A Deal Within the Tax Deal: Transit Riders Beware

Will the income tax deal reached in Albany come at the expense of the city’s mass transit riders? The politicians say no, but those who depend on subways, buses and commuter lines have every reason to wonder if the new arrangement will be taken out of their hides.

The Day

Clyde Haberman offers his take on the news.

To get an agreement on new income tax brackets, Gov. Andrew M. Cuomo and legislative leaders took a big bite out of a tax whose proceeds help the Metropolitan Transportation Authority stay afloat without cutting service or raising fares even more than it already has. With bureaucracy’s genius for ungainly names, it is called the Metropolitan Commuter Payroll Mobility Tax.

Created in 2009, more or less as a desperate attempt to provide some stability to the transportation agency’s creaky finances, the tax takes 34 cents from employers for every $100 of their payroll costs. It affects businesses small and large, nonprofit organizations, schools, self-employed people and others living in the five boroughs and surrounding counties.

The theory, not unreasonable, is that even if employers may not ride the subways themselves, they benefit mightily from a system that gets their staff to work on time. That is true for small shops as well as for huge corporations. An argument can be made, too, that well-ordered mass transit is good for everyone in the region. Without trains and buses running efficiently, New York City withers. Without New York City, New York State withers. It’s that simple.

The tax produces a lot of money — about $1.4 billion a year, well over 10 percent of the authority’s budget. But it is not universally popular. There’s a shocker, eh?

Many small businesses hate it. So do private and parochial schools. Ditto for a lot of self-employed people and nonprofit groups. Ditto and then some for New Yorkers who live in the outer reaches of the metropolitan region and maybe, at best, recognize the A train as having something to do with a number that Duke Ellington made famous.

In particular, Republicans who control the State Senate oppose this levy. So it was modified as the price for their supporting the income tax deal. New exemptions from the payroll tax were created. The cost to the transportation authority will be $250 million a year, the Albany leadership said. Other calculations, though, suggest that the total may exceed $300 million.

Ah, but worry not, the politicians said: We will provide a new subsidy to make up for the lost tax revenue. Scout’s honor, they said.

On that score, a measure of skepticism would not be out of line. Albany budget makers have a history of pocketing money intended for transit to cope with their own headaches. A couple of years ago, a subsidy that made MetroCards available to students all but disappeared, and was then only partly restored.

It is also impossible not to notice that Mr. Cuomo, a man enamored of muscle cars, shows no sign of having an instinctive love of, or appreciation for, mass transit.

Beyond that, the estimates of lost tax revenue offered this week may prove as shadowy as a subway tunnel. “Estimates of what’s needed can be incorrect, exposing the M.T.A. to serious financial risk.” That warning came on Wednesday from three organizations acting in unison: the General Contractors Association of New York, the Straphangers Campaign and the Tri-State Transportation Campaign.

“Payrolls can grow over time,” the groups said in a statement. “Subsidies do not.” Indeed, they said, subsidies can shrink.

And promises can evanesce. In some situations, it doesn’t hurt to invoke Samuel Goldwyn, the great movie producer. He may not have actually uttered these words, but he is routinely credited with having observed that “a verbal contract isn’t worth the paper it’s written on.”


For more local news, including Gov. Andrew M. Cuomo’s characteristic behind-the-scenes maneuvering to garner approval for his tax code, a campaign to ban hansom cabs and horses in Central Park and a finding that subway catnaps may not be as restful as they seem, see the N.Y./ Region section.

Here is what City Room is reading in other newspapers and blogs.

City Comptroller John C. Liu gave raises to 126 employees, despite a federal investigation into his fund-raising practices. [Daily News] (Also see The Wall Street Journal.)

Jon S. Corzine, the former chief executive of MF Global Holdings and former senator from New Jersey, is expected to invoke the Fifth Amendment at a House Agriculture Committee hearing. [New York Post]

Police officers and witnesses said that residents of the Chelsea Hotel got into a violent confrontation with contractors who are renovating the hotel. [DNA Info]

A brief history of the New York City nightclub, from Walt Whitman’s favorite saloon to the artisanal, fauxhemian hotspots of the aughts. [Manhattan]

A State Assembly panel is investigating the particulars of Apple’s deal with the Metropolitan Transportation Authority for its new store in Grand Central. [New York Post] (Also see DNA Info.)

Governor Cuomo’s changes to the tax code could prove problematic for New York Republicans. [Wall Street Journal] (For more on the new tax code, see The New York Times and The New York Post.)

Governor Cuomo said on Wednesday that he planned to veto Mayor Michael R. Bloomberg’s proposal to allow livery cabs to pick up street hails and start from scratch because of a number of issues. [Daily News] (Also see The New York Times.)

A young woman from Long Island was struck and killed by a sanitation truck in Williamsburg, Brooklyn. [New York Post] (Also see Fox Local.)

New city scaffolding — called the Urban Umbrella — leaked onto Mayor Bloomberg during its unveiling in a downpour. [DNA Info]

A plan to grow heirloom Kazakh apples from the city’s early days on Long Island failed to reach fruition, but it highlights the pollution of Newtown Creek. [Metro Focus]

A Bronx community group that operates two food banks and is run by Muslim women plans to close their doors at the end of the year. [Daily News]

A synthetic, smokable drug that some say is more potent and risky than marijuana is appearing in some Brooklyn stores. [The Brooklyn Paper]

A convenient guide to holiday markets in Brooklyn. [Brokelyn]

Powered By WizardRSS.com | Full Text RSS Feed | Amazon Affiliate | Settlement Statement
Go to Source