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Posts from the "Dean Skelos" Category

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Joke of the Day: Dean Skelos “Concerned” About MTA Debt

In a letter to MTA Chair Joe Lhota, State Senate Majority Leader Dean Skelos writes that he’s withholding approval for $770 million in MTA capital funding and a hike in the agency’s borrowing limit because “a staggering $42 billion bonding debt level is of great concern.” (Hat tip to Dana Rubinstein at Capital New York.)

Dean Skelos celebrates the elimination of $320 million in dedicated transit funding with Governor Andrew Cuomo last year. Will New Yorkers see a repeat of this scene after Albany hashes out a budget deal this weekend? Photo: Governor's office

So Skelos says he’s worried about MTA debt. This is rich, because Skelos is basically obstructing the MTA from addressing a situation that he, as much as anyone, helped create. Let’s rewind a bit…

After Skelos was appointed to one of four slots on the MTA Capital Program Review Board in 1998, he approved hugely expensive MTA expansion projects, include the multi-billion dollar East Side Access, which mainly benefits Skelos’s Nassau constituents by linking LIRR service directly to Grand Central.

Debt service to pay for the capital plans that Skelos approved now consumes a big chunk of the MTA budget. Skelos could have helped the agency secure new revenue to offset its mounting debt load, especially in 2009, when Republicans were in the minority in the State Senate. At the time, a handful of GOP votes could have put support for bridge tolls over the top, overcoming the four obstructionist Democrats who wouldn’t join the rest of their party and back Richard Ravitch’s MTA funding plan. Not a single Republican broke ranks, and bridge tolls failed.

Skelos also spent 2011 trying to undo the major transit funding breakthrough of the Ravitch Commission — the MTA payroll mobility tax. He succeeded, reaching a deal with Governor Andrew Cuomo and Assembly Speaker Sheldon Silver to lop off $320 million a year from the payroll tax — a big hit to dedicated transit funding. In the end, straphangers will almost certainly end up paying the price.

Now Skelos says he won’t approve $770 million in state funds for the MTA capital program, and he won’t sign off on a higher MTA bond cap to let the agency can pay for the projects that he approved. If Skelos was really concerned about MTA debt, he could hold out for a sustainable revenue stream, like congestion pricing or bridge tolls. But that’s not what this fight is about.

In all likelihood Skelos and the Senate GOP are holding out for upstate road funding. Syracuse Republican John DeFrancisco said as much earlier this week. (Skelos also held out for road funding before approving the MTA capital programs in the aughts.) We won’t know for sure until Albany leaders emerge from behind closed doors to announce their big budget deal — probably while you’re sleeping this weekend.

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Cuomo Deal Will Cut Payroll Tax, Reimburse MTA, Create Infrastructure Fund

The details of Governor Cuomo’s economic plan, which includes both tax reform and a new infrastructure fund, were released today with support from Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos.

One of the MTA’s most important revenue streams is seriously affected by the tax reforms. The payroll mobility tax will be cut by $250 million under the deal, though the MTA will be reimbursed for its losses.

The payroll tax, which generates around $1.5 billion in revenue for transit every year, has been a top target of Senate Republicans from the minute it was proposed in 2009. Under the deal, small businesses — likely those with annual payrolls less than $1.75 million, based on previous reports — will have their MTA tax reduced. The current payroll tax exemption for public schools will also be extended to private and parochial schools.

According to the Daily Politics blog, the reductions were one price of Senate Republican support for the tax package. It does not appear, based on press reports, that previously-discussed plans to reduce the payroll tax in suburban counties made it into the package.

According to the Straphangers Campaign’s Gene Russianoff, that $250 million cut may not affect the MTA at all. For public schools, the exemption currently works like this: They first pay the payroll tax and then file for a refund from the state’s general fund. The MTA gets the money up front despite the exemption. If the proposed reimbursements work like this, transit service will likely remain unharmed by the changes.

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Albany Lacks Leadership on Transit as Time Runs Out on MTA Capital Funding

Andrew Cuomo's staff hasn't spoken to MTA executives about the authority's looming capital funding shortfall, according to MTA chair Jay Walder. Photo: Wikimedia

The MTA is still staring down a $10 billion hole in its capital plan, and the consequences of that deficit continue to roll closer. Unless money is found by the end of the year, transit expansions like the Second Avenue Subway will slow down and important maintenance will be left undone. But despite the approaching deadline, no one in Albany seems willing to step up and even begin to tackle the issue.

