MTA's Budget Woes Go from Bad to Worse
It is no secret the MTA is in financial trouble, but something you may not have known was just how much trouble they are in. The business payroll tax, which was implemented as part of the bailout package last spring, will bring in $400 million less than expected. Take that and add it to the $143 million the Governor cut from the MTA in the Deficit Reduction Plan. To make matters worse the Governor proposed shifting the payroll tax burden to NYC employers by increasing the payroll tax in NYC to .54 percent and reducing it in the suburbs to .17 percent. Talk about a slap in the face to New Yorkers.
Many want to plug the deficit by diverting capital funds for operating to stave off immediate service reductions. This is a short-sighted answer and the GCA is working diligently to fight this misguided effort. Another idea that has been thrown around is using 10% of the American Recovery and Reinvestment Act funds to plug the holes in the MTA’s operating budget. Again, this is a short-term approach that steals money from desperately needed capital investments. The GCA strongly supports MTA Chairman Jay Walder who has resisted this idea.
In the 1970’s New York engaged in what became known as the “Beame Shuffle”. Mayor Abe Beame asked Congress to allow federal dollars earmarked for capital construction to be used to offset severe operating deficits. Many of the service cuts proposed will be severe, that is why everyone, including the Governor and the New York State legislature, must do their part to fund the MTA. Times are tough, but cutting capital dollars to fill an operating hole only hurts operating costs and service reliability for all New Yorkers.