The Commission report, presented to Governor Paterson by Commission Chairman Richard Ravitch, identifies two new revenue sources for the MTA.

View the report

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May 7, 2009

by William Neuman and Nicholas Confessore

The State Legislature passed a series of new taxes and fees late Wednesday night meant to keep New York’s base subway fare from rising above $2.25 this year. But the hastily drafted bill, approved largely along party lines, raised many questions about how the plan would work and how effective it would be in stabilizing the struggling Metropolitan Transportation Authority.

In the short term, the plan would appear to raise significantly less money this year than in some earlier projections, although legislative staff members said it would be enough to get the authority through the year.

There were also questions about how a 50-cent surcharge on yellow cab rides in New York City would be collected from thousands of taxi drivers and owners.

And in the Senate, Republicans harshly criticized a promise in the bill to have the state reimburse school districts for the cost of a payroll tax, saying there was no guarantee the promise would be kept.

Questions also remained about the authority’s capital spending program, which is only partially financed in the rescue plan.

The vote came five months and two days — an agonizing period of political wrangling and brinksmanship — after a rescue plan for the transit system was proposed by Gov. David A. Paterson and Richard Ravitch, a former authority chairman, who had been appointed by the governor to head a commission on the authority’s finances.

In the end, the bill passed largely along partisan lines, with only Democrats voting for it in both the Assembly and the Senate. Republicans, many of whom objected to the additional taxes, were unanimously opposed. In the Assembly, some Democrats voted no, but in the Senate, all 32 Democrats voted for the bill.

Democrats hold a 32-to-30 majority in the Senate, and much of the delay in forging the rescue plan was due to objections from Democrats there.

It was not until this week that the last Senate holdouts were won over through a compromise on the school reimbursement. Aides to the governor and the Legislature worked overnight Tuesday and throughout the day on Wednesday, racing to finish writing the bill in time for a vote Wednesday night.

The bill included the payroll tax, of 34 cents for every $100 in wages, to be paid by employers in the 12 counties served by the transportation authority. It also included a series of fees on drivers and vehicles, the taxi surcharge, a $25 surcharge on vehicle registrations, a $2 fee on drivers licenses and an additional 5 percent tax on car rentals.

The bill did not set a new subway fare — only the authority can do that — but officials said it would give the authority enough money to prevent a planned fare and toll increase this year of 20 to 30 percent. It would also halt deep service cuts.

Legislative leaders and officials at the authority agreed that the base subway and bus fare would rise to $2.25, from $2. Other fares, commuter rail tickets and tolls would go up about 10 percent.

Together, the new taxes and fees would raise about $1.9 billion a year for the authority. This year, because less than a full year’s revenue would be captured, they would raise $1.1 billion.

But even that is less, by at least $165 million, than estimates that legislative staff members were working with as recently as Tuesday.

Among the reasons: Earlier versions of the plan called for the payroll tax to apply retroactively to wages paid since Jan. 1. But the bill changed that to March 1 for most employers. Schools, on the other hand, will not have to begin paying the tax until Sept. 1.

The bill also postponed the start of collections on the taxi surcharge until January 2010.

It was not clear how the tax would be collected from thousands of taxi owners.

In the debate on the bill on Wednesday, Senate Republicans like Andrew Lanza of Staten Island questioned the promise to reimburse school districts for the payroll tax, since it must be appropriated by the Legislature each year.

“That’s the guarantee?” Mr. Lanza said.

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May 6, 2009

By Glenn Blain and Pete Donohue

Doomsday derailed!

Gov. Paterson and state legislative leaders agreed Tuesday night on a transit-funding plan eliminating the need for sky-high fare hikes and deep service cuts, officials said.

The bailout, which could be adopted through legislation as soon as Wednesday, includes an employer-paid payroll tax, a 50-cent surcharge on taxi trips and other measures to fund the subway, bus and commuter train system.

“Halleluiah,” Gene Russianoff of the Straphangers Campaign said. “It’s great news for subway, bus and commuter rail riders.”

The deal also provides two-years worth of funding for the Metropolitan Transportation Authority’s next five-year capital program starting next year.

That program includes basic maintenance and upgrades to tracks, signals and other equipment.

“We have rescued this system from the brink of the abyss,” Assembly Speaker Sheldon Silver (D-Manhattan) said.

Facing massive – and ballooning – deficits, the MTA had scheduled fare hikes up to 30% to hit straphangers May 1, and commuter train riders the next day.

A monthly MetroCard was set to rise from $81 to an eye-popping $103.

The deal, announced in Albany by Paterson, Silver and Senate Majority Leader Malcolm Smith (D-Queens), calls for more modest hikes raising fare and toll revenues by 10%, officials said. A monthly MetroCard now will likely be priced at about $89.

The one-way cash subway and bus fare, now $2, is expected to increase to $2.25 – not $2.50.

The deal signals an end to the roller coaster ride straphangers have been on for nearly a year with a series of MTA budget proposals, hearings, cost-cutting plans and ballooning deficits as the recession continued to depress tax revenues.

The MTA will not have to enact such Draconian cuts leading to the elimination of more than two dozen local bus routes, longer waits for subway trains and the overnight shuttering of a few stations it authorized earlier this year.

“This has been very difficult for the commuters of the MTA region,” Paterson said. “We can assure them this evening there will be no surprises. There will be no further cuts or fears about fare hikes or toll increases.”

A state commission headed by former MTA Chairman Richard Ravitch released a transit-funding plan in December that included the payroll tax and tolls on East and Harlem river bridges.

Some senate Democrats opposed tolls, stalling the rescue effort. The plan agreed to Tuesday does not include tolling the free bridges.

Smith called it “victory for the public” that the Senate stood firm against tolls.

Democrats have a 32-30 majority in the Senate and need every Democrat to vote for the rescue plan in the face of unified Republian opposition.

