Thursday, 24 October 2013 00:00
The late Philadelphia retailer John Wanamaker said half the money he spent on advertising was wasted. The trouble is, Wanamaker added, he didn’t know which half.
Yet Wanamaker would have realized the NY 529 College Savings Plan is wasting its advertising dollars on the Metropolitan Transportation Authority’s (MTA) Long Island Rail Road (LIRR). NY 529 purchased billboards on LIRR properties to urge parents to establish a 529 because tuition at public colleges has risen “37 percent over the past 10 years.” That’s it, a regular LIRR rider might ask. No wonder public higher education remains a bargain compared to the cost of mass transit.
A LIRR commuter in western Nassau (zone 4) has seen the monthly LIRR ticket price grow an astonishing 79 percent over the past decade (to $242 from $135), and the percentages are higher farther east. LIRR commuters who take the city’s subway have seen, since 2003, their per-trip base fare increase 67 percent (to $2.50 from $1.50). Since 2007, the MTA has raised commuter rail fares and bridge and tunnel tolls four times, according to a little-noticed report on the Financial Outlook for the Metropolitan Transportation Authority. It was issued last month by state Comptroller Thomas DiNapoli, a former state Assemblyman from Nassau County. The MTA plans to hike its fares and tolls again by 7.5 percent in 2015.
One of the MTA’s single largest revenue sources, however, is its payroll mobility tax (PMT). Enacted by the state Legislature in 2009, the PMT takes anywhere from 11 to 34 cents out of almost every $100 earned in New York’s 12 downstate counties and transfers those monies into the MTA’s coffers. The PMT law also included provisions for levying on the MTA’s behalf higher taxes on rental cars, and fees on city taxi cab rides and motor vehicle registrations.
The MTA’s PMT revenues “are expected to rise from $1.5 billion in 2013 to $1.8 billion in 2017,” the state comptroller’s MTA analysis stated. In other words, an MTA tax that didn’t even exist five years ago will generate $1.5 billion this year alone for the MTA’s $13 billion-plus annual operating budget, of which the LIRR accounts for a little over $1 billion.
State Comptroller DiNapoli’s report correctly identifies the main reason the MTA needed the PMT—the collapse of the downstate real estate market in 2008. The MTA collected $1.6 billion in taxes from the region’s residential and commercial property transactions in 2007, a revenue line that plummeted to less than $400 million in 2009, the comptroller’s analysis noted. The PMT’s imposition plugged the real estate revenue tax gap and, while a Republican-controlled state Senate partially rescinded the PMT in 2011, the PMT nonetheless remains in place even though the real estate market has recovered, with the MTA’s revenue derived from real estate activities now expected to be $852 million in 2013, more than twice what it was four years ago.
But if the MTA is good at raising money, the state agency is great at spending it. The MTA recognized $1.9 billion in “new resources during the financial plan [2014-2017]” it released in July 2013, the comptroller’s report explains, and plans to allocate nearly $1 billion of those proceeds to fund capital projects on a pay-as-you-go basis ($435 million), improve maintenance and services ($441 million), and pay down long-term pension liabilities at the LIRR ($80 million). That left about $900 million on the table. Not to worry, the MTA has already earmarked those funds to offset “unplanned costs and other budgetary needs ($523 million) and to reduce its projected budget gaps ($399 million),” the comptroller’s report added.
“Although these are appropriate uses, none of the resources were used to reduce the size of the [MTA’s] planned fare and toll hikes,” Comptroller DiNapoli’s study stated. LIRR riders have voted with their feet on the MTA’s repeated ticket price hikes, and there’s no way the MTA will postpone its next one in 2015. The recession contributed to the 7.2 percent drop in LIRR ridership between 2008 and 2011, and there was a slight passenger uptick in 2012 (+1 percent) and 2013 (+2 percent is the projection), the report states. Comptroller DiNapoli concludes, however, that LIRR ridership “is not expected to reach the prerecession level during the financial plan period [2014-2017].” The LIRR’s slumping ridership figures also indicate basic economics occasionally applies to the MTA. Long Islanders who have travel options are pursuing them.
Mike Barry, a corporate communications consultant, has worked in government and journalism. Email: MFBARRY@optonline.net