Paterson's MTA bailout revises payroll tax

April 30, 2009 6:18:02 PM PDT
State legislative leaders are reviewing Gov. David Paterson's secret plan to bail out New York City's mass transit system, which could include a revised payroll tax to reimburse school districts for their cost. Lawmakers said the many proposals still in play include altering the proposed payroll tax so employers farther from New York City in the 12-county MTA service region pay less than employers who most benefit from subway and bus service.

Another proposal revives the tradition of "bullet aid" for some school districts, which would provide additional aid equal to the cost of the payroll tax on districts.

Both measures could appeal to Democratic senators from Long Island now opposed to the plan. The measures also could attract some votes from Republicans, who already have forced the plan to include borrowing $1.2 billion for their districts upstate and on Long Island for roads and bridge work.

Paterson wouldn't comment on the proposals or his pitch to legislative leaders Thursday.

"I'd like the leaders to get a chance to talk to their members," Paterson said at a New York City news conference. "If it passes muster, we will make sure you know about it soon enough." He said he'd like to announce a deal on Monday.

The Senate's 32-30 majority lacks at least two Democratic votes, and the Republican minority says it remains fully opposed to any of the bailout proposals that would avoid more drastic fair increases and service cuts. The GOP and Democratic Sens. Brian Foley of Suffolk County and Craig Johnson of Nassau County oppose the payroll tax proposal that would help fund the bailout of the MTA.

"It's too onerous," Foley said. "Outer rung communities should be treated different than the inner rung," he said.

"Senator Johnson's opinion remains unchanged," said Johnson spokesman Rich Azzopardki. "Though if the governor and legislative leaders have ideas on how to protect taxpayers, preserve mass transit and hold the MTA accountable, Senator Johnson is all ears."

Legislative leaders say closed-door conferences to detail the plan to lawmakers are scheduled for Monday. They wouldn't divulge any of the governor's proposal.

"There are a number of ideas on the table, and conversations continue," said Dan Weiller, spokesman for Assembly Speaker Sheldon Silver, a lower Manhattan Democrat. Silver has proposed his own plan, which included putting tolls on the bridges over the Harlem and East rivers.

But Silver has said he will support a bailout other than his own. He is expected to have little trouble securing the 76 votes he needs from Democrats in his 109-41 majority.

Smith "is open to continued discussions with the governor and the Assembly on improvements in the bill which would allow for a final agreement," said the majority leader's spokesman, Austin Shafran.

The Senate majority's proposal for a $1.76 billion bailout would be paid for through a payroll tax of 34 cents per $100 of wages, a $1 fee per trip for taxis, a 25 percent increase in the fee for driver's licenses, a $25 fee for vehicle registration and a fee on rental cars. It doesn't include Silver's tolls for the East and Harlem rivers. Half of the taxi fee - about $95 million - would be used to leverage borrowing for the upstate and Long Island road and bridge projects.

A state bailout is needed to avoid an average fare increase of 23 percent that the MTA board already voted to take effect this summer. The MTA board voted to increase the base fare on subways and buses from $2 to $2.50, eliminate two subway lines and 35 bus routes, and curtail service on other lines. Fares will rise on commuter rail lines, and bridge and tunnel tolls already in place will increase.

The measures are to address a $1.2 billion budget deficit that the MTA blames largely on the recession. This week, MTA officials said the deficit has worsened by another $600 million, which would require deeper cuts or a bigger bailout.

"It could look a good deal like the current Senate plan," said Gene Russianoff of the Straphangers Campaign of the New York Public Interest Research Group, which held a rally Tuesday calling for a bailout. "People are scratching their heads about why there is no solution and they are getting angrier and angrier."