Transit officials have said that they would likely push back the May 31 and June 1 fare-hikes to do the computer programing and other necessary work to implement the scaled-back increases.

Read more: “MTA ‘doomsday’ scenario averted as Gov. Paterson, legislature reach deal” – http://www.nydailynews.com/ny_local/2009/05/05/2009-05-05_mta_doomsday_scenario_averted_as_gov_paterson_legislature_reach_deal.html#ixzz0EjNrIRRx&A

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April 20, 2009

By James T. Madore

ALBANY – Negotiations to avert fare hikes and service cuts by the MTA will intensify Monday as lawmakers return to the Capitol after the holidays.

State Senate Democrats were expected to debate privately another bailout plan that includes a modified payroll tax on employers in the 12 counties served by mass transit and adding a host of new levies, knowledgeable sources said last night. Gov. David A. Paterson also was to step up efforts to woo Senate Republicans with a first meeting with Sen. Dean Skelos (R-Rockville Centre), the minority leader.

State officials are seeking to head off implementation of a “doomsday” budget by the operator of the Long Island Rail Road, New York City subway, Long Island Bus and other services. Several trains would be mothballed next month and fare hikes averaging 23 percent would go into effect around June 1.

Paterson has vowed to keep lawmakers in Albany until a deal is reached.

“This is obviously something that we’re going to be heavily engaged in this week,” said Austin Shafran, spokesman for Senate Majority Leader Malcolm Smith (D-St. Albans).

Factions of Senate Democrats have derailed a $1.2-billion rescue plan for the Metropolitan Transportation Authority – backed by Paterson and the Assembly’s Democratic majority – over the payroll tax and tolls on now-free East River and Harlem River bridges. Shafran said Sunday the Senate would not consider bridge tolls, including last week’s amended proposal from a state commission.

Paterson aide Erin Duggan said: “There are a lot of good options and solutions on the table. The governor just needs the legislature to work with him.”

Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan), said he continues to work with Paterson and Smith to “keep huge fare hikes and major service cuts from going into effect.”

The Senate GOP, shut out of talks so far, is demanding money for bridges and roads on Long Island and upstate. With Democrats split, Republican votes are required to adopt a rescue plan.

Richard Ravitch, the former MTA chief who led the state commission, said, “If they haven’t done anything by the end of [this] week, the MTA is going to start taking drastic action.”

An MTA spokesman wasn’t immediately available to comment.

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April 13, 2009

by William Neuman

Almost from the beginning, Republicans have criticized the push to have the State Legislature pass a financial rescue plan for the Metropolitan Transportation Authority because it ignored another gaping hole in transportation spending: financing for a statewide highway and bridge-building program.

Those complaints have taken on a new urgency as the rescue plan has floundered in a narrowly divided State Senate, which is controlled by Democrats who acknowledge that passing the plan may require Republican support.

“To just ignore the highway, road and bridge plan and go to trying to negotiate a schedule for a new M.T.A. capital plan was just not the right thing to do,” said Senator Thomas W. Libous, a Republican from Binghamton who is the ranking minority member on the Senate Transportation Committee.

But he acknowledged that finding money for the road program during a deep recession could be every bit as problematic as solving the transportation authority’s fiscal woes.

“The need is going to be huge,” Mr. Libous said, referring to the money for the highway program. The Senate is the main stumbling block to helping the ailing authority; Gov. David A. Paterson and Assembly Speaker Sheldon Silver have already endorsed a rescue plan.

The dispute centers on separate five-year capital spending programs for the New York City metropolitan area’s mass transportation system and the state roadway network, both of which expire within the next 12 months.

In the past, the Legislature has generally allotted equal amounts to roads and transit.

That has ensured support from both parties and all areas of the state: The city is seen as benefiting most from the transit money, while upstate areas rely heavily on roadway spending.

But that pattern was broken last year when Mr. Paterson chose to seek a financial rescue for the authority first.

The rescue plan was primarily intended to be a stable source of financing for the authority’s next capital program, which is to run from 2010 to 2014.

The program is expected to cost about $28 billion, much of that borrowed through the sale of bonds. It would pay for big-ticket items like new trains and buses; the renovation of subway stations and signal systems; and major projects, like the Second Avenue subway line.

The rescue plan would also help the authority deal with the crisis affecting its operating budget, which pays for the day-to-day expenses of running trains and buses. To help close a deficit of at least $1.2 billion, the authority is planning to raise fares and tolls by 20 to 30 percent and enact deep cuts in service.

The rescue plan would eliminate most of those service cuts and trim the fare increase to about 8 percent.

It would also raise money through a tax on payrolls in the 12-county region served by the authority and tolls on East and Harlem River bridges.

Mr. Paterson and Mr. Silver both support the plan, but in the Senate, where Democrats have a narrow 32-to-30 majority, a group of city Democrats has blocked the toll proposal while a group of suburban Democrats has opposed the payroll tax.

That has led to appeals for support from Republicans, who have largely sat on the sidelines as Democrats bickered. Republicans have pointed to the lack of a corresponding highway and bridge program and have also said that they have been left out of negotiations about a rescue plan.

“If you brought in the bridge and highway program, that would help it become a bipartisan issue, as it’s been in the past,” said Robert D. Yaro, president of the Regional Plan Association, a civic policy and planning group. He said allowing the capital programs to lapse would cost the state tens of thousands of jobs. “This is a pretty fundamental economic issue for the whole state,” he said.

An estimate last year said a new highway program would cost $26 billion, though its final price would probably mirror that of the authority’s program. It would pay for general roadway upkeep, like repaving and the installation of new signs and traffic signals, and also for larger projects, like the construction of bridges and roads.

The road and transit programs receive some funds from the federal government, with the rest coming through the sale of bonds.

