NY State Senate Bill 2023-S4024

Archive: Last Bill Status - In Senate Committee Transportation Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to transportation
Feb 02, 2023	referred to transportation

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2023-S4024 (ACTIVE) - Details

See Assembly Version of this Bill:: A4122
Current Committee:: Senate Transportation
Law Section:: Metropolitan Transportation Authority

2023-S4024 (ACTIVE) - Summary

Relates to spending by the Metropolitan Transportation Authority; requires the MTA to allocate funds received for tax years 2023-2026 in certain amounts for certain purposes; requires the authority to freeze fares, increase service frequency, and implement a fare-free bus program; requires the MTA to use certain excess monies, if available, to pay off outstanding debts.

2023-S4024 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4024

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act in relation to spending by the Metropolitan Transportation
Authority; and requiring the Metropolitan Transportation Authority to
freeze fares, increase service frequency and establish a permanent fare-
free bus program

 
PURPOSE OF BILL:

To bring fiscal stability to the MTA, while establishing universal poli-
cies that create high quality public transit that is accessible to all
New Yorkers.

 
SUMMARY OF PROVISIONS OF BILL:

Section 1 sets the short title to be the "MTA Freeze Fares, Fund
Frequency and Free bus Act," or the MTA "Formula 3" Act.

§2 sets forth the Legislative findings and intent.

§ 3a fills the MTA operating deficit by $600 million in the tax year
2023; $1.19 billion in the tax year 2024; $1.23 billion in the tax year
2025; and $1.622 billion in the tax year 2026.

§3b pays down the deficit without the implementation of fare increases
by allocating $114M, 193M, 313M, and 360M respectively for tax years
2023-2026 and affirms that the MTA will not increase fares with receipt
of this funding for the duration of tax years 2023-2026.

§ 3c adds $350M each year for tax years 2023-2026 to account for return-
ing to only 73% of 2019 ridership totals, and includes reporting
language to ensure accountability to this section.

§ 3d adds $150 million each year for tax years 2023-2026 for union
contract wage increases, and includes reporting language to ensure
accountability to this section.

§ 3e adds $300 million each year for tax years 2023-2026 to run subways
and the 100 most heavily used bus lines at least every six minutes,
every day of the week at least every six minutes at least 17 hours per
day. It includes additional parameters to achieve six minute or better
service and reporting requirements upon receipt of funding

§ 3f establishes $488 million each year for tax years 2023-2026 to
increase bus service across the system by 20%. It adds language clarify-
ing any duplication between 3e and this section must be accounted for,
and related savings must be used to pay off outstanding debts with no
prepayment penalties.

§ 4 creates a fare free bus program, including express buses, phased in
by borough over four years. In year one, $147.8M is is allocated to
establish free buses in the Bronx; in year two, $342.3M is allocated to
establish free buses in Brooklyn; in year two, $575.7M is allocated to
establish free buses in Queens; and $778M is allocated to establish free
buses across all five boroughs in year four. The section includes
reporting requirements upon receipt of funding.
§ 5 adds $500M in 2023 for one-time 'operating money to cover associated
costs with increased train and bus service, such as:  personnel needs,
rolling stock procurement and facility costs.

§ 6 Establishes a qualification that if ridership levels recover beyond
73% of 2019 levels or if MTA workers' contracts are less than 3.5% of
the projected raise, savings must be used to pay off outstanding debt
with no prepayment penalties.

§ 7 Requires that the MTA must only issue bonds with level debt service
requirements from the establishment of the bill on, with the exception
of expansion projects - which still must be approved by the Office of
the State Comptroller.

§8 Sets the effective date.

 
JUSTIFICATION:

The MTA's operating funds are in crisis because:

-Ridership has not recovered to projected levels since the start of the
COVID-19 pandemic

-Federal COVID-19 relief is running out

-The Authority's historically high debt loads

In response, the MTA has proposed a rate hike. This is unacceptable,
especially when New Yorkers are being crushed by inflation. The MTA
Freeze Fares, Fund Frequency & Free Bus Act, or The MTA "Formula 3" Act
would address the fiscal crisis while freezing fares, funding frequent
service and making buses free. These are universal programs which will
benefit low-income New Yorkers and New Yorkers of color disproportion-
ately.

