Mayor Bill de Blasio has said he’s not about to wage war with his suburban neighbors about such issues. “I respect their concerns because they’re talking about mass transit for their communities,” he said earlier this month. “I am open to whatever gets us to a solution by April 1st -- that’s the bottom line.”
The toll would raise about $1 billion a year, enough to finance $15 billion in bond issues toward transit improvements. The legislature is also considering a pied-a-terre tax on non-resident-owned apartments worth more than $5 million, which would bring in about $650 million a year; that would be sufficient for about $9 billion in borrowing authority. An Internet sales tax would produce an estimated $5 billion.
Pot Stalled
Cannabis legalization would have been good for another $2 billion or so but it stalled in the legislature, meaning the MTA would remain about $11 billion short of its goal.
The transit agency’s current $33.3 billion capital plan is financed by federal, state and city sources, as well as bond sales and pay-as-you go capital. The MTA hasn’t yet drafted its 2020-2024 plan. Moody’s Investors Service rates the MTA’s credit at A1 -- and gave it a negative outlook in December. That was based on financial challenges from service and ridership declines, inflexible labor costs, capital needs and growing public pressure to improve service and limit fare increases.
“You really worry about the deterioration of the system and a decrease in ridership,” said Howard Cure, director of municipal bond research for Evercore Wealth Management. “There could be continued downgrades and widening of spreads if they don’t get these funds.”
Exempted Cars
Among the matters lawmakers still have to deal with is who to exempt from the tolls. Carve-outs caused problems in Stockholm, where revenue fell 14 percent short of projections due to so many exempted vehicles. Revenue also disappointed officials in London and Singapore when reduced traffic resulted in fewer motorists paying fees, according to Citizens Budget Commission data published March 19.
“It’s administratively cumbersome and a threat to revenue to carve out exemptions for the disabled or people traveling to medical appointments and other needs,” said Matthew Daus, a New York-based national transportation consultant based who served as chairman of the city Taxi and Limousine Commission from 2001 to 2010. “Politicians tend to be more generous than they should in exempting people and that can hurt the bottom line.”
For Cuomo, the bottom line is that without congestion pricing, the state-run MTA would have to increase subway and bus fares by 30 percent, jumping a single ride’s cost to more than $3 from $2.75 and a monthly pass to about $160 from its current $127.
“Either the rider pays in fares and tolls or it’s congestion pricing,” Cuomo said on Feb. 7 as he tried to sell the plan to the Association for a Better New York, a business civic group. “That’s the real choice.”
This article was provided by Bloomberg News.