Written by Carol Frank Friday, 11 March 2011 00:00
The dramatic announcement last week that the unresolved conflict between the Metropolitan Transit Authority and Nassau County over the funding of the Long Island Bus system will lead to the elimination of the Great Neck bus routes entirely, along with 23 other routes, and cutbacks in service for routes all over the county was greeted with disbelief and anger. Thousands of riders would be affected.
Nassau County Executive Edward Mangano has stated that the county is broke and can not pay the MTA more than the $9.1 million it contributes annually. Nassau County owns the buses, but the MTA funds the maintenance and operating costs. Mr. Mangano says that he is looking into privatizing the entire bus system. A public hearing is set for Wednesday, March 23 at Hofstra University starting at 3 p.m. (See sidebar for details)
Julia Shields, a tenants’ rights activist, said, “I know people who will have no affordable alternative to get to work if the service is eliminated...this would hit people, who are already struggling, the hardest.”
North Shore-LIJ Health System Senior Vice-President of Strategic Planning Jeffrey Kraut told the Record, “We are calculating the impact on the hospital if these lines are eliminated or have reduced service, so we don’t have quantifiable information right now, but we are very concerned about how this will affect patients who come to the ambulatory treatment centers and our employees who get to work on the buses.” The N25 is a north-south route that serves North Shore Hospital, but it is scheduled to have its weekend route eliminated.
County Legislator Judi Bosworth said, “Every route reduced has a correlating impact on the AbleRide program. The inability of people to get to life-saving therapies will have long-term, unintended consequences and negative economic impacts on the county.”
According to MTA spokesperson, Kevin Ortiz, the decision to keep the most profitable bus routes and eliminate or curtail the least profitable, is one that the MTA would rather not implement, but he says, “Nassau County is the only bus system that we (the MTA) subsidize to such an extent.” He added that the MTA has taken measures to trim their expenses. The budget document states, “Plans include additional consolidations, better management of IT systems and reduced costs for inventory purchases. Savings projected for 2011 are $75 million.”
Great Neck’s route 57, which only operates during the week currently, has an average daily ridership of 353 people. Route 58 has a weekday ridership on average amounting to 1,170 commuters. On Saturdays, an average of 470 people ride the bus and on Sunday, an average of 398 people take that bus. Eliminating the N57 would save the MTA $177,000 annually. Eliminating the N58 would save them $465,000.
What the MTA Takes In...
In order to grasp the complexities of the MTA budget, the Record took a look at the revenue sources. According to the MTA’s 2011 adopted budget, all of which is reported in millions of dollars, the total income for the MTA is $12,252 million. Of that total, 33 percent is derived from dedicated taxes. These are four special tax categories that are dedicated to the MTA. The MTA budget does not indicate exactly what each dedicated tax category contributes. Rather, it lumps them together. The total dedicated taxes line comes to $4,283 million.
Dedicated taxes include the Metropolitan Mass Transportation Operating Assistance Fund (MMTOA) which comes from New York City and the seven surrounding counties. It is made up of a 3/8 percent sales tax, a corporate franchise tax on certain transportation and transmission companies, a surcharge on certain business taxes, and a regional addition to the statewide petroleum business tax.
Then there is the Mass Transportation Trust Fund (MTTF). This fund is made up of money streams coming from petroleum business taxes, motor fuel excise taxes, motor vehicle registration fees and various drivers license fees. Not all of this fund goes to the MTA. The legislature divides up the money among various agencies involved in transportation.
Next is the Mortgage Recording Tax (MRT). According to a Citizens Budget Commission report in 2006 on how the MTA might be able to balance its budget, the MRT is “actually two taxes. The first, designated MRT-1, is a tax of .30 percent on debt secured by certain mortgages on property in the MTA service region, a rate that was increased from .25 percent on June 1, 2005. The second, MRT-2, is a tax of .25 percent on another type of mortgage, those for improvements of residential structures with one to six units. Both taxes are collected by New York City or one of the seven counties within the MTA service region, and transferred to the MTA. In the case of the MRT-2, the MTA is obliged to return a portion of the tax to each of the suburban counties. The amount is based on a formula which accounts for the county’s share of the revenue generated and the growth in that revenue since 1989. In 2005 the budgeted net proceeds of the MRT for the MTA were $725.5 million.”
Finally, the controversial MTA payroll tax, (MCTMT) passed by the legislature in 2009, adds substantially to the MTA coffers. The government of Nassau County paid $2.9 million into the MTA Mobility Tax in 2011. This number does not include the MTA Mobility Tax paid by Nassau Community College. We asked the New York State Department of Taxation and Finance, if they could provide the total amount of money paid into the MTA Mobility tax by the residents of Nassau County in 2011. They do not break down the total amount collected on a county by county basis; however, the total amount collected in 2011 for the MTA was over $1 billion.
Farebox revenues will amount to 41 percent of the total income for the MTA, $4,980 million. Toll revenue, the only agency in the budget that does not operate with a deficit, is 12 percent of the MTA income, $1,530 million. State and local subsidies are 8 percent of the revenue. New York State was contributing $8 million to the Long Island Bus, but has reduced that number to $3 million. There is a category, “other revenue” which is 4 percent of the total.
Where does all that money go?
What the MTA Pays Out...
The following numbers are taken from the adopted 2011 budget. The bulk of the money, 53 percent, pays to fund the New York City subway system and the Staten Island Railway at a cost of $6,337 million. The next largest category is debt service, 17 percent, $2,043 million. The Long Island Rail Road weighs in at 10 percent, $1,178 million. The Metro North Railway costs $988 million, 8 percent of the budget. The MTA Bus Company costs $515 million, 4 percent of the budget. The bridges and tunnels category costs $399 million to run, 3 percent of budget. The administrative headquarters and the arm of the MTA which self-insures, the First Mutual Transportation Assurance Co., is also 3 percent of the budget, at a cost of $340 million. And how much of the pie is taken up by the entire Long Island Bus system? Less than one percent. It costs $134 million to run the Long Island Bus system.
And, it should be noted, the MTA has $100 million in a reserve fund which is also less than 1 percent of their total budget.
Assemblywoman Michelle Schimel told the Record, “I’m not going to comment now because I don’t know Nassau County’s side of the story, but what I would say to the MTA and the County is: Sit down and work this out together!”
State Senator Jack Martins has a scheduled meeting with MTA chairman Jay Walder and the acting president of the Long Island Bus system. Senator Martins told the Record, “I hope to learn how they arrived at this decision....There is a symbiotic relationship between the buses and the LIRR. Cutting the bus service will negatively affect the railroad. Many of the communities being hit by this do not have any way to come up with reasonable alternatives.”
Nassau County Comptroller George Maragos’s study of the alternatives recommended:
“Our conclusion is that the best option for the County is to negotiate with the MTA to continue with the current service. The MTA should first decrease the LIBS operating expense by about 4 percent, so that no increase in subsidies is required for 2011 by either the MTA or the county. If an increase is necessary, then both the county and the MTA should proportionately increase their subsidies in order to keep LIBS running. However, if negotiations fail and the county is forced to contribute the full subsidy demanded by the MTA of over $36.1 million for 2011, then we recommend that privatization be pursued.”
Eric Sumberg, press secretary from the Office of the New York State Comptroller, emailed the Record, “Comptroller DiNapoli knows that Long Island Bus service is an important economic tool and a very valuable service. The Comptroller believes every possible solution should be explored to keep the buses running.”