Further justification's for each provision are below.

Freezing fares:

New York City is deep into an affordability crisis whether looking at
rent, utility prices or the rising costs of basic goods due to
inflation. As we lead the state in unemployment at 5.3% - close to
doubling the rate of the next region - many New Yorkers cannot afford a
fare increase.

For the 1.4 million New Yorkers living in poverty (1), a fare hike could
be catastrophic. These New Yorkers already forgo essential activities,
like medical care and job opportunities, because of the high cost of
subway and bus fares (2). And means tested programs have not helped: in
2021, the Community Service Society found that 48% of eligible New York-
ers hadn't applied for the Fair Fares program and 14% didn't know how
to, mostly in the Bronx (3)

Our bill rejects the proposal to increase fares and holds at the current
$2.75 for subways, and will cost an average of $245M/year.

Funding frequency:

New Yorkers are waiting too long for the buses and trains that help us
to access our city. Our bill creates:

6-minute headways (or better) for subways and a 20% increase in service
across the bus system (4). Together, these will cost $778M/year.

A more frequent, reliable transit system will increase ridership (by
about 15%)which will in turn increase safety for all riders (5)(6).

We are also allocating $500M as one-time operating money to cover
personnel needs, rolling stock procurement and facility costs associated
with this increase in service.

Prudent budgeting measures:

The MTA has been budgeting based on McKinsey's midpoint projection of
retaining 80% of pre-pandemic ridership. Given the fact that McKinsey's
previous ridership projection was overly optimistic, prudent budgeting
should account for risk and not repeat the same mistakes. Accordingly,
we are budgeting for McKinsey's low estimate of 73%, which the Office of
State Comptroller estimates will cost an additional $350 million annual-
ly (7).

Meanwhile, unions representing transit workers will be negotiating their
wages this year. The MTA has currently accounted for inflation of 5% in
year one and 2% for the following three years. As the MTA uses pattern
bargaining, the Transit Workers Union (TWU) contract traditionally sets
the bargaining terms across all union labor within the MTA, hence the
terming of this in the bill as union contract wage increases. Comparing
the data for the past 20 years for TWU raises and inflation, we see an
average of 2.75% for the former and 2.0% for the latter. This historical
data shows us it is reasonable to expect TWU will get a raise higher
than inflation. Given this, and our accounting for 3% inflation, we
think it is more realistic to assume at least a 3.5% raise for TWU. The
calculator then derives from the MTA estimating that "each 1 percent
wage increase over the budgeted amount costs $100 million annually."
(8)

(We want to make clear this is not a political stance on what raises
workers deserve, but an accounting for macroeconomic forces which should
inform prudent budgeting for an Authority mired in deficit and debt.)

Reporting requirements:

Effective policy includes implementation oversight. The bill includes
reporting language following funding allocations to ensure the public,
the legislature and oversight agencies keep the Authority accountable to
the stated purposes of funds.

Level debt service requirement:

For too long the MTA has structured its debt in an unhealthy manner,
issuing debt agreements with service payments suspended for years on
end. This has ensured that the Authority's finances hide the true cost
of its debt load all while pushing significant fiscal obligations
further down the line To address this, the bill concludes with a
requirement that, moving forward, the MTA must only issue debt that is
serviced through level debt payments.
(1) https://,;ww.nyl.ccminyc/a11-1Dorcughs/inside-city-
hal1/2022/05/06/new-repoIt-examines-state-of-poveftv-innew-vork-city

(2) https://www.cssny.ora/newsientr/mass-transit-economiceQuity -fair-
fares

(3) https://www.cssny.org/news/entry/css-report-mass-transit- costs-
still-a-major-financial-burden-for-low-income

(4) https://ww.ridersalliance.orQ/six-minute-service

(5) https://nic.streetsblou.ora/2022/10/07/
six-minutetransit-headways-wculd-increase-ridership-15-experti

(6)https://www.marc.org/sites/default/files/2022-
04/Transit-Z.ero-Fare-Impact-Analvsis.pdf

(7)https://www.osc.state.nv.us/files/reportsiosdc/pdf /report-9-2023.pdf

(8)ibid

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

The annual cost of this entire package - on average $3.28B per year -
amounts to just 1.5% of the State's current budget of $222B. Funding
could derive from existing sources of revenue or through the implementa-
tion of new taxes.

