The tax code changes have not even passed, but transit advocates are already concerned about whether Albany will keep its promise to restore $250 million in M.T.A funding, which is being lost as a result of the rollback of the payroll tax. The Straphangers Campaign, Tri-State Transportation Campaign and the General Contractors Association of New York (which gets a good bit of work from the transit agency) have laid out their concerns in a public statement today.
We appreciate the effort by the Governor and Legislative Leaders to limit the impact of reducing the Payroll Mobility Tax on the MTA.
But we think they can do better.
Under their proposal, many thousands of small businesses would be made exempt from the PMT. To make up the loss, the State leaders propose a new subsidy to the MTA of $250 million.
The problem with this approach is three-fold:
- estimates of what’s needed can be incorrect, exposing the MTA to serious financial risk;
- payrolls can grow over time, subsidies do not; and
- subsidies can be lowered over time, as was the appropriation for student MetroCards;
A better way can be found in the way public schools are being treated right now. These schools now pay the PMT and then apply for reimbursement from the State.
This rebate approach assures that the MTA gets the PMT money up front and there’s no need for estimates.
We urge the approach for public schools be adopted for small businesses.
Transportation Alternatives is even more concerned. “The MTA can’t keep trains and buses running on promises,” Paul Steely White said in a statement. “The State Legislature created the Payroll Mobility Tax as a dedicated fund because they
recognized that public transportation is critical to our region’s economy and essential to the lives of millions of New Yorkers. This move to defund it may well lead to future fare hikes and service cuts.”
The transit groups have made similar pronouncements in the past, veiled threats to the governor—who is not pushed around anyway—so this may just be preemptive measures to try and protect the funds. Still, should the funds not be restored, it presents a very real threat to the agency’s ongoing finances.