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The Legislature’s Planning, Development, and Environment Quality Committee today recommended that the Legislature seek State authorization to dedicate Mortgage Recording Tax revenue for mass transportation purposes.  Support came by a unanimous 4-0 margin, with Legislator Kathy Luz Herrera excused.

The Legislature is considering a 0.25% increase in the Mortgage Recording Tax (a one-time tax on the value of a mortgage levied at the time of closing) to allocate to the Tompkins Consolidated Area Transit (TCAT) system to support operating and capital needs.  The proposal would increase the County mortgage tax from 0.75 to 1%.  (Current mortgage tax revenue is split between the municipality in which the transaction occurs and the State.)

County Administrator Joe Mareane told the committee today that, looking forward over the next five years, he sees the need to meet TCAT’s impending operational and capital needs as “the greatest source of instability” to the County budget and the property tax levy over the near term.  He noted that without the Congressional “earmarks” that have historically supported capital needs such as the purpose of buses, TCAT is projecting operating deficits and significant unmet capital needs. Without the mortgage tax revenue, he said, TCAT will be unable to maintain current levels of operation without raising fares, reducing service, and requiring its three funding partners (the County, City of Ithaca, and Cornell University) to increase their contributions.  Mareane said the intent is to create a “sustained capital capacity” for TCAT.  The quarter-percent increase in the tax is expected to generate $850,000 in annual revenue.

Legislator Pam Mackesey, who also chairs the TCAT board, told the committee the system has experienced an ongoing “structural deficit,” with $13 million capital needs over the next five years, not including renovation or expansion of its facility.  She said nearly $7 million of that amount will be needed to replace 17 buses that are ending their useful life.

The Legislature would seek the revenue under the “Additional Tax” element of the Mortgage Recording Tax, commonly used as a source of local tax support for mass transportation, with 24 of 36 New York counties dedicating the tax to that purpose.  Administrator Mareane noted counties may unilaterally choose to levy the quarter-percent tax, but without State law specifying use of tax proceeds, revenue would flow to the State.

The recommendation, which next will be considered by the budget committee before advancing to the full Legislature, would request the County’s State legislative delegation to sponsor and support legislation to authorize dedication of revenue from imposition of the  Additional Tax” element of the Mortgage Recording Tax for mass transportation purposes.

At the meeting, Legislator Dooley Kiefer, who is not a member of the committee, expressed some concern, characterizing the proposal as a “narrow approach” that could amount to the County contributing more than its equal share to TCAT operations.

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