 
EFFECTIVE DATE:
Immediately.

2023-S4024 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4024
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 2, 2023
                                ___________
 
 Introduced  by Sens. GIANARIS, BRISPORT, GONZALEZ, SALAZAR -- read twice
   and ordered printed, and when printed to be committed to the Committee
   on Transportation
 
 AN ACT in  relation  to  spending  by  the  Metropolitan  Transportation
   Authority;  and requiring the Metropolitan Transportation Authority to
   freeze fares, increase service frequency  and  establish  a  permanent
   fare-free bus program
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the  "MTA  Freeze  Fares,  Fund  Frequency and Free Bus Act," or the MTA
 "Formula 3 Act".
   § 2. Legislative findings and intent. The legislature hereby finds and
 declares the importance of  the  New  York  Metropolitan  Transportation
 Authority  (MTA)  and affirms the duty of the legislature to ensure that
 the Authority  operates  effectively.  The  MTA  provides  an  essential
 service:  transporting millions of New Yorkers on billions of trips each
 year to and from their places of work, worship, and gathering. For  many
 New  Yorkers,  however,  the  cost  is  prohibitive  -  particularly  as
 inflation climbs, wages remain stagnant, and the  cost  of  basic  goods
 rises.  At the same time, the MTA faces a fiscal crisis due to ridership
 declines from the COVID-19 pandemic, the exhaustion of federal  COVID-19
 relief,  and  the Authority's historically high debt loads. Accordingly,
 the legislature further finds and declares that it is the state's  obli-
 gation  to  solve  the MTA's budget crisis, while rejecting a fare hike,
 increasing service and making buses free. The state must  intervene  and
 fill  the deficit, while also charting a sustainable future for the MTA.
 Simultaneously, it is the intent of the legislature to enhance  account-
 ability through reporting measures; establish prudent and accurate budg-
 et measures; and improve safety. All of these goals together will aid in
 providing safe, reliable and affordable transit service to riders.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05013-02-3

 S. 4024                             2
 
   § 3. The MTA (the "Authority") shall allocate state funds received for
 the tax years 2023-2026 in the following ways:
   a.  $600,000,000  in the tax year 2023; $1,190,000,000 in the tax year
 2024; $1,230,000,000 in the tax year 2025; and $1,622,000,000 in the tax
 year 2026 to fill their estimated deficit gap.
   b. $114,000,000 in the tax year 2023; $193,000,000  in  the  tax  year
 2024;  $313,000,000  in  the  tax year 2025; and $360,000,000 in the tax
 year 2026 to pay down the deficit without  the  implementation  of  fare
 increases.  The  Authority shall not increase fares with receipt of this
 funding for the duration of tax years 2023-2026.
   c. $350,000,000 each year for tax years 2023-2026 to account  for  73%
 return to ridership based on 2019 ridership totals. Upon receipt of such
 funding,  the Authority shall issue a public report which shall include,
 but not be limited to, ridership numbers and  fare  revenue,  with  fare
 revenue inclusive of all subsidies paid on behalf of riders for discount
 programs.  This report shall be released no later than 60 days after the
 end of each state fiscal year.
   d. $150,000,000 each year for tax years  2023-2026  for  MTA  workers'
 contract  wage  increases.  Upon  receipt of such funding, the Authority
 shall issue a public report which shall include, but not be limited  to,
 comparing  raise percentages to actual salaries, including the effect of
 changes to steps, work rules or any other impactful policy.
   e. $300,000,000 each year for tax years 2023-2026 to run  subways  and
 most buses at least every six minutes, every day of the week.
   (i)  As  soon as practicable and without compromising the availability
 of express subway service or the reliability of subway and bus  service,
 and  upon  receipt  of  such funding, the Authority shall operate subway
 service and bus service on the 100 most  heavily   used   bus   and  all
 subway  lines    at   least every six minutes at least 17 hours per day,
 seven days per week.
   (ii) Until such time as the Authority is  able  to  make  any  capital
 improvements  necessary to operate subway lines and the 100 most heavily
 used city bus lines at least every six minutes  during  off-peak  hours,
 the Authority shall provide on those lines the same frequency of service
 during off-peak, non-overnight hours, as it does during the peak or rush
 hour period.
   (iii)  Existing rush hour service and service on less heavily used bus
 lines shall not be reduced in order to fund additional service  pursuant
 to this subdivision.
   (iv)  Upon receipt of such funding, the Authority shall issue a public
 report which shall include, but not be limited  to,  cost  and  schedule
 projections by line, with target timing for headways broken down by each
 line,  and  if  spending  targets  are  missed,  explanation for missing
 targets.
   f. $488,000,000  each  year  for  tax years 2023-2026 to increase  bus
 service across the system by 20%.
   (i) Upon receipt of such funding, the Authority shall issue  a  public
 report  which  shall  include,  but not be limited to, cost and schedule
 projections by line funded by this increase.
   (ii) The Authority shall conduct a study to identify  routes  included
 in  both   the   fulfillment  of  the six minute headways policy and the
 20% increase across the  bus  system  in  order  to  identify  duplicate
 routes.    It  must  then report on the savings   from  eliminating said
 duplications, and allocate the cost savings of said routes  to  pay  off
 applicable, outstanding debts with no prepayment penalties.
 S. 4024                             3
 
