Cover story: State lawmakers likely to bail out MTA, kill East River toll plan
Facing deadline next month to pass a rescue package for the MTA, the state legislature will likely kill a proposal to toll East River bridges and go ahead with a payroll tax on businesses.
Revenue from the payroll tax would more than cover the MTAs $1.2 billion budget gap averting the need for a threatened 23 percent fare increase.
Though it faces stiff opposition in suburban communities, the idea enjoys more support in the city, even winning the endorsement of the Greater New York Chamber of Commerce, which represents businesses.
But straphangers shouldnt get too excited even if the MTA's budget gap is closed, fares would still probably rise 8 percent, the fourth hike since 2003.
Both the payroll tax and the tolls were suggested by the governor-appointed Ravitch Commission, which released a report in December recommending ways to shore up the MTAs finances. The senate transportation committee will hold a hearing Wednesday in Brooklyn on the Ravitch report.The toll plan never sat well with many powerful Democrats, and political observers agree its probably a nonstarter.
There are several senators who are not on board and if they're not on board it's not going to happen, said state Sen.Martin Malave Dilan, (D-Brooklyn), chairman of the transportation committee.
Lawmakers have until March 25 to pass a bill that would stave off severe service cuts and the 23 percent increase, which take effect in June if passed.
The payroll tax will happen and the bridge tolls will die of its own weight, predicted City Councilman John Liu (D-Flushing), who chairs the council transportation committee.
If the payroll tax passes, business would pay 33 cents on every $100 in salary.
A spokesman for the MTA, Jeremy Soffin, said the agency wants the Ravitch plan approved as a whole, something executive director Elliot Sander has lobbied lawmakers to do.
The whole package is critical for operating the system, Soffin said.
Money generated by East River tolls would be used to expand rapid bus service in the outer boroughs and surrounding counties, among other things. Lawmakers may seek new revenue sources in addition to the payroll tax, such as charging higher vehicle registration fees for large cars, a plan pushed by city Comptroller William Thompson, who will testify at tomorrows hearing. Some have also suggested bringing back the commuter tax, though that idea is toxic to many suburban legislators.
In the end were going to have to make a choice between unappealing alternatives, said Assemb. Richard Brodsky (D-Westchester).
Heather Haddon contributed to this report