NYC MTA in poker game with state legislature over tolls, transit fares
New York City's Metro Transport Authority (we abbreviate) is playing a bargaining game of political poker with the state legislature - gimme subsidies or we'll hike tolls and transit. The poker game has been played in Boston for months now, public transit and toll officials proposing toll and fare increases, then playing off the negative public reaction to pressure the pols to cough up subsidies. Pols beating up on the authority, demanding reforms... on and on.
NYMTA's finance committee Monday approved toll increases from the present $4.15 to $5.26 (with an IAG transponder) and a base transit fare of $2.50 vs $2.00 now plus a 30-day MetroCard transit pass going to $103, up from $81.
This makes the front page of the New York Times and other newspapers today. A full meeting of the MTA board of directors is scheduled for tomorrow to vote on the approximate 25% hikes in tolls and fares along with a set of service cuts.
Service cuts include dropping 35 bus routes and the W and Z subway lines. Off-peak service on subways and buses would be cut and commuter rail service would be reduced.
1,100 transit workers are to be laid off.
NYMTA chair Dale Hemmerdinger called the proposed subway and bus service cuts his board is consdering "horrific."
The Times reports: "Asked whether he had a message for lawmakers in Albany, Mr. Hemmerdinger said, with his voice cracking slightly: "How about just, 'Help.' " (the 'Mr.' titling is the Times pompous style)
NYMTA faces a budget deficit of $1,200m this year not much short of total toll revenue ($1292m) at the Triborough Bridge and Tunnel Authority called NYMTA's Bridges & Tunnels division, which has a cash flow of about $884m. Of this $708m goes to subsidize loss-making rail and bus service. But it's not enough, not by a long way.
Collapse of real estate transactions tax
The biggest source of NYMTA's immediate financial problem is not the several percent decline of traffic and ridership but the collapse of a dedicated revenue stream from a tax on city commercial real estate.
In the first three months of this year NYMTC received $97m in the transaction tax compared to a budgeted $220m. March itself has NYC's transaction tax down 68% on March last year.
Lots of proposals, no political will
As in Massachusetts there are lots of plans and proposals for raising the revenue to subsidize transit in New York City, but no political will in the state legislature to follow through.
In New York a prominent proposal is tolls on the free East River and Harlem River bridges, but reportedly a group of Democrat Bronx, Queens and Brooklyn politicians are blocking that.
COMMENT: You have to wonder about the brain power of officials who would see a tax on real estate transactions as a suitable revenue stream for transit operating costs. Down at about the IQ of the people who believed in mortgage backed securities and the Bernie Madoff's steady returns on capital. No shortage of either variety in NYC.