CITIZENS UNION SUPPORTS

NEW REVENUE and TOLLING PROPOSALS TO FUND THE MTA

Historic Good Government Group Urges Adoption of Balanced Package in Whole Because It Shares the Burden

Opposes Envisioned New Role for MTA Chair and Advocates Additional Measures on Public Reporting and Accountability

Citizens Union today released a position statement announcing its support for many of the recommendations recently put forward by Metropolitan Transportation Authority Financing Commission (Commission), headed by former Metropolitan TransportationAuthority (MTA) chief Richard Ravitch, to address the MTA's dire need for new sources of revenue.

In testimony delivered today by Dick Dadey, executive director, to the State Senate joint Transportation and Corporation Committee hearing held at Brooklyn Borough Hall, Citizens Union specifically:

1. Supports the enactment of the following new revenue sources to avoid or reduce MTA service cuts and excessive fare hikes:
1. a regional Mobility Tax of one-third of one percent on all payrolls and income of self-employed persons within the twelve counties of the MTA district; and
2. Institution of cashless tolls on all presently un-tolled East and Harlem River bridges. 
2. Supports the non-revenue changes regarding governance and transparency with the exception of combining the duties of the Chairman of the MTA Board with those of the Executive Director; and
3. With added measures to ensure increased transparency and accountability,supports the authorization of bi-annual regional Consumer Price Index (CPI) based fare and toll increases.

Dadey said, "we believe that an efficient, reliable, and safe public transportation system is crucial to the functioning of New York City's economy and the vitality of life in the city, and that these collective measures are necessary to provide the needed funds for the continued maintenance and expansion of our city and state's transit infrastructure.   The appeal of this proposal is that it shares the burden among all the stakeholders and users of the system with no one entity being forced to carry a heavier burden than the others."

Citizens Union recognizes that solving this fiscal challenge of funding the MTA entails making tough choices that may not be politically appealing, but are necessary to guarantee the viability of the city and state's public transit system. In creating a package of revenue raising items, CU urges the Governor and the Legislature to embrace the measures proposed by the Commission, not just because they are singularly good ideas, but because taken as a whole, instead of piecemeal, they represent a thoughtful and comprehensive approach, and should be seen as such and not picked apart.  Citizens Union advocates that all interested parties work together, and make sacrifices to ensure that no one stakeholder contributes an inordinate share of the funding needed to solve the MTA's funding deficits. 

In supporting the fare and toll increase proposals, Citizens Union also proposed a number of additional changes, such as the need to:

1. Use "a fully coordinated tolling strategy, including the implementation of variable pricing and one-way tolling," which would allow for reductions in tolls during off-peak travel and other mitigating factors to ensure fairness to motorists;
2. Develop a more specific plan for cashless tolling that addresses the operational complexity of collecting cashless tolls from the many motorists who do not subscribe to EZ-Pass;
3. Exempt charitable organizations and persons with disabilities from paying the tolls, while providing for adequate enforcement to ensure that there are not abuses of such exemptions;
4. Enact a city income tax break for those who qualify based on the earned-income credit level, to help ease the financial burden on those for whom traveling to work by car is the only option; and
5. Implement a residential parking permit system in communities surrounding the affected bridges to avoid "park and ride" problems.

Citizens Union also recommended that the Governor and the Legislature consider other revenue generating proposals that are focused on motorists if tolling does not occur, such as New York City Comptroller William Thompson's weight-based registration fee. Comptroller Thompson's proposal would increase vehicle registration fees on private and commercial vehicles based on the weight of such vehicles, which is estimated to generate at least $1 billion annually for the MTA.

The Commission's report made several recommendations with respect to the MTA's governance and operations structure that Citizens Union largely supports.  In particular, CU supports:

1. Requiring Board members to possess experience in relevant areas to ensure that Board members are more knowledgeable and competent;
2. Separating the MTA's capital spending function from the operating expense function through the creation of a "lock-box" within a newly created MTA Capital Finance Authority in order to avoid burdening current operations with substantially increasing debt service charges;
3. Introducing greater transparency and accountability in MTA operations and increasing public awareness of the MTA's finances and operating arrangements;
4. Promptly implementing a program of enhanced and improved bus service and, particularly, a Bus Rapid Transit (BRT) scheme; and
5. Actively consider other innovative longer-term transportation initiatives to reduce traffic congestion in the boroughs outside of Manhattan, such as parking strategies and other congestion-reducing incentives. 

Citizens Union believes that although these changes will not result in any savings to the MTA,  implementing these efficiency and economy measures will create a streamlined internal structure that is more accountable and transparent. These changes are especially important if the public is to be persuaded that fare and toll increases are necessary.  

Citizens Union does not, however, support the Commission's recommendation to modify the present MTA leadership structure to combine the MTA Chairman's powers with those of the Executive Director.  We believe that the current separation of duties and reporting relationship between the Executive Director and the Chair of the Board is conceptually right, as has proven successful in the nonprofit context, but should be clarified and strengthened to ensure greater accountability and meaningful Board oversight.  We believe it is a conflict of function for the Chair to be the CEO while also providing leadership to the board's proper role in oversight.  The Executive Director should be a strong CEO while the Chair should lead the board and provide active oversight of the CEO and the MTA's operations and budget.  The model suggested is an old corporate model while our model is what most successful non-profits now use.

Citizens Union also supports the rationale for the authorization of bi-annual CPI fare and toll increases because it would depoliticize the process of increasing fares and tolls and ensure that they remain price consistent with the cost of living in the region.  Citizens Union believes, however, that the fare and toll policy changes must be accompanied by measures to ensure greater accountability of and transparency in the MTA's budget in order to increase the public's trust in the MTA's management and operations, as well as compensate for the elimination of dedicated fare and toll increase hearings.  Therefore, CU recommended that the Governor and the Legislature require the MTA to report bi-annually on important performance and management milestones, similar to the City's preliminary and final Mayor's Management Report, to ensure efficient use of MTA funds, especially those generated through the proposed CPI fare and toll increases.  This reporting will allow the public greater access to pertinent information to evaluate the MTA's management of funds outside of the normal budget process, and aid the public in holding the MTA accountable for complying with performance goals. 

Citizens Union of the City of New York, a nonpartisan force for good government for more than 100 years, works to inform and engage New Yorkers, to ensure local and state government values its citizens, addresses critical issues, and operates in a fair, open, and fiscally sound manner.

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Peter J. W. Sherwin, Chair • Dick Dadey, Executive Director • info@citizensunion.org