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Dedicated Subsidies and How They Work

Updated Oct 15, 2019

While half of our revenue comes from our riders in the form of farebox revenue and tolls, a large percentage also comes from dedicated taxes and state and local subsidies. There are many taxes that help pay to operate our trains and buses.

Metropolitan Mass Transportation Operating Assistance (MMTOA)

Provides general operating subsidies and funds for the MTA and downstate transportation systems.

Petroleum Business Taxes (PBT)

A tax on petroleum businesses operating in New York State. Made up of:

  • a business privilege tax,
  • a gasoline and diesel fuel excise tax, and
  • fees for vehicle registrations and driver licenses.

Mortgage Recording Taxes (MRT)

The MRT consist of two distinct taxes. New York City and the seven other counties within the MTA’s service area collect the MRT. The MRT is imposed on borrowers of recorded mortgages of real property, and institutional lenders of recorded mortgages.

Urban Taxes

Consist of two distinct taxes applied to certain commercial real property transactions and mortgage recordings within New York City. The two taxes are:

  • Mortgage Recording Tax (see above)
  • A Real Property Transfer tax, which imposes a one percent levy on the property value for New York City commercial real estate transactions.

For-Hire Vehicle Surcharge

Beginning on January 1, 2019, the state has added a surcharge to some for-hire vehicle trips. The surcharge is added to trips within New York State that start, end, or traverse Manhattan below 96th Street.

Revenues from these surcharges are deposited into the New York Transportation Assistance Fund for the Subway Action Plan and other improvements. The fund consists of three sub-accounts, the Subway Action Plan Account, the Outer Borough Transportation Account, and the General Transportation Account.

Payroll Mobility Tax (PMT)/Commuter Transportation Mobility Tax

Enacted in 2009 to provide a stable source of revenues for the MTA. In April 2012, the state reduced the tax rate or eliminated the PMT liability for a number of taxpayers. That included public and private schools and school districts. Further, in January 2016, the State eliminated the PMT levy on all public library systems and on public and free association libraries.

MTA Aid Trust Revenues

A tax and fee revenue stream enacted in 2009 along with the PMT. The MTA can use these revenues to secure debt or to pay operating and capital costs. MTA Aid is composed of a License Fee, a Motor Vehicle Registration Fee, a Taxicab Tax, and an Auto Rental Tax.

State and Local Direct Subsidies

State and Local Direct Subsidies consist of the following:

  • New York State Operating Assistance – a statewide mass transportation program that provides direct State aid to the MTA. The State Legislature appropriates it on an annual basis.
  • Local Operating Assistance – payments made by the City and each of the seven suburban counties in the metropolitan commuter transportation district (MCTD). Transportation law requires that these match the amounts of State 18-b Operating Assistance.
  • Station Maintenance – a subsidy paid by the City and each of the seven suburban counties in the MCTD for the operation, maintenance, and use of commuter railroad passenger stations within their jurisdictions.

More details

For more information, read the MTA 2019 Final Proposed Budget: November Financial Plan 2019-2022. Information about taxes and subsides are in Volume 2, pages II-37 - II59.