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With Clock Ticking, Senate Plan Does Little to End MTA Impasse

by David King, Mar 19, 2009
 

This wasn't supposed to happen. The legislature was not supposed to be rushing to come up with a workable proposal to deal with Metropolitan Transportation Authority's flagging finances just a week before the MTA's self-imposed March 25 deadline for avoiding fare hikes and deep service cuts.

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After all, Gov. David Paterson appointed the Ravitch Commission last June to address the MTA's budget gap and the commission came up with a plan that asked for shared sacrifice from different interest groups who would benefit from a healthy MTA. For months, the governor has been sounding the warning bell about what inaction would mean to straphangers who rely on the MTA for transportation. And Assembly Speaker Sheldon Silver offered a compromise plan that would enact lower tolls on East River bridges than proposed in the Ravitch plan.

But then it came time for the Senate to act, and things stalled, thanks to a majority leader who has found himself handcuffed by a fractured majority.

On Monday, word came that the Senate had a "plan" to stave off the horrors of March 25. When the Senate finally unveiled its proposal on Tuesday, not many transit advocates thought Senate Majority Leader Malcolm Smith had saved the day. Instead, they felt that his plan was undermining the work that had been done to get various players to agree to the sacrifices asked for in the Ravitch plan.

What advocates saw on Tuesday was a plan that had no comprehensive strategy to deal with the MTA's long-term fiscal crisis. The MTA has a $1.2 billion operating deficit that is expected to reach $3 billion by 2012. The Senate proposal does not address the MTA's capital budget that goes toward maintenance and expansion. And it does not contain tolls of any amount on the East River bridges.

What was presented was a quick fix: a 4 percent increase in fares (said to amount to $117 million) and a 25 cent on every dollar payroll tax on businesses in all the counties served by the MTA. That feature would raise $1.16 billion to plug the MTA's operating deficit.

Spreading the Pain

After the Ravitch plan was finally completed, it took work to get business groups to accept the idea of a payroll tax and for transit advocates to swallow the idea that there would be significant fare increases. But those groups got on board to support the entire plan, including the bridge tolls. The Senate plan, though, does not ask drivers who use the East River and Harlem bridges to pitch in by paying a toll, making it harder for the other groups to feel they are part of an equitable solution.

Kathryn Wylde, president and CEO of the Partnership for New York told reporters her organization was able to support the payroll tax included in the Ravitch plan because it was a "broad-based plan with everyone contributing on a fair and rational basis."

When asked by a reporter about the business community's concern that not everyone would have to sacrifice Smith responded, "The business community doesn't vote on the plan. We do." He then went on to note that the Senate plan has a smaller payroll tax than the one proposed in the Ravitch plan.

In response to another reporter's question about whether drivers from Brooklyn and Queens were somehow "special" because they did not have to contribute to the MTA bailout plan, Smith stammered and seemed to reveal the uncertainty of his position. "I don't think it's about special," he said. "They moved to part of the city they had a right to move to and the condition of the move provided them the ability to travel across certain bridges that are not tolled. We shouldn't say to them they have to foot that bill, but at the end of the day maybe they will."

The Senate Plan

Smith said he didn't want to "hand the MTA a blank check," nor did he wish to address the MTA's capital plan until later in the year. "We don't want to have an AIG situation with the MTA," he said.

What Smith does want is a forensic audit, a total review of all of the MTA's finances, conducted by an outside source. He said he will address the MTA's capital plan after such an audit takes place. Smith insists he is reluctant to provide the MTA with funding beyond operating expenses because of the authority's history of financial trouble.

Smith introduced a web site (nymtasolutions.org) that presents the Senate's plan and asks for public input on resolving the MTA's funding crisis.

The majority leader also tied his reluctance to act on the MTA's capital budget to its omission of funds for Long Island and upstate transit infrastructure. Smith said the Senate would make sure such funding was included, adding that the Senate represents, "One New York."

Some observers charge that all of this is posturing by Smith in an attempt to hide the fact that he cannot counter the whims of the gang of three, the Democratic senators from New York City who have been a thorn in the leader's side since Election Day.

