Streams

 

Mta Payroll Tax

Transportation Nation

Moody's: NY Payroll Tax Ruling Could Hurt MTA Debt Rating

Tuesday, August 28, 2012

(photo by: Flickr user: JuntosWorldwide's photostream

The rating agency Moody's issued a "credit negative" for the New York Metropolitan Transportation Authority on Monday. That's because of a court ruling last week that overturned New York's Payroll Mobility Tax, a key source of funding for the MTA.

"It doesn't mean there is a ratings change," cautioned David Jacobson of Moody's. "What we are saying is that... the court case, could -- key word 'could' -- have a negative impact, but [right now] it is not enough to warrant a change in the rating or the outlook."

The court ruling, which we covered extensively last week on TN, does not force the state to stop collecting the tax. The MTA has said it is confident the ruling will be overturned on appeal.

At issue is the right of NY State to tax 34 cents per one hundred dollars of payroll for all employers, including freelancers in the 12 counties around New York City that are served by subways, buses and commuter trains. The Nassau County court ruled that the tax violated the state constitution because some counties where the tax is collected did not vote to support it. That is not necessary if the tax "supports a substantial state interest."

The 2009 law was enacted to bail out the MTA from a $2 billion a year short fall. The MTA said payroll taxes and other fees affected by the ruling contribute $1.8 billion or about 15 percent of the agency's budget.

A ratings downgrade for the MTA could make debt financing more expensive for the agency, which is currently undertaking a $23 billion capital plan.

The MTA is rated A2, an upper/medium grade, by Moody's. Jacobson said that puts the MTA in "pretty solidly in the middle of investment grade scale." The Moody's outlook remains "stable."

 

Read More

Comment

Transportation Nation

NY Gov. Cuomo Budget: MTA Not Gutted, $$ For Amtrak, Infrastructure Fund

Tuesday, January 17, 2012

UPDATED Well, the numbers are out, and the Governor is proposing the New York MTA get $251 million to plug what its losing from the payroll tax the Governor cut last year.

However, while there are no cuts, the MTA's budget remains flat, even as ridership is increasing.  Which means, the authority still has a $35 million budget gap to close, as it announced in December.

(Full analysis of the budget here.)

The $251 million is somewhat less than the $310 million the MTA will lose as a result of the MTA payroll tax cut, although the state argued in a conference call with transit activists today that that's actually not less than the MTA needs, because the tax cut doesn't go into effect until April 1, three months after the MTA's budget did.

[Confusingly, in the text accompanying the budget numbers, the state says it will give $190 million more to the MTA than it did from the general fund last year, which "includes $250 million to the MTA."  Waiting for an explanation on that one to from the governor's office. If past is prologue, that may take some time to sort out.]

There's also $770 million for capital construction aid (as the MTA has outlined in its capital plan.)

Both Gene Russianoff of the Straphangers' campaign and Kate Slevin of Tri-State Transportation Commission seemed to feel they'd dodged a bullet in the FY 2013 budget.

Even Transportation Alternatives had generally kind, if wary, words:
“Today’s budget treats transit riders with respect and is a step in the right direction for New York,” said Paul Steely White, Executive Director of Transportation Alternatives. “We need the governor to treat public transit as a priority, not an afterthought. "

The governor is also proposing $1.16 billion to start off his "New York Works" infrastructure bank for "bridges, roads, and major infrastructure projects,"  with most of that money ($917 million) coming from the federal government.

The budget also includes $9.7 million to improve Amtrak rail service.

And: if you live in Broad Channel or the Rockaways, the state will reimburse you for your tolls, if  Governor Cuomo has his way.

Read More

Comment

The Empire

Cuomo signs $250 million MTA payroll tax roll back bill

Monday, December 12, 2011

Courtesy of the Governor's office.

With Jim O'Grady

Following up on the first two pieces of his economic package passed last week, Governor Andrew Cuomo today signed into law a $250 million cut to the MTA payroll tax. The tax had been a consistent target of suburban lawmakers.

“Small businesses are New York’s growth engine and this tax reduction will help create jobs and get our state’s economy back on track without jeopardizing funding for the MTA,” the Governor said in a statement.

Today’s signing was held at a high school in West Hempstead, where Cuomo shared the stage with dozens of local elected officials who've been trying to repeal the tax since it passed in 2009.

“The MTA payroll tax has been particularly burdensome on Long Island," he said, before predicting that the tax cut would spark an “economic rebound” in Nassau and Suffolk Counties—along with the ten other counties served by the authority.

According to the Cuomo’s office, 289,000 businesses with annual payrolls below $1.25 million will see the tax disappear, while more than 6,000 businesses with payrolls between $1.25 and $1.75 million will see their payroll tax cut by as much as two-thirds. An estimated 414,000 self-employed workers will also see their taxes lowered by the measure.

The new measure would also make elementary and secondary schools–both public and private–exempt from the tax, which won praise locally from both Democratic and Republican lawmakers. The Governor has said that the state will pick up the quarter billion in funding for the transit authority lost through the tax cut.

“The MTA Payroll Tax has been damaging our economy and restricting the growth of quality jobs in New York,” Long Island State Senator Lee Zeldin said in a statement. “Repealing this tax for all small businesses and schools, and reducing the rate for others, spurs real economic development, and helps put New York State on the path towards prosperity.”

Transit advocates expressed concern after the bill’s passage that the state has reneged in the past on promises like the one Cuomo is making to shore up the MTA's budget, and that it's led to steep fare hikes and service cuts like those seen in 2010.

Read More

Comment

Transportation Nation

TN MOVING STORIES: LIRR Pilots Quiet Cars, and Higher Hudson River Tolls = More People Riding Mass Transit

Monday, December 05, 2011

Top stories on TN:

The lost highways of Washington, DC. (Link)

The MTA wants transit apps, but it doesn't want to release key data. (Link)

Do higher CAFE standards create more jobs? (Link)

Andrea Bernstein, Brian Lehrer discuss transit systems and climate change. (Link)

The George Washington Bridge (photo by Kate Hinds)

Lots of New York news this week, as the legislature returns to Albany for a special session:

NY Governor Andrew Cuomo wants to create an infrastructure fund that will finance the repair and development of highways, bridges and major construction projects--and promote innovative public-private partnerships with business and labor. (Capitol Confidential)

Lawmakers will meet to enact a compromise bill extending “taxi hail” service to the outer boroughs, among other issues... (NY Post, NY Times)

...including the MTA's payroll tax, which sources say they want to modify without financially hurting the strapped agency. (NY Daily News)

But: New York Daily News opinion: repealing the payroll tax is "a train wreck of a proposal that would cripple the subway...The idea that the MTA could provide anything remotely close to a safe and affordable service after such a financial pounding is fantasy.'"

In other news:

Higher Hudson River tolls have led to less traffic -- and more people riding public transit into New York City. (New York Times)

House Transportation & Infrastructure Chairman John Mica said he's finished negotiating over some FAA funding issues until Congress resolves a dispute over a labor ruling. (Politico)

U.S. factory production is up--which means automakers are hiring. (The Takeaway)

Toyota begins selling "the world's smallest four-seater." (Detroit Free Press)

A blueprint for how Germany created a financially viable public transit system.  (Washington Post)

The Long Island Rail Road is piloting a quiet car program on one line. (Long Island Press)

The mayor of Ventura, California, is going blind -- so he's moving to Washington DC, where the transit system will enable him to lead a normal life without driving. (Los Angeles Times)

Read More

Comment