Devil In Details On MTA Tax and Spend Plan

A few figures provided by the MTA should give everyone pause about just how much money can be raised by the tolling of the Harlem River and East River bridges.

The MTA claims that $1 billion per year will be raised, but $400 million will be needed for the infrastructure to make that happen, leaving $600 in actual money for capital projects.

That's an appallingly low amount of money from the project. And I suspect that the problem is even worse than that.

Since when has the MTA ever budgeted for anything and come in on budget or on time? They haven't.

They are years behind on the Fulton Street Transit Hub, and don't have any money to complete the aboveground portion. They were off by billions of dollars.

How exactly can anyone at the MTA say with a straight face that the installation of E-ZPass to impose tolls on the bridges will go smoothly or at the cost predicted?

Perhaps we should take the NJ lesson to heart, when NJ officials repeatedly claimed that E-ZPass would cost far less to install than it eventually did, and computer problems have repeatedly driven up costs for operation. New Jersey had to impose a monthly fee because of all the problems with the system. The computers took years to debug and cost tens of millions more than originally estimated. Enforcement also proved to be a bigger problem than ever expected, which means that no one should ever expect this system to bring in the revenues that are estimated. In fact, in 2002, New Jersey was forced to institute monthly fees because instead of being self sufficient, E-ZPass ended up with a $469 million deficit:

In addition to recurring operational problems, E-ZPass is on the verge of bankruptcy. The financial scheme put in place by the previous administration was not sound. It was not only supposed to pay for the installation and operation of the system, it was going to generate a $34 million in excess revenue. Instead of turning a profit, E-ZPass is mired with a $469 million deficit.

To begin to pay down the debt, a monthly fee of $1 per account will be instituted. This fee will be dedicated to reducing the E-ZPass debt and instituting improvements such as high speed E-ZPass. In addition, the two-cent and nickel discounts on the Garden State Parkway have been eliminated because they were not having enough impact on reducing congestion to justify its annual cost of $13 million. Discounts on the Turnpike and the Atlantic City Expressway will remain in place.

All the grandiose claims about the E-ZPass system were overblown, although dwell time at toll plazas is definitely reduced when a driver uses E-ZPass since drivers do not have to slow down to pay tolls. Building new tolls, however will increase congestion and cause more problems than anyone is willing to admit.

In many ways, the tolling of the bridges will be yet another attempt to impose congestion pricing on commuters, and it suffers all of the problems involved in congestion pricing, including a lack of transportation alternatives that can accommodate anyone shifting from driving to riding mass transit. It also suffers from increased traffic on bridges and tunnels and will create still more bureaucracy that diverts money from going into the very infrastructure in need of repair and upkeep.

Nicole Gelinas slices and dices the MTA's proposals and finds them wanting, particularly the payroll tax increases, which are guaranteed to reduce economic activity in the City, reduce payrolls and send jobs out of the region. Taxing payrolls kills jobs.

Then there are the regulatory and legal hurdles in the proposal, including the transfer of city-owned bridges and tunnels to the MTA, a public authority that has repeatedly shown itself to be incapable of handling its existing obligations and whose revenue forecasts and capital programs are in dire need of auditing to determine where exactly all the money is going.

Yet, Gov. Paterson and the MTA think that taxing commuters and businesses is actually going to increase revenues and generate jobs?

Ravitch and Paterson both billed the recommendations as a massive stimulus package that would pump billions of dollars annually into the state's staggering economy.

The payroll tax alone would generate $1.5 billion a year, which could be used to fund the MTA's next five-year capital construction plan totaling $25 billion to $30 billion, officials said.

How exactly is this a stimulus for anyone other than a few unions directly involved in the construction projects - sandhogs and transit workers? It's not going to help struggling firms on Wall Street, who would be hit with massive tax increases to fund the grandiose tax and spend schemes. It's not going to help businesses and residents who are struggling to make ends meet by paying out hundreds or thousands more in taxes, fare increases, or tolls annually. That's money can be spent by those businesses and individuals on other businesses and individuals, and not the black hole of incompetence that repeatedly marks the MTA's efforts to provide mass transit in the City and the tri-state region.