The city’s stealth toll hike

| NY Torch

The Times offers some evidence that a couple hundred million dollars (at least) of the Ravitch plan to raise $2.1 billion in new money annually for the state-run Metropolitan Transportation Authority through new bridge tolls and a payroll tax wouldn’t actually be new revenue going to the MTA. It would be a stealthy indirect tax hike benefiting the government of New York City instead.

Notes the Times of the proposal to toll the East River bridges, “under the plan, the city would no longer have to pay an annual subsidy of close to $300 million to support the private bus lines the authority took over at the city’s request. … But the plan links the elimination of the subsidy to the new bridge tolls. The expected toll revenue is estimated at $600 million a year.”

But the bridge-toll hike actually would generate $1 billion in gross revenues a year, with $400 million going to expenses first. Those expenses include the cost of the cashless tolling system, plus the upkeep of those bridges — something that the city pays for now. The payers of the new toll thus would be directly responsible for a bridge-maintenance cost that’s now part of the city’s budget.

The city, though, would pay an extra $73 million to the MTA under another part of the plan, which would levy a payroll tax on all employers, even governments.

So in all, the plan to raise $1 billion in gross tolls from New Yorkers would relieve the city of $237 million in cash costs for bus subsidies after the city’s new payroll-tax contribution, plus relieve the city of its current bridge-maintenance responsibility.

This part of the revenue hike borne by New Yorkers benefits the city, then, not the MTA.

This new revenue stream for the MTA is supposed to be a fair, transparent, non-political way for the state to fill the MTA’s capital gaps. But these structured-finance sleights-of-hand aren’t the greatest start.

Moreover, if the city wants people to start paying tolls on the East River to fund the cost of those bridges rather than paying these costs from the general budget, it should just say so.