Governor Cuomo hasn’t shown much interest in dealing with the MTA’s capital deficit. During a legislative hearing on the transportation budget yesterday, MTA Chairman Jay Walder revealed that while he has met with the governor’s staff, “I have not had conversations as to avenues of funding for the capital program.”

Any new revenue source for the MTA would be a major political fight. If the governor’s office hasn’t even started speaking with the MTA about the issue, movement in the near future seems unlikely.

While the governor seems to be whistling past the graveyard, the State Senate continues to actively fight to take money away from transit. The $1.4 billion payroll mobility tax remains under threat, with Majority Leader Dean Skelos strenuously opposed, a number of Senate Republicans elected on anti-payroll tax platforms and the four breakaway Senate Democrats willing to axe the tax as well.

In a speech at a Crain’s Breakfast Forum two weeks ago, Skelos once again expressed his desire to eliminate the payroll tax, though he now says that the MTA should be “made whole” if that revenue is removed. That’s progress for Skelos, but it’s not enough. Whatever revenue would be used to replace $1.4 billion from the payroll tax is revenue that can’t be used to fund the capital plan. As Walder told the legislature yesterday, “I don’t foresee a plan in any time frame in which you can phase out the payroll tax.”

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Splinter Group of Senate Dems Want MTA Payroll Tax on Chopping Block

The Independent Democratic Conference, shown here, has included reform and possible repeal of the MTA payroll tax in its agenda. Photo: New York State Senate.

The Independent Democratic Conference, shown here, has included possible repeal of the MTA payroll tax in its agenda. Photo: New York State Senate

The fate of the payroll mobility tax, which brings in $1.34 billion a year to the MTA, just grew a little shakier. The four members of the State Senate’s new Independent Democratic Conference, who split off from the minority Democrats last week, have come out with their agenda and included in it is a call to “reform” the tax and even consider eliminating it. Any cut to the mobility tax would spell disaster for transit riders.

When the payroll tax originally passed in 2009, the vote was along strict party lines. Every Democrat voted for it and every Republican against. With the Republicans now in control of the Senate — led by the fiercely anti-payroll tax Dean Skelos — the mobility tax’s future in that chamber already seemed uncertain. But the possible support of the independent Dems could provide a repeal effort with bipartisan cover and some real momentum.

Here’s what the four members wrote in their platform:

MTA Tax Reform: Gross mismanagement is blamed for 1/3 of the MTA’s current fiscal debt. Our goal is to conduct a comprehensive forensic audit of the MTA to find areas of waste and corruption and determine the need and the efficacy of the current MTA tax.

It’s the phrase “determine the need” that’s most threatening, with its suggestion that there may be no need at all. Remember, the transit agency’s capital program — which covers expansions and badly-needed repairs — is a staggering $10 billion short and the agency just went through a painful round of service cuts, fare hikes and layoffs to make its operations budget add up. Even a deal that exempts the suburbs from the payroll tax but not the city would cause some combination of more service cuts, higher fares, and deferred maintenance.

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Suburban State Senate Candidates Campaign Against MTA Payroll Tax

Senate Minority Leader Dean Skelos' top priorities, via his website. The payroll mobility tax could be in real danger if his party retakes the State Senate.

Repealing the MTA payroll tax is one of the top priorities of Senate Minority Leader Dean Skelos, who may be poised to regain control of his chamber. Image via his website.

With the MTA at least $9 billion short on funding for its five-year capital plan, New Yorkers who ride buses and subways should be counting on legislators to secure a new revenue stream for transit. But after tomorrow’s elections, the first transit fight in Albany may not be over new revenue at all. Repealing the payroll mobility tax, passed along strict party lines as part of the 2009 MTA funding package, is a top priority for many suburban State Senate candidates, especially Republicans.

Senate Minority Leader Dean Skelos is a fierce opponent of the payroll tax and could gain control of his chamber if the GOP picks up just two additional seats. Gubernatorial favorite Andrew Cuomo hasn’t had anything good to say about the payroll tax either. That means over $1.1 billion a year in transit funding is potentially on the chopping block.

