New York State Withholding a Fortune in Transit Taxes From MTA

How many ways can New York state raid the MTA piggy bank? Here's one to keep an eye on.

As the state budget deadlock drags on into its third month, Albany is withholding hundreds of millions of dollars in dedicated transit tax revenue from the MTA. 

The state, which collects transit taxes before distributing the revenue to the MTA, has yet to deliver a quarterly payment originally scheduled for May 10. According to an article published earlier this week in the Bond Buyer (it's behind a very steep pay wall), $275 million in tax revenue that's ostensibly dedicated to transit is being withheld.

While the state says it will deliver the funds when a budget is finally passed, the MTA could be forced to take on additional debt in the meantime. That means subway and bus riders will effectively be helping to pick up the tab for the state's budget mess. It also means transit advocates should keep their attention fixed on Albany to see whether the state eventually replenishes the full $275 million, or steals the dedicated MTA funds like it did in December.

The MTA is not the only public agency feeling the pinch. To keep from going broke, the state has also withheld payments to school districts and threatened to shut down state parks. But the state's latest MTA money drain has so far escaped public scrutiny, in what might become another case of Albany avoiding any political consequence for making transit riders worse off.

"In the political economy of scapegoating, the MTA is at the top of the charts," said one insider who's watched electeds perfect the art of blaming the MTA for budget woes inflicted by Albany.

Perhaps the only person in a position to shift that dynamic is Andrew Cuomo, who notes on page 100 of his "New NY Agenda" [PDF] that the MTA is "teetering on the edge of financial collapse." That leaves one huge unanswered question for the prohibitive favorite in the governor's race: What are you gonna do about it?