Borrowing costs for the current highway program are paid out of a trust fund financed largely by gasoline-related taxes and motor vehicle registration and licensing fees. But that fund is running out of money, and to pay for the next five-year program more financing will have to be identified — possibly by substantially increasing the same taxes and fees that supply the trust fund.

That will not be an easy task during a recession and will almost certainly ignite a public debate that could be just as rancorous as the one raging over the transportation authority rescue.

An early proposal for a new five-year highway program written last year estimated that the state would have to inject an additional $5 billion into the highway trust fund over the course of the program — with more needed to pay debt service in following years.

Meanwhile, the Transport Workers Union, which represents transit workers, began running television and radio ads last week taking aim at the three Republican senators from New York City, claiming that Republican inaction was endangering the transit system.

The three senators, Frank Padavan from Queens, Martin J. Golden from Brooklyn and Andrew J. Lanza from Staten Island, all disagreed strongly with the ads, saying they had never been invited into discussions with Democrats on the rescue.

“Sure, I would want to get involved, but we’ve been premeditatively kept out of it,” Mr. Padavan said, adding that he would support a payroll tax but saw bridge tolls as problematic.

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April 1, 2009

by William Neuman and Nicholas Confessore

Negotiations on a financial rescue plan for the Metropolitan Transportation Authority were thrown into turmoil on Tuesday afternoon in Albany when a small group of Democratic senators from suburban districts moved to oppose a regional tax on payrolls, according to two people close to the talks.

It was the second time that a revolt within the narrow Democratic Senate majority had derailed efforts to forge a bailout that would scale back a large increase in fares and halt deep service cuts by the authority.

The obstacle arose just as negotiators believed they were close to replacing the revenue from an earlier proposal, tolls on the East and Harlem River bridges, that had been rejected by another group of senators.

The payroll tax, a key component of the rescue plan, would be paid by employers in the 12 counties served by the authority, and was expected to raise as much as $1.5 billion a year.

The objections to the payroll tax came on a day full of activity, as hopes of a compromise on the rescue were raised in the morning and then abruptly dashed in the afternoon.

“It’s not dead but it’s definitely not in good shape,” said one of the people close to the talks, who spoke on condition of anonymity because the talks were continuing. “I think we’re nowhere.”

Assembly Speaker Sheldon Silver, who has pushed for a rescue, said he expected negotiations to resume.

“There’s still a will” to find a solution, he said Tuesday night. “The difficulty is in putting our hands around how we change it.” He added, “Maybe a little time out would be helpful.”

The Senate majority leader, Malcolm A. Smith, was upbeat Tuesday morning after emerging from a meeting with Gov. David A. Paterson and Mr. Silver.

“I’m optimistic we may have something done between now and tomorrow,” Mr. Smith said.

At the same time, Mr. Paterson and Mr. Silver conceded they were unable to overcome resistance in the Senate to the new bridge tolls and said that another source of revenue would have to be found to replace the toll money.

The new tolls were opposed by a group of half a dozen Democratic senators from Brooklyn, Queens and the Bronx, and Mr. Smith has made it clear for weeks that the Senate would not pass a plan that included the new tolls.

The rescue plan is intended to spread the burden of helping the authority among several groups. Transit riders would pay through a more modest fare increase than one that is set to go into effect later this spring; drivers would pay through tolls; and employers would contribute through the payroll tax.

To replace the toll revenue, officials said Tuesday that they were looking at a series of other charges on motor vehicles, including a surcharge on taxi rides in New York City, an increase in the vehicle registration fee and an increase in the tax on car rentals.

After the morning meeting, legislative staffers and aides to the governor and the authority began to evaluate what combination of vehicle-related charges would generate sufficient money to help the authority, which has a $1.2 billion deficit this year and larger deficits looming.

But at a meeting later in the afternoon with Mr. Paterson, a group of senators from suburban districts told him they would not support the payroll tax.

The senators were Craig M. Johnson of Nassau County, Brian X. Foley of Suffolk County, and Andrea Stewart-Cousins and Suzi Oppenheimer, both of Westchester County.

“I’m very uncomfortable with the proposed payroll tax,” Mr. Foley said later in an interview. “Suffolk County is in the outer ring of the service area. Our businesses would be paying into a system that they don’t get much out of.”

While acknowledging his opposition to the payroll tax, Mr. Foley declined to discuss his talks with other officials.

The sudden turnaround further exposes the precarious situation in the Senate, in which Democrats have a 32-to-30 edge over Republicans, which means that a single Democrat has the power to block virtually any initiative.

Tuesday’s payroll tax revolt could not be seen as totally unexpected, since several Democrats had voiced discomfort with the tax in the past. Yet Mr. Smith seemed to have been taken by surprise by the senators’ opposition.

“There has been no consensus reached on a plan to address the M.T.A.’s budget shortfall,” said Austin Shafran, a spokesman for Mr. Smith, when asked about objections to the tax. He added that everything was still on the table “except tolls.”

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March 25, 2009

by William Neuman and Jennifer Lee

The board of the Metropolitan Transportation Authority voted on Wednesday morning to enact a series of fare hikes and service cutbacks needed to keep the transit system from going broke.

The vote was broken largely into three parts: fare hikes, toll increases and service cutbacks. After hearing from the public and the board members, the board approved each by a vote of 12 to 1.

“This is your last chance or forever hold your peace,” H. Dale Hemmerdinger, the chairman of the board, said before the final vote.

The lone dissenting member in each vote was Norman I. Seabrook, president of the 9,500-member New York City Correction Officers’ Benevolent Association.

Board members called the combination of fare increases and slashing bus, subway and commuter rail cuts a disaster but said they could no longer wait for lawmakers in Albany to rescue them.

