Housing and MTA funding remain Long Island issues in state budget talks

By now, the state budget puzzle should be pretty much complete.

Instead, several significant pieces are missing — and plenty of questions remain as to how they fit.

Two of the puzzle's biggest holes are inextricably linked and matter much to Long Island — housing and public transit. 

These aren't simple issues. While those negotiating the budget agree on the need to build more housing, and to find more reliable, sustainable and recurring revenue streams for the Metropolitan Transportation Authority, the road to each goal is complex, nuanced and unresolved.

Getting this wrong could mean years of litigation and infighting, leaving progress on both housing and public transit out of the picture.

Gov. Kathy Hochul and state lawmakers need to find a win that works for all of us, not an ideological or political muscle flex in discordant Albany. They must get past the sheer desire for a "victory" and reach a budget agreement with logical and realistic solutions that can move our region forward, one that can have the intended impacts without the unintended consequences.

HOUSING

That means coming up with a measured plan to encourage more housing development statewide — as well as on Long Island, which needs more affordable rental options to stop the exodus of residents to places where the cost of living is cheaper. Hochul's Housing Compact, a proposal heavy on mandates and light on incentives, wouldn't do that.

The best plan will:

• Start with the municipalities, which should provide data and details, and come up with their own ways of getting to the intended goals.
• Maintain some housing targets, such as adding 3% to the downstate housing stock, but provide leeway on how municipalities reach the mandated goal. 
• Add flexibility on the length of time for counties, towns and villages to reach their targets, and drop the idea of a state board that could override local decisions on individual housing projects.
• Add transit-oriented development to the so-called "preferred actions" for municipalities. Mandating new TOD zoning isn't workable.
• Expand incentives significantly, using funding streams as both carrot and stick. And emphasize affordability, which remains key.

No matter what the final mix, it's unwise to fold so-called good cause eviction policies into an effort to jump-start housing production. That will hurt smaller landlords and discourage future development.

Coming up with a plan that incorporates all perspectives would mean Hochul understands what good elected officials do: hear and understand constituents' needs, and recognize that the "right" answer might not be the first one. 

TRANSIT

Hochul and Albany lawmakers recognize that the state must provide funding to the MTA. But which levers to push and pull to make the math work?

The MTA is currently funded by a maze of fares, taxes, subsidies and fees that range from mortgage recording taxes to internet sales taxes to motor vehicle registration fees. Adding more fiscal gimmicks to that mess might stabilize the authority — and the authority does need stabilizing. But it also would increase the agency's opaque complexity.

Hochul has pushed for an increase in the Payroll Mobility Tax, a point of significant contention on the Island, especially due to electoral battles waged more than a decade ago. Even without the politics, the PMT isn't the best answer; it's yet another convoluted funding stream that gets passed along to individuals. Simpler options like raising the top corporate tax rate or increasing the corporate franchise tax seem more direct. Those tax increases should be applied evenly, so they remain predictable and steady over time.

Also important: New York City has to provide its share, including contributing to student MetroCards and Access-A-Ride paratransit services.

Some ideas in the MTA mix shouldn't move forward. Tapping casino revenue seems legally and constitutionally questionable. A charge on video streaming services or selling residential parking permits in New York City are non-starters. While a ride-sharing surcharge may make sense, state officials must be careful; congestion pricing fees are already likely to make those services more costly. 

Then there's the familiar issue of fare increases. Without other funds, LIRR and subway fares could rise as much as 5.5% in 2023. The Assembly has proposed a one-time infusion of cash to avoid a fare hike this year. Freezing fares, or setting a far smaller increase, is reasonable, as the MTA tries to lure financially-strapped riders back. Going forward, predictable fare increases still make sense.

But the ultimate responsibility for the MTA's financial picture lies with the MTA. The authority promises to eventually find $400 million in efficiencies. That's a good start. If it is going to get a financial lifeline from the state, the MTA must right its own ship. That will mean a closer look at how its billions are spent, significant oversight over how the bloated bureaucracy is managed, and changes to work rules in upcoming union contract talks.

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Only by finding and fitting thoughtful, meaningful answers to the housing and transit questions can Hochul and the legislature complete the budget puzzle.