M.T.A. Rescue Passes, but Impact Is Questioned
The State Legislature passed a series of new taxes and fees late Wednesday night meant to keep New York’s base subway fare from rising above $2.25 this year. But the hastily drafted bill, approved largely along party lines, raised many questions about how the plan would work and how effective it would be in stabilizing the struggling Metropolitan Transportation Authority.
In the short term, the plan would appear to raise significantly less money this year than in some earlier projections, although legislative staff members said it would be enough to get the authority through the year.
There were also questions about how a 50-cent surcharge on yellow cab rides in New York City would be collected from thousands of taxi drivers and owners.
And in the Senate, Republicans harshly criticized a promise in the bill to have the state reimburse school districts for the cost of a payroll tax, saying there was no guarantee the promise would be kept.
Questions also remained about the authority’s capital spending program, which is only partially financed in the rescue plan.
The vote came five months and two days — an agonizing period of political wrangling and brinksmanship — after a rescue plan for the transit system was proposed by Gov. David A. Paterson and Richard Ravitch, a former authority chairman, who had been appointed by the governor to head a commission on the authority’s finances.
In the end, the bill passed largely along partisan lines, with only Democrats voting for it in both the Assembly and the Senate. Republicans, many of whom objected to the additional taxes, were unanimously opposed. In the Assembly, some Democrats voted no, but in the Senate, all 32 Democrats voted for the bill.
Democrats hold a 32-to-30 majority in the Senate, and much of the delay in forging the rescue plan was due to objections from Democrats there.
It was not until this week that the last Senate holdouts were won over through a compromise on the school reimbursement. Aides to the governor and the Legislature worked overnight Tuesday and throughout the day on Wednesday, racing to finish writing the bill in time for a vote Wednesday night.
The bill included the payroll tax, of 34 cents for every $100 in wages, to be paid by employers in the 12 counties served by the transportation authority. It also included a series of fees on drivers and vehicles, the taxi surcharge, a $25 surcharge on vehicle registrations, a $2 fee on drivers licenses and an additional 5 percent tax on car rentals.
The bill did not set a new subway fare — only the authority can do that — but officials said it would give the authority enough money to prevent a planned fare and toll increase this year of 20 to 30 percent. It would also halt deep service cuts.
Legislative leaders and officials at the authority agreed that the base subway and bus fare would rise to $2.25, from $2. Other fares, commuter rail tickets and tolls would go up about 10 percent.
Together, the new taxes and fees would raise about $1.9 billion a year for the authority. This year, because less than a full year’s revenue would be captured, they would raise $1.1 billion.
But even that is less, by at least $165 million, than estimates that legislative staff members were working with as recently as Tuesday.
Among the reasons: Earlier versions of the plan called for the payroll tax to apply retroactively to wages paid since Jan. 1. But the bill changed that to March 1 for most employers. Schools, on the other hand, will not have to begin paying the tax until Sept. 1.
The bill also postponed the start of collections on the taxi surcharge until January 2010.
It was not clear how the tax would be collected from thousands of taxi owners.
In the debate on the bill on Wednesday, Senate Republicans like Andrew Lanza of Staten Island questioned the promise to reimburse school districts for the payroll tax, since it must be appropriated by the Legislature each year.
“That’s the guarantee?” Mr. Lanza said.