The fare hikes on the subway and buses, including an increase in the base subway and bus fare to $2.50, from $2, will take effect on May 31.

Commuter rail fares will increase on June 1. Tolls on the authority’s bridges and tunnels will also go up, with the increase taking effect in mid-July.

The service cuts are far reaching. They include the elimination of 35 bus routes and two subway lines, the W and Z. Off-peak and weekend subway, bus and commuter rail service will also be cut back.

The authority’s board had hoped for a different outcome.

Gov. David A. Paterson and Assembly Speaker Sheldon Silver have championed a financial rescue plan for the authority that would have prevented the service cuts and allowed a much smaller fare increase.

That plan [pdf], put forth by Richard Ravitch, a former authority chairman, would have funneled new revenues to the authority by creating a new tax on payrolls and tolls on the East River and Harlem River bridges. But several Democrats in the State Senate opposed the bridge tolls and blocked the rescue package.

“It’s truly sad that a few individuals can hold all these brave individuals hostage,” Mr. Hemmerdinger said when the meeting started.

Officials in Albany have said they still hold out hope that a compromise can be reached in the coming weeks. But the authority said it had to go through with the Wednesday vote to give itself time to plan and implement the fare and service changes.

If lawmakers do eventually pass a rescue package, authority officials say they may be able to stop the changes before they take effect.

Before the vote, the board heard from a parade of M.T.A. employees, transit advocates and city officials who criticized the fare hikes and service cutbacks that would affect a system that covers two-thirds of all mass transit riders in the United States. A number complained about how the cuts would disproportionately affect the middle class, who were already struggling in the city’s economic downtown.

Norman Siegel, a onetime candidate for the city’s public advocate and longtime civil liberties lawyer, tried to portray the board as out of touch, asking the board, “I am curious how many of you use the trains or buses regularly?”

When only some raised their hands, he said, “I hope that one day everyone here raises their hand.” He added, “You clearly don’t represent the diversity of the city or the state.”

David I. Weprin, the city councilman who is chairman of the Council’s finance committee, said that fare hikes should be the absolute last option. “They are neither new nor innovative,” he said. Instead, he urged for pursuing more aggressive advertising strategies and appealing to Washington.

Others used the opportunity to vent against Wall Street and the broader financial crisis, as much of the M.T.A.s’ financial burden comes from debt payments on money borrowed for capital improvements through Wall Street companies.

Elliot G. Sander, executive director of the M.T.A., acknowledged the cost of the spending binge earlier in the decade, describing the capital improvements made from 2000 to 2004 as being put “on a credit card.”

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March 24, 2009

by William Neuman

The base subway and bus fare in New York City would rise to $2.50, up from $2. A 30-day MetroCard would cost $103, up from $81. A monthly ticket on the Long Island Rail Road for a commuter who travels between Ronkonkoma and Pennsylvania Station would increase to $352, up from $278.

These are some of the fares that New Yorkers would pay under a drastic proposal that is expected to be approved by the Metropolitan Transportation Authority on Wednesday.

And those higher fares will buy even less: the authority’s board is also expected to approve deep service cuts.

The proposal — which also includes higher tolls on the authority’s bridges and tunnels — was approved on Monday by the board’s finance committee, whose members said they were forced to act because the State Legislature had not passed a financial rescue package.

“We’re going to vote the fare hikes,” said H. Dale Hemmerdinger, the authority chairman, referring to Wednesday’s board meeting. “It’s very painful to everybody who uses the system.” He called the service cuts “horrific.”

Asked whether he had a message for lawmakers in Albany, Mr. Hemmerdinger said, with his voice cracking slightly: “How about just, ‘Help.’ ”

In Albany, Gov. David A. Paterson, who supports a transit rescue package, said the authority should not postpone a vote on the fares. The authority has said that if the Legislature should approve a rescue package after the fare vote, the board could revisit the fare and toll increases and service cuts.

“Delaying action, to me, would just ring too true of what’s gone on in Albany too many times,” Mr. Paterson said. The governor and the Assembly speaker, Sheldon Silver, support a rescue package that includes a smaller fare increase of 8 percent, a new tax on payrolls and tolls on the East River and Harlem River bridges. But the package has been held up in the Senate, where several Democrats oppose new tolls.

If approved, the new subway and bus fares would take effect on May 31. New commuter rail fares would go into effect June 1, and the higher tolls would take effect in mid-July.

The new fares and tolls are meant to increase revenue by 23 percent. But to achieve that, the price of some services would go up by quite a bit more.

Among the hardest hit are riders of Long Island Bus, which primarily serves Nassau County, where a single ride would cost $3.50, up from $2. And riders would no longer be able to use unlimited-ride MetroCards.

Proposed increases for disabled riders in New York City on the door-to-door Access-a-Ride service were scaled back, however. The authority had proposed raising those fares to double the base subway fare. Instead, the fares will continue to mirror the base subway fare, which is set to rise to $2.50.

Under the proposal expected to be approved on Wednesday, weekly MetroCards for city subways and buses would rise to $31, from $25.

Express bus fares would rise to $6.25, from $5.

The bonus on pay-per-ride MetroCards would remain at 15 percent, which means that a bonus ride would be earned after the purchase of seven rides. Viewed another way: the cost of a ride on a bonus pay-per-ride MetroCard would be $2.17, up from $1.74 today.

On Metro-North Railroad, a person commuting between White Plains and Manhattan would pay $243 for a monthly ticket, up from $191.

One-way E-ZPass tolls on the authority’s major bridges and tunnels, like the Robert F. Kennedy Bridge and the Brooklyn-Battery Tunnel, would rise to $5.26, from $4.15.

The far-reaching service cuts include the elimination of 35 bus routes and the elimination of the W and Z subway lines. Off-peak service on subways and buses would be cut and commuter rail service would be trimmed. About 1,100 transit workers would be laid off. The service cuts would go into effect over the next several months.

