I think most transit riders would laugh — cynically — at the idea that the MTA has more than enough funds to meet its needs. But this is exactly what the MTA’s chairman Tom Prendergast said when he learned that the state would be diverting $30 million from the MTA’s funding stream to balance the state budget.
“Our needs are being met,” Prendergast said, apparently unwilling to speak out against his boss, Governor Cuomo.
Mayor de Blasio was equally sanguine about this raid on MTA funds. “We have to make sure the MTA has the resources they need. But from what I’m hearing at this point, they’re doing well,” de Blasio said.
Is this the same MTA that is regularly described in the press as “cash-strapped,” that made deep service cuts in 2009, leaving hundreds of thousands of New Yorkers with longer waits, more crowded platforms, or no local bus route at all?
When asked about the $30 million diversion, an MTA spokesperson noted that the MTA was actually receiving more state funds this year.
Technically he is correct. The state collects a number of taxes and fees that are then sent into a fund that is “dedicated” for transit. The economy is recovering, more tax revenue is coming in, and as a result the pot of transit-dedicated funds is larger than it has been in recent years.
And it’s true that the $30 million diversion represents a small percentage of the MTA’s $13 billion annual budget. One has to appreciate the amount of public funds that do support transit, either from special taxes or state and local general funds. Last year, $5.1 billion in subsidies helped the MTA run the largest transit system in the nation, which is slightly more than it took in at the farebox.
But there are several reasons why the state’s raid on transit funds is bad policy and is fiscally irresponsible.
First, this year’s raid is not an isolated incident but rather comes on top of $280 million in diversions since 2009. Worse, Cuomo intends to take at least $20 million from the state’s transit fund every year until 2031, adding up to another $350 million.
Second, the tax revenue that the MTA relies on is volatile and subject to the ups and downs of the economy. Tax revenue is up this year, but could just as easily drop in the event of the next recession. The MTA should be able to take advantage of the “good times” to prepare for the next recession.