Mar 27, 2009 6:15 am US/Eastern
Controversial Proposal May Stop MTA Fare Hikes
Senate Majority Leader Smith Wants To Hit Everyone In Ridership Area With Income & Transit Surcharges
NEW YORK (CBS) ―
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Senate Majority Leader Malcolm Smith has a plan to save us all from MTA fare hikes. But, as CBS 2 HD has learned, you may want to delay the celebration.
CBS
There's a last-minute plan to save us all from the fare hike.
But don't jump for joy just yet.
The proposal to avoid the Metropolitan Transportation Authority's doomsday budget could end up costing some of you a whole lot more.
And it comes with the public outcry louder than the subway clatter.
Senate Majority Leader Malcolm Smith keeps saying he doesn't think the MTA fare hikes will go through. Why? He's got a fare-saving plan in his hip pocket.
The question is, will it fly?
"We basically are committed to making sure that the fare is not one that goes too high," Smith told CBS 2 HD.
Smith has born the brunt of the blame for failing to bail out the MTA. But CBS 2 HD has learned that he's got a new plan he's circulating in Albany to help get him out of the pickle.
"What we really need to make sure is that they have a recurring amount of revenue. We will be able to do that," Smith said.
Smith's plan is to hit taxpayers with a double whammy. To plug the state budget deficit he's set to approve a temporary surcharge on the personal income tax for people making over $300,000, bringing the top tax rate to something like 8.9 percent.
On top of that, Smith wants an additional -- and permanent -- income tax surcharge for the MTA.
It would take anyone who makes $100,000 and lives or works in the MTA ridership area, including those from Connecticut and New Jersey.
The rate would be .65 percent -- $650 bucks for every $100,000 you earn, even if you don't take mass transit.
Smith's plan is currently not too popular. Assembly Speaker Sheldon Silver is against the MTA surcharge.
"If in fact those surcharges do exist, we're going to push the state income tax to the point where it's probably unacceptable to New Yorkers," Silver said.
Added Kathryn Wylde of the Partnership for New York City: "New York City and state already have some of the highest personal income taxes in the country. To say we're gonna do that is to really put New York in a terrible competitive position."
MTA board member Allen Cappelli wasn't as quick to rule anything out.
"All ideas should be on the table, but time is of the essence because the train has left the station," Cappelli said.
If the two income tax surcharges do pass, Connecticut is going to look like an awfully good place to move to. Its income tax is just 5 percent.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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