Albany legislators dismiss Hochul’s MTA rescue plan, present their own

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An F train pulls into Smith-9th Street, New York’s favorite subway station, in January 2022.
File Photo by Kevin Duggan

The State Assembly and Senate have released their long-awaited responses to Governor Kathy Hochul’s executive budget, pointedly rejecting her plan to rescue the fiscally-beleaguered Metropolitan Transportation Authority and putting forth their own.

Virtually all the central planks of Hochul’s fiscal lifeboat for the MTA — increasing the payroll mobility tax, shifting the $500 million bill for paratransit and student MetroCards to the city, directing future casino revenue to the authority, and raising fares this year and in 2025 — were cast to the wayside by the State Senate in its one-house budget resolution, after being blasted by virtually every stakeholder except the governor and MTA.

Instead, senators have a whole other laundry list of proposals to raise money in order to prevent the MTA’s hurdling over a “fiscal cliff.” They want to raise the corporate franchise tax (based on a company’s revenue, rather than payroll) and hike transit surcharges on Uber and Lyft rides in Manhattan’s central business district.

Legislators also proposed creating a residential parking permit system in New York City neighborhoods and ending Madison Square Garden’s lucrative property tax exemption — and sending the revenue from both to the MTA.

New York State Senate Majority Leader Andrea Stewart-Cousins.File Photo by Dean Moses

Beyond just keeping the lights on at the transit agency, legislators also proposed an experiment with free bus service in the Big Apple, calling for the MTA to eliminate fares on two bus lines in each borough.

The Assembly’s proposal was largely along the same lines, rejecting increased payroll taxes and cost shifts to the city, calling for a 2% business tax hike and $196 million cash infusion to the MTA to avert the planned 5.5% fare hike, and placing a $50 million value on the fare-free bus pilot. Unlike the Senate though, the Assembly is fine with sending some casino revenue to the MTA instead of schools, and does not mention MSG’s tax break.

Of course, the differences will be hashed out one way or another in Albany’s legendary closed-door budget jockeying over the next two weeks, as Governor Hochul, Assembly Speaker Carl Heastie, and Senate Majority Leader Andrea Stewart-Cousins try to reconcile their proposals. The budget is due April 1, but is often adopted late if disagreements can’t be resolved in time.

Assembly Speaker Carl Heastie in 2019.NYS Assembly

Either way, the spending plans seem to reflect on an increasingly defiant State Legislature willing to flex its muscle to demonstrate independence from the governor, after a decade of executive dominance under disgraced former Governor Andrew Cuomo. The proposal comes a month after the Senate rejected Hochul’s nominee for Chief Judge, Hector LaSalle, the first time legislators had ever done so.

“Governor Hochul’s Executive Budget makes transformative investments to make New York more affordable, more livable and safer, and she looks forward to working with the legislature on a final budget that meets the needs of all New Yorkers,” said Hochul spokesperson John Lindsay.

Hochul put forth her rescue plan in her executive budget last month, after months of fatalistic rhetoric from MTA officials about its fiscal situation. The agency that runs subways, buses, commuter rails, and paratransit has struggled to recover from the COVID-19 pandemic, with the rise of working-from-home causing ridership to stagnate well below pre-pandemic levels, depriving the MTA of critical farebox revenue.

The MTA, required by law to balance its books, approved an austerity budget in December which slashed its projected $2.6 billion deficit down to $600 million through proposed fare hikes and reduced spending, but still required new streams of revenue to fill the remaining hole and prevent service cuts and layoffs. MTA leaders have praised Hochul’s plan and said that if it’s not implemented, they will have to return to the drawing board and pursue more painful fiscal remedies to its deficit.

“We’re grateful the Legislature agrees with Governor Hochul that transit service in this region is essential, and needs to be funded,” said MTA Chair and CEO Janno Lieber in a statement on Tuesday. “The Governor led by putting forward a balanced proposal to fund transit with dedicated, stable and recurring revenue — putting riders first – and we look forward to working with her administration, the Senate and the Assembly toward a final budget that accomplishes those goals.”

New York State Capitol Building.Photo courtesy of NYS Senate Media Services

But virtually everyone else had gripes with the governor’s plan.

Mayor Eric Adams said that it was not fair for the state to foist $500 million in new annual contributions on the city but not ask any other municipalities to contribute more, nor could the city afford it either way. Legislators sided with Hizzoner. The mayor’s office did not respond to a request for comment on Tuesday.

Suburban legislators said that any increase in the payroll mobility tax should be shouldered only by city businesses, arguing the Big Apple realized most of the benefits of the mass transit system. Legislators not only axed any payroll tax increases entirely, but the Senate proposed to exempt local governments in Dutchess, Orange, Putnam, and Rockland counties upstate, even though those counties are served by Metro-North.

Legislators even threw a bone at progressives pushing for fare-free buses, seeking to emulate other cities like Washington DC and Boston, though advocates remain miffed that the one-house budgets do nothing to increase service frequency on the subways.

“The legislature’s budget ignores millions of riders stranded 12, 15, 20 minutes or more on subway platforms and at bus stops,” said Riders Alliance executive director Betsy Plum. “We’re the ones losing pay, missing school and medical appointments, and arriving late to pick up our kids, all because of infrequent, inequitable transit service. By neglecting the long waits that discourage people from riding transit, the proposal also fails in its attempt to fix the MTA.”