ground/');"  href="http://www.streetsblog.org/2011/12/07/cuomo-tax-deal-could-leave-320m-in-mta-funding-on-shaky-ground/">prone to diversion</a> by the legislature than dedicated taxes.</p>
<p>Nonetheless, the MTA says its current funding is solid. “When the payroll mobility tax was cut in December, the Governor committed to holding the MTA harmless,” wrote MTA spokesman Kevin Ortiz in an email. “He followed through on this commitment by increasing direct aid to the MTA in the 2013 Executive Budget. The Multi-Year Financial Plan contained in the Executive Budget also indicates that MTA will continue to be made whole for the next three fiscal years.”</p>

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