The combination of higher fares and diminished services are meant to help close a $1.2 billion budget gap this year. But officials said on Monday that the authority’s finances continued to worsen, and further measures to balance the budget might soon be required.

Revenue from taxes on real estate transactions have continued to plummet. Through mid-March, the authority received $97 million in such taxes — $123 million less than it expected to receive and $210 million less than it took in during the same period last year.

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March 3, 2009 The plan for funding the Metropolitan Transportation Authority has two types of ideas, bad and worse, ranging from new bridge tolls to higher fares. And then there is the worst, the payroll tax that would radiate out far from those who use the MTA but would find themselves paying part of the price with little to show for it.

Leaders of local governments as well as business organizations have been unanimous and forceful in their opposition to the proposal, a 0.33 percent MTA payroll tax, calling it “one of the most anti-business, anti-economic development and anti-common-sense proposals to see the light of day.”

And, they might add, this bad idea could not come at a worse time, as all those that could be forced to pay are already struggling to make it through tough times.

The point that keeps getting repeated is one that the MTA seems to either not understand or not accept: All businesses and governments already are finding ways to cut back and avoid passing on their expenses to others. All they want is for the MTA to do the same.

The tax would collect 33 cents for every $100 from all public, nonprofit and private payrolls in the 12-county region covered by the MTA and raise about $1.5 billion a year. If the Legislature does not approve the tax, the MTA will raise fares even more than it already plans to.

Nobody likes to pay more, especially at a time like this. That’s why the MTA plan is getting a frosty reception in New York City for proposals to collect tolls on bridges over the East and Harlem Rivers. From the northern perspective, the bridge tolls make some sense, charging people who actually use a service, much like the tolls that motorists pay on all the other bridges that cross the Hudson.

But to extend the payroll tax up into the Hudson Valley, where the only presence of the MTA is very limited service — by metro area standards — from the Metro-North Railroad reveals the strategy of the authority. It will go after all the money it can from all the sources it can find unless the Legislature stops it. And when it comes to the payroll tax, that’s exactly what the governor and legislators need to do.

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March 3, 2009Helping the M.T.A., Ravitch Takes a 3rd Turn as Fiscal Saviorby Sam RobertsRichard Ravitch insists that the fight has not been as lonely as it often looked. Public transit advocates, environmentalists, labor unions, regional planners, building contractors, editorial writers, chambers of commerce and civic groups, he says, have also gotten on board.But if the Legislature finally agrees this month to spare New York City’s subway and bus systems from draconian service cuts and fare increases — by imposing a regional payroll tax and levying tolls on bridges over the East and Harlem Rivers — most of those involved in the issue agree that the single-minded Mr. Ravitch would be entitled to much of the credit.

“He has been a force of nature throughout this process,” said Kevin Sheekey, New York City’s deputy mayor for government affairs.

About nine months ago, Gov. David A. Paterson enlisted the 75-year-old Mr. Ravitch, a successful builder and businessman, to help rescue the Metropolitan Transportation Authority. There may be few second acts in American lives, but Mr. Ravitch gamely agreed to reprise the mission he successfully undertook three decades ago for the state’s bankrupt Urban Development Corporation and shortly thereafter for the transportation authority as its chairman.

In December, after public hearings, Mr. Ravitch’s commission concluded that the tax and tolls, coupled with a much more modest fare hike than the transportation authority was proposing, represented the most equitable long-term fix. He faced a dauntingly heavy political lift, but nonetheless believed his assignment would be finished by now, well before Albany confronted the state’s own gaping deficit for the fiscal year that begins April 1.

The political climate he has encountered, however, is very different from the one he found in the 1970s when he helped Gov. Hugh L. Carey deliver the state from an even worse fiscal crisis. These days, the consensus is that Albany has been hobbled by less bipartisanship and weaker leadership.

Until recently, Mr. Paterson, an unelected governor, appeared to be more consumed by filling Hillary Rodham Clinton’s Senate seat. As for Mayor Michael R. Bloomberg, his political capital seemed depleted by his fight to extend term limits, and by the legacy of losing a battle in Albany last year to impose congestion pricing, a fee on drivers entering Manhattan.

And though Democrats control the Legislature for the first time in decades, they hold a bare majority in the Senate.

In the Assembly, Speaker Sheldon Silver had been reluctant to corral recalcitrant Brooklyn, Queens and Bronx legislators; he depends on them for his leadership post, and many of their constituents object to the tolls on bridges into Manhattan that are now toll-free.

Last week, Mr. Silver offered a compromise. He suggested that all the new tolls equal the base subway fare of $2.

In the first few years, the lower tolls might not raise as much as Mr. Ravitch had envisioned, but an agreement to impose tolls would offer the potential for more revenue for the transportation authority in the future.

As Mr. Silver explained it: “This plan is partially in response to hours and hours of hearing objections to prior plans and is an attempt to bring about a compromise. That’s the role of leadership.”

On Friday, the Senate majority leader, Malcolm L. Smith, said his fellow Democrats would seriously consider Mr. Silver’s compromise. But on Monday, he called for a full accounting of the transportation authority’s finances to ensure that the latest plan would indeed result in a smaller fare increase and minimal service cuts.

Since issuing the commission’s recommendations, Mr. Ravitch has relentlessly wooed individual legislators, attended town meetings in their districts, conferred with them in person and made repeated trips to Albany.

“Dick’s put a lot of time into this and has a lot of street cred up there,” said Gene Russianoff, a staff lawyer for the Straphangers Campaign, a mass transit advocacy group that supports the Ravitch Commission proposals. “There’s a night-and-day difference between this and congestion pricing. The reaction of the political class to Bloomberg and to Dick is 180 degrees.”