Perhaps the fiercest fight over the payroll tax is happening in southern Suffolk County, where incumbent Brian X. Foley is defending his seat against Republican Lee Zeldin. Zeldin has made the payroll tax perhaps the number one issue in the campaign, going so far as to call his opponent “Brian ‘MTA Tax’ Foley” in press releases on subjects unconnected to transit or tax policy.

Zeldin has called for eliminating the payroll tax. “Entities paying the tax have been forced to lay off employees, cut payroll and watch their profits shrink,” says Zeldin’s campaign website. “We must also reform the MTA’s pattern of wasteful spending and mismanagement instead of supporting bailouts like the Foley Payroll Tax.”

Foley, in contrast, is pushing a compromise where the payroll tax is reduced by one-third in Nassau and Westchester Counties and by two-thirds in the rest of the MTA service region [PDF]. “Mr. Foley doesn’t like the tax and is working to make it less burdensome to businesses,” his campaign manager told the Wall Street Journal. “It was either that or let them raise fares 35 or 40%, cut service dramatically.”

Foley’s grudging support for the payroll tax is mirrored by a number of incumbent Democratic senators, all of whom voted for the MTA rescue package. In Westchester County, Sen. Suzi Oppenheimer said on a radio show that she “didn’t support it nor do I know anyone who likes this tax.”

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With No Plan for Transit, the Next Fare Hike Is Just Around the Bend

If state legislators don't act to undo the outcome of today's MTA Board meeting, it would mark the second straight year that fares have gone up, which is already a departure from the norm. And it's going to get worse, say Gene Russianoff and the Straphangers Campaign:

Without new financial help from Albany soon, the MTA says its current bad finances may mean another fare hike in 2010.

That would make it three years in a row for fare increases -- March 2008, June 2009 and early 2010 -- the worst record in the MTA's 40-plus year history.

It demonstrates a trend of shifting the costs of operating transit from some beneficiaries of the subways and buses -- such as motorists and businesses -- onto riders.  For example, the riders' share of operating costs for the subways will go from 69% to an astonishing 84%, according to the MTA, if the just-approved fare increases are implemented.

Under the plan proposed by former MTA chairman Richard Ravitch, no new fare hike would occur before 2011.

Meanwhile, the excuses for inaction are pouring in. GOP State Senator Marty Golden, a Brooklyn rep who never broke ranks to support the Ravitch plan, sent around a press release blaming the state's top Democrats for "closing the doors completely to Republicans." Senate Minority Leader Dean Skelos excused his party's monolithic opposition to the transit rescue effort in much the same way, and added that the MTA was asking for a "blank check" by seeking to fund its five-year capital program. As Liz Benjamin notes, that's exactly what the Fare Hike Four and Senate Dems have been saying.

It's a patently false claim. Any plan is subject to oversight and approval by the Capital Program Review Board. The leaders of the State Senate and the Assembly each appoint one voting member to the CPRB, as do the mayor and the governor. Any of the four voting members can veto the whole thing. Said Russianoff: "If they appropriated the money, they would still have power over how it's spent."

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Skelos Ascension Clouds Prospect of Pricing Revival

skelos.jpgYesterday, retiring New York State Senate Majority Leader Joe Bruno handed the reins to Deputy Leader Dean Skelos, Republican from Nassau County. Though some see this unforeseen development as an opportunity to move on much-needed reforms in Albany, it's not great news for advocates of congestion pricing.

If Governor Paterson looks to revive pricing via the Ravitch Commission, as is being reported today, he could very well lose the support of the Senate under Skelos, who, unlike Bruno, is an avowed opponent of the concept.

Skelos voted against the formation of the Traffic Congestion Mitigation Commission in 2007, though Bruno supported the move, which was widely seen as a concession to lawmakers who were skeptical of the city's original proposal. (Even ardent pricing foe Assemblyman Richard Brodsky voted to go ahead with the commission.) As late as April of this year, Skelos had this to say at a "virtual town hall" meeting:

I am ... opposed to congestion pricing and have already voted against it once in the State Senate. It's another form of a commuter tax and will place an unfair burden on middle-class Long Islanders who are already struggling to make ends meet.

Ironically, pricing's chances in the Senate could improve if Democrats assume the majority in the fall. Though he didn't make much noise about it, Minority Leader Malcolm Smith reportedly favored the plan.

The Assembly, of course, is another matter entirely.