Just What the New York Metro Area Doesn't Need

With the massive budget problems facing New York City, New York State, New Jersey, and Connecticut, the solution to figuring out how to pay for mass transit is easy.

Raising taxes, imposing tolls, and otherwise taking the highest tax burdens in the nation and making them even higher at the worst possible time (not that there's ever a good time to raise taxes, but raising taxes during a recession is only guaranteed to make things even worse).

The MTA is saying that the best way to pay for its budget is to toll the East River bridges and to impose a nonresident tax.

The Metropolitan Transportation Authority needs to close an estimated $1.4 billion deficit in its operating budget next year and a $3 billion deficit by 2012. The agency is legally required to balance its budget.

A state commission's proposal, released Thursday, calls for boosting MTA fare revenue by 8 percent not the 23 percent previously proposed by the agency.

Under the state commission's plan, companies in a 12-county area would pay $330 in tax for every $100,000 they pay workers.

The MTA, a state agency, runs New York City's subways and public buses, the Metro-North Railroad and Long Island Rail Road, the Long Island Bus system and several bridges and tunnels.

However, the city-owned East River crossings are free.

It's unclear how any fare increase would be calculated across the transit system's various rates. They now range from $2 for a single bus or subway ride to $81 for an unlimited monthly pass.
Most fares went up in March, as did rates on the agency's commuter railroads and tolls on many of its bridges and tunnels.

So, let's do the math on a company that pays salaries of $100 million, which could be many large sized corporations, major law firms, particularly those associated with Wall Street. How many of them could afford to pay out still more in taxes? The government provided a bailout in the billions to AIG, and now the City wants AIG to pony up hundreds of thousands more in payroll taxes? Why would AIG want to stay in New York City? Payroll taxes are counterproductive and would send businesses to cheaper tax climates.

The Daily News provides some more details on the latest tax and toll plan.

Instead of trying to get costs under control, including pension obligations and shifting away from defined benefit plans to defined contribution plans, the idea is to soak taxpayers to keep the state workers and unions happy. Meanwhile, everyone else is being taxed into finding someplace cheaper to live. Let's also ignore the regressive nature of the tolls and fare increases, which hit those at the lowest income levels hardest.