The Metropolitan Transportation Authority at a special board meeting Friday urged the New York Legislature to pass a plan that would give it new revenue streams to finance its capital program and provide additional operating funds.
Board members and staff painted a dire picture of service cuts, fare, and toll increases of 23%, and layoffs that the authority is prepared to adopt at its March 25 board meeting if a revenue plan is not approved.
State Assembly Speaker Sheldon Silver supports a modified version of a proposal made by the so-called Ravitch Commission that would place tolls on East River and Harlem River bridges that are currently free, add a payroll tax to area employers, and increase fare and toll yields by 8%. A number of state senators oppose tolling currently free bridges.
"Everything's still being discussed," said Austin Shafran, spokesman for Senate Majority Leader Malcolm Smith. While the tolling proposal is unpopular with some members of the Senate, Shafran said the payroll tax "seems to be something getting less opposition than the different toll proposals."
"The payroll tax is something that would be a large influx of money that could take care of most of the needs, at least in the short term," he said.
However, the Senate doesn't feel tied down to an artificial deadline set by the MTA to find a solution to the authority's budget problems, he said.
Regardless of the Senate's stance, a piecemeal approval of the Ravitch commission recommendations doesn't have much traction with the Assembly leadership.
"The speaker has advanced a proposal and it's meant to go as a whole because it's based on the idea that all who benefit from the system should share in its cost," said Silver spokesman Dan Weiler.
As of Friday, neither chamber of the Legislature had introduced a bill. Weiler said Silver didn't want to introduce a so-called one-house bill that would pass the Assembly and not the Senate. A draft program bill from the governor's office calls for the creation of the MTA Capital Finance Authority, which would have the authority to issue bonds and notes.
MTA executive director and chief executive officer Elliot Sander said that if the Legislature does not pass the entire package of recurring revenues, "we'll be back here again next year looking at deficits that will be even greater."
The payroll tax, which would impose a 0.34% tax on payrolls on employers in counties served by the MTA, would provide the authority with an estimated $1.13 billion in 2009 and $1.53 billion in 2010, rising to $1.86 billion by 2014. An 8% increase in fare and toll yields in the current year would bring the MTA an additional $233 million this year and $399 million next year.
Chief financial officer Gary Dellaverson presented projected debt service costs to the MTA assuming the Ravitch commission recommendations were approved but did not present projected debt issuance using the new revenue streams.
The authority did not respond to a request for information about the amount of bonds that would be sold if the Ravitch plan were passed. New borrowing over the next six years, including borrowing on the authorities traditional credits, would add $258 million of debt service in 2009 and $1.28 billion by 2014.
In December, Richard Ravitch, a former MTA chairman who was appointed by Gov. David Paterson to head the commission, told The Bond Buyer that he expected the new revenue streams could support the issuance of as much as $30 billion of bonds over five years under a new credit backed by the payroll tax.