The Reaction

The proposal attracted quick and largely negative reviews, with critics attacking the Senate's arithmetic and branding its "rescue package" as shortsighted.

MTA chairman Dale Hemmerdinger told reporters the Senate didn't take the time "to do the math" and that its proposal leaves a gap of at least $1 billion over a two-year period. With the Senate plan, he said, the MTA would have to raise fares by 17 percent.

Paterson was quick to counter, "They were probably just oversights. We don't want to make a big deal of it." Paterson said he would meet with Smith and said that perhaps, "we're just misunderstanding each other."

Paterson, who supports the Ravitch plan, called the Senate's suggestion a failure to achieve a "shared sacrifice." said he thought that senators "might not be able to appreciate" the severity of the MTA's funding shortfalls.

Paterson did turn up his rhetoric by saying that a delay in addressing the MTA's capital plan will result in losing a "generation" of service, as he said happened in the 1970s, when the state did not invest in mass transit infrastructure. "Pushing problems off into the future is going to only accomplish what putting problems off into the future did in the '70s -- which is creating all kinds of hardship."

Mayor Michael Bloomberg, who had remained fairly quiet during this process, came out against the Senate recommendation, telling reporters, "We need a plan that solves the problem, not something that's going to get us to next year."

In a statement, Silver also knocked the shortsightedness of the Senate plan, saying, "I continue to believe that we must act now and that any viable solution must address both the immediate threat of a fare hike and service cuts and the long term needs of our mass transit system.

On the other side, opponents of tolls on East River bridges praised the Senate plan. "Any plan that doesn't have tolling is a much better plan," said Assemblymember Jose Peralta. "It is a good first start."

Peralta said that the 4 percent rate increase proposed by the Senate, "seems decent, something that riders can absorb. The payroll tax could have been higher but we understand that the business community doesn't want to absorb the entire burden on this."

Reaching Consensus

As for how a plan can move forward, Peralta said, "We will be talking further later today. The Senate proposal is now on the table, and we will move forward, but the Senate plan is not the end all. Now it is a matter of sitting down and negotiating."

Advocates hope that a plan more like the Ravitch plan might be achievable in the legislature if Republicans are brought on board — thereby eliminating the need to rely on the gang of three and other anti-toll Democrats.

Wylde said the Senate Majority failed to recognize something that advocates of the plan figured out a while ago: "We need bipartisan support for this plan."

Neysa Pranger of the Regional Plan Association said that she and other advocates have been pushing an agreement involving members of both parties for weeks. "We knew two weeks ago that the way out on this was to get bipartisan support in the Senate," she said.

Paterson said he would be willing to meet with "both leaders of the Senate." A leaders meeting took place Tuesday night, but Republican leaders were not invited.

Republicans would almost certainly want something in return for their participation, and Paterson said this week he would not hand out rewards for support of the MTA bailout.

On Wednesday, Senate Minority Leader Dean Skelos said that he and his members are not looking for mere "pocket change" in exchange for votes on the MTA plan. What Skelos wants is a seat at the table and influence over budget decisions.

For his part, Skelos spent the day railing against the fact that he and Assembly Minority Leader Jim Tedisco have been cut out of budget meetings. Skelos told the Daily News that he would welcome the chance to reach a solution on the MTA, even though, he said, none of the Republican Senators support any of the plans on the table. But he urged the Democrats to "bring us into the discussions and maybe we can find something that we could be supportive of."

"No," said Sen. Kevin Parker curtly and flatly, when asked if he thought there would need to be bipartisan support to get an MTA finance bill passed in the Senate. He then added "We don't need Republican votes but we wouldn't mind them."

With the clock ticking, transit advocates and other observers think the legislature must act now. Most hold out little hope that the legislature would take action sometime in the future to enact some of the unpopular measures in the Ravitch report when they won't act on them now is simply absurd.

Richard Ravitch said, "The idea that the legislature will do six months from now that which they won't do now is to test the credulity of all of us who are familiar with what happens in Albany."


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