As he headed to Albany last week on another lobbying mission, Mr. Ravitch said, “I do have a good personal relationship with the Legislature, and I’ve known these people a long time. Shelly has given me every opportunity I could have to make this case,” Mr. Ravitch added.

Mr. Silver hinted at a comparison to Mr. Bloomberg, with whom he has often clashed, when he described Mr. Ravitch’s approach. “His style is not confrontational,” Mr. Silver said. “He recognizes, more than most people, the importance of the members of the Legislature and speaks with the appropriate tone to them.

“One of the big difficulties with the M.T.A. is a credibility gap — a history of two sets of books, of hiding surpluses,” said Mr. Silver, who became close to Mr. Ravitch during his chairmanship of the transportation authority and through their involvement in Jewish civic affairs. “I’ve known Dick for over 30 years. It’s not a big leap for me when I can have confidence that these are the numbers that are necessary, when someone with Dick’s credibility talks about a very simple equation here: fare hikes and service cuts or more revenue.”

To help the authority close a projected $3.4 billion deficit through next year and avoid sharp service cutbacks and a 23 percent increase in fare revenues, the Ravitch commission proposed a long-term solution: a payroll tax, coupled with charging the same tolls on the East River bridges as drivers pay at the authority’s major crossings, like the Robert F. Kennedy (formerly Triborough) Bridge. Tolls on the Harlem River bridges would match the subway fare.

The tolls would take at least 18 months to implement. Meanwhile, any fare increases and reductions in service would be much smaller than those that the authority initially proposed.

At Mr. Ravitch’s urging, the governor issued a statement last week urging legislators to reach agreement this week and warning that “the fare increases and service cuts that will happen without this legislation will do further damage to our fragile economy.”

On Friday, Mr. Sheekey, the deputy mayor, credited Mr. Ravitch and Mr. Silver for advancing the proposal this far.

Mr. Silver expressed doubt that the proposal would have survived even this long without Mr. Ravitch’s lobbying. “I don’t believe so, not from my perspective,” he said.

For his part, Mr. Ravitch was self-effacing. “It isn’t about me,” he said, listing others who have supported the commission’s recommendations. “If it were just me, it wouldn’t make one whit of difference.”

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March 3, 2009Slapping $2 fee on East and Harlem River bridges would hurt working class, say foesby Meredith KolodnerMore than 20 state legislators from the city have signed a letter opposing a plan to stave off doomsday transit cuts by imposing $2 tolls on the East and Harlem River bridges.The lawmakers plan to deliver the letter Monday to Assembly Speaker Sheldon Silver (D-Manhattan), who is pushing for bridge tolls to prevent massive fare hikes or service cuts.

Also elected city officials want hearings and a public debate over alternate plans, including increases on vehicle registration fees and reinstating the commuter tax.

“This plan will tend to hurt working-class families,” said Assemblyman Adriano Espaillat (D-Washington Heights). “It’s not a shared sacrifice.”

Espaillat said he favors a plan put forward by City Controller William Thompson that would charge drivers more to register their vehicles, depending on the size of the car.

A small car would average about $100 more a year, for example, while big SUVs, such as Lincoln Navigators, would run about $430 extra.

Thompson says his plan would raise $1 billion of a reported $1.2 billion Metropolitan Transportation Authority budget gap and would avoid hefty startup costs to impose the tolls.

Silver is not backing down from his plan, which he says is a compromise from an original proposal to impose tolls of $5.

He argues modest bridge tolls are the best way to prevent the fare hike and severe service cuts.

Some transit advocates are backing the tolls.

“Millions of transit riders pay $2 each weekday to get into Manhattan. Why shouldn’t motorists?” said Gene Russianoff of the Straphangers Campaign.

The coalition of legislators argues that the toll plan would not evenly spread the cost of meeting the transit shortfall.

They argue it is unfair to residents of neighborhoods where mass transit options are limited.

“Why should people pay for a system that’s not available to them?” said Assembly member Rory Lancman (D-Queens). “I can assure you no one drives into Manhattan for the fun of it.”

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February 26, 2009By Glenn Blain and Pete DonohueState Assembly Speaker Sheldon Silver Wednesday night proposed putting tolls on the East River bridges equal to the price of a subway ride, currently $2.Silver pitched the proposal to his Assembly colleagues gathered to discuss the Metropolitan Transportation Authority’s fiscal crisis.A bailout plan drafted by former MTA Chairman Richard Ravitch recommends East River tolls matching those at MTA crossings like the Robert F. Kennedy Bridge. Drivers with E-ZPass pay $4.15 to cross that span.Assemblyman Richard Brodsky billed Silver’s proposal as progress in the bid to avoid huge fare hikes and severe service cuts the MTA says will be necessary later this year without a massive bailout.”It was attractive to people who had problems with the other proposal, but there were a great variety of opinions,” Brodsky (D-Westchester) said of the lower-priced tolling concept. “We are in the process of building consensus. That doesn’t happen in one meeting.”Assemblyman Michael Gianaris (D-Queens) didn’t reject the Silver proposal but wasn’t completely sold, either.”Honestly, I’m still evaluating it,” Gianaris said. “This idea is certainly better than the Ravitch plan, but I remain very apprehensive about any tolls on the East River crossings.”Tolls disproportionately affect the people of Queens, Brooklyn and the Bronx, Gianaris said.

Proponents dispute that argument, saying any successful bailout would include higher contributions from many others, like bus and subway riders in the form of modest fare hikes.

Faced with a $1.2 billion operating budget deficit and no money for its next capital construction program, the MTA in December adopted a “draconian” budget.

It includes hikes raising fare and toll revenues by 23% – potentially resulting in a $103 price tag for a monthly MetroCard now costing $81.

The doomsday budget also would eliminate 21 local bus routes, shut down the W and Z subway lines and close a handful of lower Manhattan subway stations during the overnight shift.

