Governor Cuomo’s Tax Plan Is More Empty Promises On Dedicated Transit Funding

Governor Cuomo's revised payroll tax plan puts the region's subway and bus riders in a perilous position. By exempting almost 80 percent of businesses currently paying the tax (and amid rumors that all schools will be exempt as well), Governor Cuomo is slashing one of the key dedicated sources of funding for public transportation in the state. This leaves the millions of New Yorkers who rely on public transit with little more than IOUs in the place of secure revenue. Public transit is this region's lifeblood, creates construction and manufacturing jobs across the state, and it requires dedicated funding. Eliminating or reducing any source of revenue means that revenue must be replaced by another secure, dedicated source of funding--such as congestion pricing or bridge tolls.

"The MTA can't keep trains and buses running on promises," says Paul Steely White of Transportation Alternatives. "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."

Governor Cuomo promises to pay the system back and hold the MTA "harmless" for the estimated $250-340 million annual loss in dedicated transit revenue by dipping into the state's general fund, but that's no comfort from a Governor who stole $100 million from transit this year, is unwilling to pay for the capital plan with real money, is sitting on the Transit Lockbox Act that would protect dedicated transit funds in the future and still faces a budget deficit.

In December 2009, state lawmakers stole $160 million in dedicated transit funds. These raids led directly to the most devastating service cuts transit riders have seen in a generation: the loss of two subway lines, 32 local and express bus routes and 570 bus stops last year.

Without a commitment from Governor Cuomo for dedicated, sustainable funding, New York's 8.5 million transit riders are likely to once again pay higher fares for less service. Even before the Governor's announcement, Comptroller Thomas DiNapoli warned of the MTA's perilous financial future and of the likelihood of larger than expected fare hikes as a result.

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