Sales Tax or Tolling to Pay for MTA's Budget Shortfall?

The debate about ending the gas tax to fund transit capital projects has arrived in New York City, where the MTA is beset by a $12 billion shortfall. Although an increase in sales tax has its supporters, Stephen Miller and Move NY support tolling.

2 minute read

August 3, 2014, 7:00 AM PDT

By James Brasuell @CasualBrasuell


"The MTA capital program is facing a $12 billion shortfall, according to Comptroller Thomas DiNapoli, and unless that gap is closed, transit riders will end up paying even more to cover the agency’s ballooning debt load," reports Stephen Miller before making the case for tolling as the less regressive option for the MTA to make up its deficit.

While former Transportation Secretary Ray LaHood has suggested that New York adopt Virginia's model of transportation funding by increasing its sales tax. Miller shares the following data to rebuke that proposal: "But a sales tax is one of the most regressive revenue-raisers out there. Of the types of taxes states typically levy — on property, income, and sales — “sales and excise taxes are the most regressive, with poor families paying eight times more of their income in these taxes than wealthy families, and middle income families paying five times more,” according to the non-partisan Institute on Taxation and Economic Policy [PDF]."

Instead, Miller supports the funding model proposed by Move NY to toll drives entering Manhattan below 60th Street. Miller argues in favor of Move NY's plan: "Car owners are wealthier than car-free New Yorkers, and a Move NY analysis shows that drivers who will pay more under the plan have household incomes far higher than transit users. Asking them to pay a higher toll to support train and bus service, while lowering tolls in the outer boroughs, transfers resources from the haves to the have-nots — it isn’t regressive at all."

The article includes more details about differences between tolling and sales tax schemes. 

Tuesday, July 29, 2014 in Streetsblog New York City

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

White and purple sign for Slow Street in San Francisco, California with people crossing crosswalk.

San Francisco Suspends Traffic Calming Amidst Record Deaths

Citing “a challenging fiscal landscape,” the city will cease the program on the heels of 42 traffic deaths, including 24 pedestrians.

July 1, 2025 - KQED

Google street view of red brick multi-story power plant building in Pittsburgh, PA.

Defunct Pittsburgh Power Plant to Become Residential Tower

A decommissioned steam heat plant will be redeveloped into almost 100 affordable housing units.

1 hour ago - Pittsburgh Post-Gazette

Cyclist on protected bike lane in middle of street in Washington D.C. with Washington Monument obelisk visible in background.

Trump Prompts Restructuring of Transportation Research Board in “Unprecedented Overreach”

The TRB has eliminated more than half of its committees including those focused on climate, equity, and cities.

2 hours ago - Streetsblog USA

Blue and silver Amtrak train at small station.

Amtrak Rolls Out New Orleans to Alabama “Mardi Gras” Train

The new service will operate morning and evening departures between Mobile and New Orleans.

July 3 - New Orleans City Business