   §  4.  The Authority shall implement a permanent fare-free bus program
 for buses operated by its subsidiary entities commencing no  later  than
 January  1,  2024.  From  January  1,  2024  until December 31, 2024 the
 Authority shall implement an initial phase of the program in  the  Bronx
 including  identified  bus routes with a cumulative operating cost of no
 more than $147,800,000. From January 1, 2025 until December 31, 2025 the
 Authority shall implement a phase of the program in  Brooklyn  including
 identified  bus  routes with a cumulative operating cost of no more than
 $342,300,000. From January 1, 2026 until December 31, 2026 the Authority
 shall implement a phase of the program in  Queens  including  identified
 bus   routes   with   a  cumulative  operating  cost  of  no  more  than
 $575,700,000. From January 1, 2027 until December 31, 2027 the Authority
 shall implement a phase of the program in Manhattan  and  Staten  Island
 including  identified  bus routes with a cumulative operating cost of no
 more than $778,000,000. The Authority shall  promulgate  any  rules  and
 regulations to implement the program.
   Upon  receipt  of  such  funding,  the  Authority shall issue a public
 report which shall include, but not be limited to, ridership,  a  break-
 down  of  operating costs for the program, selected routes, and cost and
 schedule projections by line.
   § 5. $500,000,000 in the tax year 2023 for one-time operating money to
 cover associated costs with increased subway and bus service,  including
 but  not  limited  to,  personnel  needs,  rolling stock procurement and
 facility costs.
   § 6. Should ridership in any tax year from 2023-2026 be  greater  than
 73%  of  2019  ridership totals or should MTA workers' contracts be less
 than the 3.5% of the projected raise accounted for in subdivision  d  of
 section  three  of  this act, the excess monies shall be used to pay off
 applicable, outstanding debts with no prepayment penalties.
   § 7. The Authority shall henceforth be required to  only  issue  bonds
 with  level debt service payments, with exception of expansion projects;
 provided, however, that this exception shall  only  be  granted  if  the
 Authority  puts  forth  a proposal for approval to the state comptroller
 that the project qualifies for an expansion project.
   § 8. This act shall take effect immediately.

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Senate Bill S4024

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Archive: Last Bill Status - In Senate Committee Transportation Committee

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co-Sponsors

2023-S4024 (ACTIVE) - Details

2023-S4024 (ACTIVE) - Summary

2023-S4024 (ACTIVE) - Sponsor Memo

2023-S4024 (ACTIVE) - Bill Text download pdf

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Sponsored By

Archive: Last Bill Status - In Senate Committee Transportation Committee

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co-Sponsors

2023-S4024 (ACTIVE) - Details

2023-S4024 (ACTIVE) - Summary

2023-S4024 (ACTIVE) - Sponsor Memo

2023-S4024 (ACTIVE) - Bill Text download pdf

Comments