MTA Bailout Deal Reached?

It's going to include increased payroll taxes, a taxi surcharge, and increased fares, but the State Senate apparently has the votes to make this deal happen. The proposed deal will forestall serious fare increases and doesn't involve tolling the East River Bridges.

I'm concerned about the math, given that the MTA claims to be in dire fiscal shape and needed hundreds of millions of dollars that only the tolling of bridges could have provided. Instead, the bulk of the deal is contingent on the payroll tax hikes on the 12 counties that make up the New York City metro region.

The Metropolitan Transportation Authority board approved increases ranging from 23 percent to 30 percent, but agreed to shelve its plan if the bailout is approved. Under the bailout, the fares would still rise about 8 percent on average, but layoffs and service cuts would be avoided.

A $1 fee per taxi ride has been cut to 50 cents. That would fund what Smith called a ``modest'' capital improvement at the MTA. A proposal for another 50 cents per trip to leverage about $1 billion in aid for bridge and highway work upstate and on Long Island was dropped, but Smith said it will be reconsidered in October when a full MTA capital plan is devised.

The proposal now goes to the Democrat-led Assembly where it is likely to be approved despite some concerns. All 30 Republican senators have said they are opposed to the bailout proposals, meaning Smith will need every Democrat in his 32-30 majority.

State Sen. Brian Foley of Suffolk County and Sen. Craig Johnson of Nassau County said they agree to what Smith called ``a framework ... to bail out the MTA.''

``We are going to limit the devastating fare increases, and you're going to see the end of service cuts,'' Johnson said.

Foley called the tentative agreement a watershed event for the Senate because the schools to be protected will be from Republican-represented districts as well as districts represented by Democrats.

Smith said the deal will include a ``graduated'' payroll tax that will decline in the outer rings of the 12-county MTA service region. Under the proposal, employers in Dutchess, Orange and Putnam counties north of the city would pay a tax of 25 cents per $100 of payroll. The remaining counties in the 12-county MTA district, including the city and those on Long Island, would pay 34 cents per $100 of payroll.

Smith said he was seeking a formal deal this week with Paterson and the Assembly's Democratic majority, which must also approve the bailout.

The deal wont prevent further fare or toll increases, nor does it address structural problems with the MTA budget, but it will prevent the so-called Doomsday budgets that would have seen massive fare and toll increases.