May 5, 2009
Gov. David Paterson, Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith finally (and mercifully, as far as the press corps is concerned) brought an end to the stalemate on saving with MTA, announcing a three-way agreement on a bailout plan for the cash-strapped authority.
The shorthand: The agreed-on deal is more or less what the Senate Democrats proposed in March with a slightly higher fare increase - 10 percent instead of 8 - and funding for a two-year capital plan. The tax revenue will be used for capital. The fare revenue will be used for operating expenses.
"We have preserved our investment in the future of mass transit in the entire region; we have rescused this system from the brink of abyss," declared a very happy Silver, who was particularly pleased that his call for a plan that included at least some capital funding was heeded.
The total revenue package comes to $2.26 billion a year through a payroll tax, a fare hike higher than the Ravitch plan proposed and the package of fee increases included in the Senate Democrats' second MTA proposal.
Schools will be reimbursed to the tune of $60 million; that money will be included in next year's budget, Paterson said.
Some details:
- $1.5 billion will be generated by a payroll tax in the 12-county MTA service area - not graduated, which means the three counties that were supposed to pay less, Putnam, Orange and Dutchess, will now be paying .34 percent/$100 just like everyone else.
Of that, $400 million will be used to pay off the debt service on a $6.5 billion annual capital plan through 2011. Paterson said he, Silver and Smith are "committed" to doing a "statewide road and bridge plan" later in the year.
Asked where the money for that would come from - not to mention to pay for long-term MTA capital projects - Paterson replied: "If we knew how we were paying for it, we'd be standing here telling you that right now."
- $261 million will be generated through fees (registration, car rental, license) and a 50-cent taxi drop-off.
- $500 million will be generated by the fare hikes, which will go up as follows: 10 percent now, 7.5 percent in 2011, 7.5 percent in 2013.
There is still no bill copy, but the governor and the leaders insisted that there will be language in time for lawmakers to pass this deal tomorrow. Paterson will be issuing a message of necessity to bypass the required three-day bill aging process.
"This is one time where the term 'message of necessity' couldn't be more accurate," Paterson said.
Paterson, Silver and Smith all praised Richard Ravitch for coming up with the blueprint for saving the MTA yet again. Reached on his cell phone by my DN colleague Bill Hammond, Ravitch, who was having dinner with his wife, said:
"I am disappointed that they didn’t fund the five year plan. I'm disappointed they didn't do the tolls. But I’m thrilled they did something...Being a believer in the democratic process, thank God for what they did, and I look forward to the day they do more for the MTA."
In case you've forgotten, here's what Ravitch had to say about the Senate Democrats' plan when they unveiled it less than two months ago:
"The idea that the Legislature will do six months from now - closer to the next election - that which they won’t do now is to test the creduilty of all of us who have some familiarity with what happens in Albany."
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