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New York Post

 

Rotten Rescue

April 22, 2009

By Nicole Gelinas

PRINTER FRIENDLY

Smith's Dubious MTA Plan

STATE Senate Majority Leader Malcolm Smith has announced a new rescue plan for the MTA, and Assembly Speaker Shelly Silver has signaled that it's a good start. But if Albany comes up with a compromise that looks like this Senate plan, it will be twisted and tortured, indeed.

By now, everybody knows about the state-run MTA's problems. The bubble-era real-estate taxes that have supported the authority in recent years have burst. The MTA is stuck with piles of debt and unsustainable union labor costs that the politicians larded on for years, with no way to pay for it all.

So, absent a huge infusion of new cash from Albany, the MTA will raise fares by nearly 30 percent and slash badly needed bus and train service, starting in just a few weeks. Worse, though, the MTA has no way to pay for $20 billion or so of investments in its assets over the next five years -- meaning even less-fun commutes and real harm to New York's fragile quality of life.

Last year, to address both these problems, a board appointed by Gov. Paterson proposed to raise $1.5 billion with a new income-based tax for the city and its suburbs and to raise $600 million with new tolls on bridges to Brooklyn and The Bronx.

But the plan has foundered. Brook- lynites don't want to pay a toll to drive to Manhattan any more than they ever did, and suburban legislators have balked at a new tax on payrolls, especially because it would hit school-districts' payrolls, too, forcing taxpayers to pay twice.

So on Monday, Smith came up with a new plan meant to appease legislators, to get them to pass something. But the plan punts on key issues -- and makes other matters worse. First, Smith has brought back the payroll tax -- and said the tax would be lower on some suburbs to assure suburban legislators' support.

But the tax won't be smaller in Westchester and on Long Island. Otherwise, it wouldn't make any financial sense. These wealthy counties, after all, must provide about a quarter of the tax to have anywhere near enough money. But it's still unclear whether Westchester and Long Island pols will support such a tax -- so it's possibly designed to fail.

The rest of Smith's plan involves a new array of taxes on everything from rental cars to taxi rides to rake in close to $400 million (even as New York's existing smorgasboard of hidden taxes and fees are already a painful joke.)

Moreover, to entice some upstate legislators further, Smith would hand over a big chunk of that money from New Yorkers (nearly $100 million) for noncity roads, including Upstate.

Yes, because of our progressive tax system, the city, which is wealthier, has long supported less wealthy Upstate. But in this case, city folk would be directly bribing upstaters, so that a few Upstate legislators would vote to let us pay for our own transit system. This is an especially egregious precedent.

City residents who've complained for years that Washington shortchanges mass transit should wonder why our legislators want to give away our own money. Worse, the $100 million for Upstate is supposed to support a billion-dollars' worth of new borrowing in a state that's already drowning in debt.

After all of that, Smith's plan -- even under a best-case scenario -- could come up a couple of hundred million dollars short. The MTA's revenues still haven't hit bottom, and none of these political plans address the MTA's fast-rising labor costs.

If Albany finally does pass something and the MTA still has to go to the public for higher fare hikes in the next year or so, because revenues are still just not enough, it would be a catastrophe for the MTA's credibility.

The supposedly long-term reforms Smith does offer for the MTA don't add up to much. The Senate wants the MTA to put its budgets online -- easy enough, because they're already there.

Smith also wants to put legislators on the MTA's board and give those legislators more day-to-day say in the MTA's capital spending program -- making the authority more vulnerable to political pressures that aren't so good for the city's future.

Of course, this is the same Malcolm Smith who bragged a few weeks ago about "restoring $1.2 billion" to the state's nearly $50 billion health-care budget. That money could go a long way toward solving the MTA's problems.

The MTA's woes should be a massive wakeup call to Albany that we've got to rearrange our priorities. If not, we'll bankrupt our key public services -- like the subways -- on our way to bankrupting the state itself.

Original Source: http://www.nypost.com/seven/04222009/postopinion/opedcolumnists/rotten_rescue_165556.htm

 

 
 
 

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