Senate Democrats also met to discuss the Ravitch plan and the plight facing more than 8million daily subway, bus and commuter train riders.

No matter what the cost, some said they wouldn’t support East River bridge tolls, making it difficult for approval. Democrats hold a 32-to-30 majority in the Senate. No Republicans have expressed support for tolls.
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February 24, 2009

As Revenue Falls, M.T.A.’s Deficit Could Rise by $650 Million

By William Neuman

Plummeting tax and fare revenues that have been depressed further by the ailing economy could increase the Metropolitan Transportation Authority’s budget deficit this year by $650 million, according to a new estimate made public on Monday. If the doomsday forecast is borne out, the authority’s deficit this year could grow to nearly $2 billion.

The authority has already proposed a steep increase in fares and deep service cuts if it does not get a state bailout. But if its finances worsen significantly, it could be forced to take even more drastic measures.

Read the entire article: Deficit

February 20, 2009

M.T.A. Plan for Revenue Draws Host of Critics
by Ken Belson

An array of city, state and federal elected officials sharply criticized the proposals to bail out the Metropolitan Transportation Authority at a legislative hearing on Thursday, raising fresh concerns about whether the proposals can survive in Albany.

City Council members opposed a plan to introduce tolls on the East and Harlem Rivers. Representative Anthony D. Weiner and business groups said they were against introducing a new payroll tax. And state senators, as well as many advocacy groups, disagreed with the proposal for an 8 percent fare increase.

The proposals are a rescue plan for the authority that was proposed by a state commission created by the governor and headed by Richard Ravitch, a former authority chairman.

(read the entire article here: MTA Plan)

January 13, 2009

Building Congress Endorses
Ravitch Commission Report on MTA Financing

The New York Building Congress has consistently and strongly advocated the need to find new revenue sources to fund the Metropolitan Transportation Authority’s proposed five-year, $30 billion capital plan. The need has gained even greater urgency of late given the defeat of congestion pricing followed by a global economic downturn.

Testimony of Richard T. Anderson, President New York Building Congress December 16, 2008.

Read the complete Public Hearing Testimony: Testimony

December 22, 2008

Are You Ready for the $3 Subway Ride?

By William Neuman

The base subway and bus fare could go as high as $3 next year as part of a proposed fare and toll increase meant to bridge the Metropolitan Transportation Authority’s gaping budget deficit.

The authority on Monday released a list of the maximum possible fare and toll increases when it posted a notice with the dates of eight public hearings on the proposal.

The notice said that a monthly unlimited ride MetroCard could go as high as $105, while some fares on Metro-North Railroad and the Long Island Rail Road could increase by up to a third. Tolls could go as high as $7.

But riders and drivers should be cautious when reading the notice.

It gives the maximum level to which fares and tolls can rise. But it may be misleading.

The authority will issue a more detailed set of proposals next week that in many cases will show smaller increases.

The authority said that it builds some leeway into the maximum increases in the notice so that it can modify its proposals if it chooses, raising or lowering different types of fares. It is not allowed to raise fares by more than what it says in the notice.

The authority faces a budget deficit of $1.2 billion next year and is seeking to increase the overall revenue it receives from fares and tolls by 23 percent.

A state commission has proposed a rescue plan that, if it is approved, could reduce the size of the increase.

The hearings, which begin Jan. 14 in Manhattan, will also cover some of the service cuts the authority has proposed to help bridge the budget gap.

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December 18, 2008

GET YOUR SHOVELS READY, NEW YORK

By ED OTT & KATHRYN WYLDE

December 17, 2008 —

IMMEDIATELY upon taking office, President Barack Obama will launch a massive effort to revive the economy – centered on $500 billion in new funding for modernization and construction of roads, bridges, airports, schools and infrastructure. By the end of January, states and localities need to identify “shovel ready” projects in order to compete for the funds.

When President Franklin Roosevelt undertook a similar program in 1933, New York won the lion’s share of money. That was because Robert Moses, the legendary “construction czar,” made sure the state was first in line with ready-to-go projects. He established a partnership with the construction industry, organized labor and financial institutions to get big projects going on a handshake. Many of our best public facilities are products of that era’s public-private partnerships.

Now we must duplicate that achievement with the Obama stimulus program.

We proved we could do it after 9/11: Emergency powers were invoked to clean up the World Trade Center site and get Lower Manhattan back in business in record time. Industry, labor and government all contributed to an accelerated recovery.

And today we face worse damage, in economic terms, than the terrorists inflicted on 9/11. Our state and city are broke – the state deficit is projected to reach $51 billion in four years. Finding places to cut costs is crucial – but that alone won’t be enough: We have to stimulate the economy and create jobs.

Obama’s program presents a great opportunity – we must win as much federal investment as possible and put the money to work quickly. Can New York rise to the occasion?

Gov. Paterson is certainly trying. With the same foresight he demonstrated in tackling the budget crisis before others woke up to the problem, the governor established a commission in October to determine how New York can tap the expertise and resources of business and labor to help government finance, engineer, manage and build public-works projects on an accelerated, cost-effective basis. The Commission on State Asset Maximization will issue its first report this week and, based on hearings it held across the state, the outlook is promising.

The commission has been asking hard questions about how the state’s cumbersome procedures for procurement, contracting and financing can be reformed to reduce costs and shift risk from government to private-sector experts. The long delays and cost overruns plaguing the Second Avenue Subway are just one example of how poorly positioned we are to make use of a quick start stimulus program.

The commission also found that New York is not in a strong competitive position for pending federal dollars. For example, we recently lost $350 million in federal grants (the funds were reallocated to Chicago and Los Angeles) because we couldn’t resolve our local differences over a traffic congestion-pricing plan.

