19 days ago the Ravitch Commission issued its complete report to Gov. Patterson with solutions to help fund the MTA this year & beyond with dependable revenue streams. Ever since the report was released, I had promised to offer a complete opinion on it. I apologize for not getting to this or any other news sooner. I have been extremely busy running my businesses & working on a new project. However I want to get things back & running smoothly here.
So I finally had the chance to read the complete report over the weekend. I must say I am disappointed with the report as I expect more considering the time given for it & the panel responsible for coming up with proposals. I also was not thrilled that it took months to lay out some pretty obvious points. This is not the kind of report I was expecting.
I would like to start with the most obvious part which stated:
The Time to Act is Now: There is an urgent need to act now to address the financial health
of the MTA. Barring action, the MTA Board will have no recourse but to impose double
digit fare and toll increases and service cuts effective in early 2009 in order to balance its
books. At the same time action should be taken to put into place a new, fully funded five-
year capital program that can provide for badly needed economic stimulus for the State and
Thanks captain obvious! The next portion focused on the “Regional Mobility Tax” which is a shiny way to disguise what is nothing more than a new corporate tax which will do more harm than good in the long run. I will copy & paste my thoughts on this proposal from an earlier entry:
As far as that is concerned, I feel it is a bad idea. While the proposed amount of 1/3 of 1 percent seems low, I can envision many companies using this as an excuse to layoff workers. If they do not choose to do that, they might just relocate outside of the areas that the MTA serves. The latter scenario could have a good/bad impact depending on what state you are in.
If the state was to implement this payroll tax, other states could use this as an opportunity to encourage businesses to relocate with less overall cost to them. Our economy is in a recession that will probably last for quite awhile so don’t think for one second that companies would not jump at such an offer if it was presented by other states nearby.
Seriously who in their right mind would consider new taxes when our economy is in a steady downturn? Basic economics tell you that doing such a thing is never a good idea & that hasn’t changed. With our economy in such a downturn, we should be encouraging companies to create jobs, not give them a free pass to cut them. As I said the amount on paper sounds low but this would cost a lot more in the long run.
So we basically raise taxes during an economic downturn, CHECK!
Impact real estate prices, CHECK!
Encourage companies to either relocate, layoff employees, create less jobs, or all 3, CHECK!
So to sum it up an idea of a payroll tax is so bad it is starting to make congestion pricing look attractive to me, & we all know how I feel about that!
The next portion focused on the creation of the MTA Capital Finance Authority. This subsidiary would be in control of the funds obtained from the Regional Mobility Tax. The report says “The creation of the CFA will not require new personnel or financial resources.” Even if this is true, I think creating a subsidiary is nothing but further adding to the layers of management of some sort within the agency. They should be able to properly manage funds without the need to create a subsidiary.
The next proposal called for a regular cycle of fair & toll increases. Yes, this is a great idea to win over the lawmakers in Albany & your riding public. I have read or heard different people share the opinion that the NYC Subway is still a great value even if the fares were increased. While the point has some validity to it considering the 24×7 nature of our system, at some point the value will run out compared to the quality of the service we received. I don’t see how a regular cycle of increases would prevent the value from just vanishing altogether.
While the days of the MTA being in good financial standing are a long way off, shouldn’t they factor in a way of rewarding their ridership base. If your financial outlook is positive, why should you even consider a fare or toll increase? Would one really be a necessity or would it just be used to serve the purpose of having a “regular cycle” of increases. When will enough be enough?
The next proposal called for cashless tolling on the East River & Harlem River bridges. While I do not completely support this as the first course of action, it makes more sense than such ideas as a new corporate tax.
Now we move onto yet another common sense recommendation which called for an improvement in bus service throughout the region. I did not need to wait months to hear or read something I have known for years. The MTA should do all it can to improve bus service as if used properly can be a vital part to a thriving transit infrastructure.
The next proposal focuses on strengthening the governance of the MTA itself. I completely agree with the mandate that all MTA Board members should have relevant experience in transportation, business management, finance, management of large capital projects, labor relations or other activities central to the mission of the MTA. I feel this is a common sense approach that should have always been in place since day 1.
An increase in accountability & transparency formed the next proposal in the report. I feel strongly about this as for years the MTA has continued to show a decrease in this area. Anyway that they can show improved performance in these areas is something we can all support.
Overall they would like to see a one time use of the Regional Mobility Tax to help fund the operating budget while keeping fare hikes at 8%.
In the end, I will stand by my stance that this report was a letdown. Maybe I expected too much from the commission.I truly felt as a whole, they could come up with some pretty strong ideas that the majority of people would support. However in the end it was typical band aid or patchwork solutions disguised as long term beneficial revenue streams.
xoxo Transit Blogger