ANALYSIS: What Cuomo's Tax Bill Says About Transit

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New York Governor Andrew Cuomo With Reporters (Photo: NY Governor's Office)

When New York Governor Andrew Cuomo took the stage at Medgar Evars college in Brooklyn on Friday afternoon, he looked like the cat that ate the canary. The largely black student body gave him thrilled applause. One student yelled a soprano “we love you!” as he took questions from reporters. Not so-muted-references to Cuomo for President in 2016 swirled through the room.

It’s been that kind of week for the New York governor, who took several compliments for running a “functional” government – unlike --get it -- the one in Washington. He put together a tax plan that managed simultaneously to cut taxes for everyone while raising taxes for the super-rich. He set up an infrastructure bank to fund sorely-needed construction projects and create jobs. He was able to dole out hurricane relief funds to a besieged state. And – the subject of Friday’s Medgar Evers lovefest – set aside $75 million for “inner-city” job training and placement, a true passion of his.

But there’s one group that, this week, felt left out. For transit advocates under Governor Cuomo, it’s been a season of swallowing lemons.

There were the departures of MTA chief Jay Walder and Port Authority executive director Chris Ward, both seen as transit supporters – and their replacement with Cuomo loyalists Joe Lhota and Pat Foye, neither of whom has a background in public transportation.

There was the introduction of a massive plan to build a new Tappan Zee bridge, with the transit option mysteriously erased at the last minute.

And then: this week, to get his tax bill past the Republicans, the governor had to be willing to throw the MTA payroll tax under a bus, at least partially. Schools and small businesses would no longer have to pay the tax, which plays a vital role in maintaining the transit system.

Instead, there’s a vague assurance in the tax legislation passed this week that “any reductions in transit aid attributable to reductions in the metropolitan commuter transportation mobility tax authorized under article 23 of the tax law shall be offset through alternative sources that will be included in the state budget.”

Governor Cuomo reiterated that assurance Friday: “The state will pay, dollar-for-dollar, whatever amount would have been raised by that tax. So the MTA is held totally harmless -- we’re just shifting the source of those funds from the MTA payroll tax to state funds.”

And the governor said no one should conclude from this that he doesn’t care about transit as much as, say, jobs for inner-city youth. “Obviously the MTA is very important to the region's economy. I’m very excited about my appointee to the MTA, Joseph Lhota -- all reports are he’s doing a great job and this will not cost the MTA one penny.”

But the idea of a broke state government being the guarantor of transit funds has left straphangers advocates uneasy.

Mitchell Moss, the director of the Rudin Center for Transportation at New York University and a member of Cuomo’s search committee that recommended Joe Lhota to head the MTA, has been willing to give Governor Cuomo the benefit of the doubt when it comes to transit. But in an online op-ed in the New York Times, Moss wrote: “Apparently forgotten [in the agreement] are the millions of low-income New Yorkers who, in addition to getting zero in tax cuts, must now rely on a Metropolitan Transit Authority that lost $250 million in tax revenue in exchange for a pledge that the funds will be made up, but for how long and in what form, no one knows.”

Moss continued: “Rather than treating the M.T.A. finances as an urgent problem, it makes them worse to gain support from Long Island and other suburban state legislators.”

At the end of the day, exactly how the funds will be spent won't be clear until there's a 2012 budget. If past is prologue, that, too, will be decided in a last-minute round the clock jumble that will have legislators, and everyone else, trying to figure out what they voted on after the fact.

There was another black-eye for transit advocates this week – the death of an obscure, but to them vitally important, bill – the “lockbox bill”-- that would have made it more difficult for the state legislature to help itself to taxes that otherwise would go to fund public transit. As recently as the year before last, the legislature did just that, contributing to the MTA’s budget woes by taking $150 million that was supposed to go to transit and using it to plug the state’s budget gap.

Both houses of the state legislature overwhelmingly passed a bill that would have made that more difficult to do. But in the final run-up to the tax bill, most of that legislation was crossed out -- literally.

“The original legislation would have made it more difficult for the Governor to unilaterally divert MTA dedicated transit funds,” said a statement issued group of a dozen labor, transit, and good government groups.  The legislation passed this week “does not constrain future raids on transit funds,” the statement continued.

There was another source of concern this week – an infrastructure fund being established under the bill would accelerate state funding of big capital projects – and leverage private funds.  It’s been a dream of President Barack Obama to establish such a fund, and now Cuomo has one.

But both the press release and the legislation said it would fund roads, bridges, water tunnels, canals, dams, flood control efforts, even parks. But not transit. That left planners like Robert Yaro of the Regional Plan Association befuddled.

On Friday, Governor Cuomo said both the MTA and the Port Authority would be eligible for the funds, and that details would be revealed in his State of the State address in January.

But still, there’s a wariness that this Governor cares more about muscle cars than a muscular transit system.

Part of the unease is fueled by the rapidity with which the bill this week was presented. On Tuesday, the Governor issued a press release with the broad outlines of the agreement, but details were sketchy.

Gene Russianoff of the Straphangers Campaign says he worked all week to get details, but few were forthcoming. “The process was opaque, the 180 degree opposite of transparent," he said. "I spent the better part of the week calling the administration and I didn’t hear back.” Those details he did get were misleading, he says, though he says that could be because the agreement changed after they were relayed to him. For example, he was told the MTA provisions would sunset – that’s not the case. He was told the exemptions wouldn’t include public schools – but they do.

(The same thing happened to us – the Governor’s office initially assured us the $250 million hole to the MTA budget would be plugged by a dedicated stream from the $1.9 billion reaped by the tax on the super-rich – but when the bill was finally presented -- minutes before it was voted on -- there was no such provision.)

Russianoff also says he was asked not to issue a statement on the lock box because a compromise was being brokered --  but when the language finally emerged, he was “disappointed.”

“This is my experience in Albany,” Russianoff said, of hastily-crafted legislation. “It’s too early, and it’s too early. And then it’s too late.”