Gov. Hochul proposes payroll tax increase, casino revenue to save teetering MTA

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Governor Kathy Hochul has proposed an increase in the state’s payroll tax to funnel much-needed money to the financially-teetering Metropolitan Transportation Authority and prevent painful service cuts, she announced in her executive budget presentation Wednesday, but straphangers can still expect to pay 5.5% more to ride the subway or bus this year.

“We have to face the harsh reality of MTA’s fiscal cliff,” she said at her 2024 executive budget address. “A problem that was created by almost the complete cessation of ridership during the pandemic, except for the emergency workers and first responders and health care workers.”

The MTA budget gap stands at $600 million and has been projected to widen into the billions in coming years as federal funding runs out.

She described it as “a share of future casino revenues — those in the MTA region, if there are any, stay tuned — that’ll go to the MTA, part of that will go to the MTA as a funding source.”

Budget documents show a proposed $1.5 billion in licensing fees from three downstate casinos and up to $826 million in annual tax revenue could go toward MTA operating costs.

The license-awarding process will determine the specifics with no contributions expected to be set until 2026 or later.

Hochul was asked about casino funds intended to boost schools.

“We’re talking about diverting the part of the state’s share,” she responded. “We’re not affecting education in this process.”

On Wednesday, Mayor Eric Adams at first refrained from commenting on increasing the city’s share of the MTA bill.

“I’ll look at it and analyze it,” he said in response to a NY1 question.

But he later issued a statement saying an increased commitment could further strain the city’s already-limited resources.

Adams noted that New York City currently contributes about $2 billion to the MTA annually in direct and in-kind contributions.

The independent Citizens Budget Commission applauded Hochul, saying she proposed “a long-run plan rather than kick the can down the road.”

But it said a major prong should be savings from MTA management and labor.

The MTA has announced its plans increase fares by 5.5% this year.

Critics responding Wednesday to Hochul’s budget address contended there aren’t measures in place to improve service.

Queens Assemblymember Zohran Mamdani said there are no plans to increase ridership and thus make the system safer.

City Comptroller Brad Lander said congestion pricing should be among the alternatives to fare hikes.

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