New York Governor Hopes To Use Casino Taxes For Public Transportation

State law might need to be amended to help bail out the MTA

New York Gov. Kathy Hochul said Wednesday she would like to divert some of the money the state collects from the state’s casinos to help bail out New York City’s Metropolitan Transit Authority (MTA), which is still reeling in the wake of the pandemic.

Hochul’s announcement, which came as she unveiled plans for the coming fiscal year’s budget, might require changing state law since taxes collected from casinos have been earmarked for other programs, primarily education.

The MTA has already announced plans to hike fares 5.5% this year to help make up for a budget gap, but Hochul outlined other revenue streams the agency could tap into, including a tax hike on businesses and the casino money. Transit fare collections are down 40% from before the pandemic and the MTA needs an extra $600 million to balance its books this year. Failing new revenue streams, the agency could be forced to cut services.

The governor also called on New York City Mayor Eric Adams to help make up the agency’s budget shortfall.

“The MTA must continue,” Hochul said in her speech. “It must continue being safe, reliable and available to New Yorkers.”

Unclear whether state law must be changed

Hochul said at a press conference after her speech that her office would explore whether using some of the state’s portion of casino taxes would require a change to state law, which stipulates that 80% of proceeds from casinos must go toward education programs.

“We’re talking about diverting part of the state’s share. We’re not affecting education in this process,” Hochul said. “This is an important source of funding for us to meet our obligations for education.”

The New York State Gaming Commission is in the process of gathering and reviewing applications for three New York City-area casino proposals. The state already has four commercial casinos upstate. Racinos in Yonkers and Queens are considered frontrunners to land two of the new licenses, but the third is up for grabs, with proposals from all over the city and surrounding counties.

The licensing fees for the downstate casinos will be at least $500 million each.

Photo: Patrick Oehler/USA TODAY


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