Increasing Driver License, Car Registration Fees Could Raise $550 Million for Cash-Starved MTA
December 1, 2008
So it’s “official,” our country has been in a recession since December, 2007, according to the National Bureau of Economic Research, which announced the non-news earlier this morning.
Of course, we already knew this to be true for many months. On November 20th, MTA CEO Elliot Sander told the MTA Board, that new economic forecasts show projected deficit gaps of “$383 million for 2008, $1.441 billion for 2009, $2.394 billion for 2010, and nearly $3 billion in 2012, before prior-year carryover or gap closing actions.”
As I’ve blogged before, I am very concerned about the fiscal outlook for the MTA and how cuts to services, capital projects, system maintenance, and increased user fees will impact riders. But the negative effects spillover beyond transit users. The MTA is the lifeblood of the New York metropolitan area and when it suffers, so does the regional economy.
On September 15th, the Citizens Budget Commission (CBC) testified before the Ravitch Commission and outlined a number of practical suggestions for how to increase dedicated mass transit revenue.
Today, I wrote to Governor Paterson to urge that two CBC proposals be included in his 2009 Executive budget: Raising car registration fees and driver license fees by at least $50 annually.
When CBC President Carol Kellermann testified before the Ravitch Commission she noted that today the cost for a driver license in New York is under $6 annually. Raising annual fees for driver licenses to $50 would yield nearly $300 million. New York has the 8th lowest vehicle registration fees in the country (according to the CBC’s 2006 study South Carolina has the lowest at $12, and Maine has the highest at $435), and raising the vehicle registration fees would net an additional annual revenue stream of $250 million.
With the Ravitch Commission’s report due to be released on Friday, now is the time to be examining all the options including this one and other good ideas like reinstituting the commuter tax.
Recently, New York City Comptroller William C. Thompson, Jr. outlined a proposal to impose a weight-based transit-dedicated assessment of $100 for vehicles weighing 2,300 pounds or less, plus $.09 for every pound of curb weight over 2,300. This is an interesting idea that I believe merits further study. It differs from the CBC proposal which would see a flat fee increase for car registration fees.
In these tough financial times, I believe that it makes sense that those who choose to drive should help bear the costs of maintaining our public transportation infrastructure. These two new recurring revenue streams would constitute a good start in getting the MTA’s finances back on track.
In my letter, I suggested that during the first two to three years of this budget crisis, the MTA be given the flexibility it needs to put this revenue towards its operating deficit. But in the long term this money should be used for capital needs. After the third year I suggested that these recurring funds be dedicated 70% towards the MTA’s capital plan and 30% towards the NYS Department of Transportation Five Year Capital Plan - a fund which finances highway, tunnel, and bridge projects across the state.
I told the Governor that if these proposals were not included in the budget, I was prepared to introduce them as a separate piece of legislation. My letter to Governor Paterson can be found in the Publications area of my website.
Comments
Got something to say?
