Review Ofsfy 2017-18Enacted State Budget

Review ofSFY 2017-18Enacted State Budget

Funding for Public Transportation

April 10, 2017

Bob Zerrillo, Bob Reid and Padraic Bambrick

The Governor and Legislature have completed action on the 2017-18 state budget. The agreement continues holding spending growth to 2 percent while reducing taxes, making investments in education, enacting comprehensive criminal justice reforms, and rebuilding New York’s infrastructure.

Thanks to the hard work of NYPTA members and staff over the past several months, the enacted budget includes increases in transit capital and operating aid above the executive budget levels, addressing several of NYPTA’s priorities.

Overall, theState Operating Funds spending is $98.1 billion in FY 2018 – an increase of 2 percent. (State Operating Funds exclude Federal funds and capital) while All Funds spending is $153.1 billion for FY 2018.

Other key provisions include:

The Division of Budget (DOB) will be given the power to develop a response to any federal cuts (above $850 million) after which it would besubmitted to the Legislature which would have 90 days to offer a counter-proposal. If lawmakers do not act, the DOB plan would be implemented;
Revives the 421-A housing tax break;
Authorizes ride-hailing services such as Uber and Lyft to operate outside NYC;
Includes legislation to spur municipal consolidation;
Appropriates $2,5 billion for clean water projects;
Extends the Millionaires tax for two years;
Enacts Workers Compensation Reform including ensuring swift access to hearings for injured workers not receiving benefits; creates a clear formulary for prescription drugs; relief to first responders exposed to a traumatic event at work; more definitive limits on caps; and updates to medical guidelines;
Appropriates $200 million to build a 750-mile trail around the state;
Reduces middle class taxes from 6.45% to 5% in the $40,000-$150,000 income bracket and reduces from 6.65% to 6% in the $150,0000-$300,000 income bracket when fully implemented.

Summary of Transit Impact

A 2% increase in STOA funding to upstate and downstate transit systems other than the MTA over 2016-17 levels, adding $4 m. to upstate and $6 m. to downstate.
STOA appropriations to MTA are maintained at essentially the Executive Budget level.
$4.0 m. in the Department of Health budget for upstate rural transit systems, similar to last year.
A $20 m. increase in capital funding to non-MTA systems over last year’s levels, for a total of $104.5 m. for non-MTA capital projects.
$1.467 b. for the MTA 2015-19 capital program as part of the state commitment to fund a total of $8.3 b.,plus an additional $65 m. in capital funding.
Allows Transportation Network Companies to operate outside New York City.

State Transit Operating Assistance (STOA)

Upstateand downstate transit systems other than the MTA receive a 1.99% across the board increase from 2016-17 levels, for a total of $204.6 m. upstate and $313.8 m. downstate.

The MTA receives $4.618 b. in STOA, a $31 m. decline in appropriation, but will receive an increase on a cash basis.

The following table provides the specific appropriation levels compared to the prior year.

Rural Transit Funding

The budget provides $4 m. to supportupstate rural transit services in the Department of Health budget, the same level as 2016-17.

Transit Capital Funding

The budget adds $20 million in capital aid for Non-MTA transit systems to the Executive Budget level of $84.5 m., resulting in a total of $104.5 m. in capital funding in 2017-18, as follows:

$20 m. specified to upstate transit systems (same as 2016-17)
$20 m. for non-MTA transit systems capital projects (new)
$18.5 m. for state 10% match to federally aided projects (same as 2016-17)
$18.5 m. for non-MTA capital projects (same as 2016-17)
$27.5 m. for non-MTA capital projects from New York Works (same as 2016-17)

The budget retains language allowing the $20 m. in upstate capital funds to be used to offset the required local match to federally funded capital projects.

Following are the specified capital appropriations to upstate transit systems:

To summarize the $104.5 m. in non-MTA capital funding:

$20 m. is for upstate systems as described above;
$18.5 m. is for the state’s 10% match to federal aid;
The remaining $66 m. will be distributed to systems by NYSDOT.

Article VII Legislation

Legislation in the budget impacting transitincludes:

Extends deadline for diesel emissions retrofits to December 2018.

Extends the Transportation and Transmission tax now deposited in the upstate PTOA account and removes the 2018 sunset provision.
Allows Transportation Network Companies to operate outside New York City, and implements a 4% fee on gross fares. Revenues from TNCs are deposited in the state general fund.
Implements significant reforms to Worker’s Compensation law that will reduce costs for employers.
Requires DOB to prepare a budget reduction plan if federal Medicaid funding to NYS is reduced by $850 m. or more. The Legislature would have 90 days to prepare its own plan, or the DOB plan goes into effect.

Workers Compensation Changes:

The final Budget agreement includes a number of changes to the State’s Workers’ Compensation law. Several of the reform measures are expected to reduce overall Workers’ Compensation costs for transit systems. Transit systems should be aware of other changes, however, that impose new requirements and penalties on employers, insurance carriers, and self-insured employers. The law also includes a number of administrative changes, additional protections for injured workers, and creates a fiduciary fund to help stabilize Workers’ Compensation rates over the next five years.

The reforms include more definitive time limits on the caps for permanent partial disability (PPD) and updating medical Scheduled Loss of Use (SLU) guidelines to reflect advances in modern medicine. These reforms had been advanced by the Business Council of New York State as measures that would significantly reduce overall system costs. Under the final agreement, the start date for the PPD durational cap will set in after 130 weeks, rather than the date of injury, which the Business Council had advocated. With regard to the SLU impairment guidelines, the Workers’ Compensation Board is required to issue proposed amendments for public comment bySeptember 1, 2017, that “shall be reflective of advanced in modern medicine that enhance healing and result in better outcomes.” The law requires that new guidelines be adopted byJanuary 1, 2018.

The new law requires a public actuary to issue an annual report, startingJune 1, 2018, indicating the overall savings in the Workers’ Compensation system as a result of the 2017 reforms.

We will continue to review budget legislation and report on any additional provisions impacting public transportation.