A strong follow-up on the commission’s work could ensure that New York gets a healthy share of the Obama stimulus dollars. By including strong labor standards and protections, it removes the stigma that public-private partnerships are simply vehicles for privatization that result in lower wages and benefits.

A perfect storm of events is making the prospect of public-private partnerships look like a smart component of New York’s economic-growth strategy. Fortunately, storms of this magnitude don’t come around too often. But then again, neither do these types of opportunities. Like Robert Moses, we need to be ready, and we need to be bold.

Ed Ott is executive director of the New York City Central Labor Council, which represents more than 1.3 million workers throughout the city. Kathryn Wylde is president and CEO of the Partnership for New York City, the city’s leading business group.

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December 4, 2008

GOVERNOR PATERSON ACCEPTS FINAL REPORT FROM THE COMMISSION ON METROPOLITAN TRANSPORTATION AUTHORITY FINANCING Says Recommendations Reflect Sound Public Policy and a Viable Proposal for Maintaining Region’s Transit System Asks Counsel to Draft Implementing Legislation

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Governor David A. Paterson today accepted the final report of the Ravitch Commission on Metropolitan Transportation Authority (MTA) Financing. The report provides recommendations on how to fund the MTA’s long-term capital plan and how to close its operating budget deficits without resorting to double-digit fare increases or drastic service cuts. The Commission report was presented to Governor Paterson by Commission Chairman Richard Ravitch. View the report The report identifies two new revenue sources for the MTA: a one-third of 1 percent Mobility Tax to be levied on employer payrolls in the MTA Commuter District, and cashless tolling of the currently free bridge crossings into Manhattan. The Mobility Tax would raise $1.5 billion annually to cover debt service on a new MTA capital program, and the bridge tolls would raise approximately $600 million annually for mass transit. The Commission also recommends the creation of a Regional Bus Authority as a subsidiary of the MTA. The Regional Bus Authority would expand and rationalize bus service throughout the region, as well as launch Bus Rapid Transit routes through areas currently underserved by mass transit. The Commission also suggests that the MTA take steps to ensure that the development of its next capital plan is more transparent and that the Authority institute better management of capital construction projects.Read the entire press release: MTA

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Joined by City and State legislators, New York City Comptroller William C. Thompson, Jr. expressed his opposition to tolls on the East and Harlem River bridges and promoted his proposal for a weight-based automobile fee as a more equitable revenue stream.

Thompson renewed his call in the wake of Thursday’s report by the Commission on Metropolitan Transportation Authority Financing calling for measures to address shrinking revenue at the MTA. Plans calls for new tolls, a payroll tax, cuts in subway, bus and commuter rail service, and a potential fare hike.

Read the entire release: Tolls

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December 12, 2005

Panel unveils MTA bailout plan, financed by payroll taxes, toll hike and 8% fare increase

by Pete Donohue

Hang onto your seats, straphangers – you’re in for a bumpy ride.

A $2.5 billion bailout plan for the subway, bus and commuter train network arrived at the station Thursday – towing a slew of unanswered questions.

Hurdles to overcome in order to spare riders a 23% fare hike and severe service cuts include:

- How would the MTA get ownership of the city-owned East River and Harlem River bridges?

- Does the state Legislature need to authorize new tolls?

- Will lawmakers impose a payroll tax to fund the system?

“This is open to negotiation,” Gov. Paterson said. “We’re going to need both houses of the Legislature to cooperate with us … these are tough times, and difficult choices will have to be made.”

Insiders say Mayor Bloomberg likes the plan but won’t take the lead in promoting it because he still feels burned by the Assembly’s refusal to vote on his congestion pricing plan.

“I’m pleased to say today the Ravitch commission is offering them more information and options, but it’s really up to them to come up with solutions,” Bloomberg said.

A City Hall source said state legislation would be needed for bridges to be transfered to the MTA and tolled.

No one expects the package, or a version of it, to be adopted before next year, almost certainly forcing the MTA board to adopt a doomsday 2009 budget Dec. 17. It’s required by law to have a balanced budget by Jan. 1.

That budget envisions 23% fare and toll hikes in July and a severe series of cutbacks in bus and subway service starting in the spring. The $2 base subway/bus fare could rise by 50 cents or even $1.

The operating budget has a $1.2 billion gap. The capital plan starting in 2010 is unfunded.

Former MTA Chairman Richard Ravitch, who led the state commission that crafted the bailout plan, sounded cautiously optimistic. “My hope and expectation is that the governor and the legislature will resolve this in the month of January and these increases won’t be necessary,” Ravitch said, “but there will be a period of time where there will be, unfortunately, a hell of a lot of uncertainty for straphangers.”

Ravitch and Paterson both billed the recommendations as a massive stimulus package that would pump billions of dollars annually into the state’s staggering economy.

The payroll tax alone would generate $1.5 billion a year, which could be used to fund the MTA’s next five-year capital construction plan totaling $25 billion to $30 billion, officials said.

Assembly Speaker Sheldon Silver (D-Manhattan) promised a speedy review of the Ravitch plan to “prevent the consequences” of the doomsday budget.

Many of the recommendations in the package require state approval.

Some experts believe the city could sell or transfer ownership of its bridges to the MTA, which could impose tolls without Albany‘s okay. Paterson said the issues were being researched, but his staff would start preparing some pieces of legislation.

Several City Council members voiced objection to tolling the East River bridges.

“It’s been floated every time there’s a financial crisis for the last 100 years,” said Councilman John Liu (D-Queens), chairman of the Transportation Committee. “I don’t think they could do it. I don’t think even a bunch of kamikaze state legislators could do it.”

Others raised objections to ceding control of city bridges, but Ravitch said it would mean tremendous savings.

Noting that the city would be shedding upkeep costs, Ravitch said: “Nobody’s asking the city to give something up for nothing.”