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De Blasio proposal would tax the wealthy to fix NYC subway, bus systems

New York City Mayor Bill de Blasio arrives

New York City Mayor Bill de Blasio arrives at Antioch Baptist Church in Corona, Queens, on Sunday, Aug. 6, 2017. Photo Credit: Steven Sunshine

Mayor Bill de Blasio on Monday proposed a tax increase on the city’s wealthiest residents to fund an upgrade of the city’s beleaguered subway system, a plan that critics say won't bring in the needed funding soon enough.

"This is not just a subway crisis, this is a human crisis. And New Yorkers are experiencing this every day," de Blasio said at a news conference at Brooklyn Borough Hall announcing his proposal. 

“In the last few decades I can’t remember a time when there was such a concentrated set of problems...we know we can't go on like this."

Under the mayor's plan, an individual making about $1 million would pay about $2,700 more in annual taxes, or about $7 a day, said de Blasio, calling the tax a “modest increase.”

“It’s time for fairness when it comes to supporting the MTA," he said. "That is why today I’m calling on Albany to pass a millionaire's tax to support the MTA. We need a millionaire's tax so New Yorkers who typically travel in first class pay their fair share so the rest of us can get around.”

The mayor’s plan would raise the city's highest income tax rate from about 3.9 percent to 4.4 percent — an increase of about 0.5 percent — for married couples making more than $1 million a year and for individuals bringing in more than $500,000. It would apply to less than 1 percent of New York City tax filers, about 32,000 people, according to the mayor's office.

The tax increase would generate an estimated $700 million in 2018 before rising to about $820 million annually by 2022, according to the mayor. About $500 million of the tax revenue would go toward capital improvement costs for subways and buses and about $250 million would fund Fair Fares, the proposal to offer half-price MetroCards to eligible low-income New Yorkers, he said. Details of the proposal were first reported Sunday by The New York Times.

The funding from the tax would have to be clearly outlined that it's going strictly to MTA operations and MetroCard discounts, de Blasio added. 

“Rather than sending the bill to working families, and subway and bus riders already feeling the pressure of rising fares and bad service, we are asking the wealthiest in our city to chip in a little extra to help move our transit system into the 21st century,” de Blasio, who is running for re-election, said in an emailed statement Monday.

The Fair Fares program would benefit as many as 800,000 New Yorkers living at or below the poverty line who are expected to qualify, de Blasio said.

But the plan has been criticized by MTA's chairman Joe Lhota, the Citizens Budget Commission of New York and the Regional Plan Association, who say taxing the rich will take too long to bring in necessary funds.

At a Penn Station news conference Monday, Lhota said he's not outright opposed to the millionaire's tax, but the mayor's proposal doesn't address funding needs right now.

"The mayor has not addressed the issue right now," Lhota said. "I can't wait a year" for the money.

Transport Workers Union representatives were at Monday's news conference rallying against the mayor's plan, echoing calls from the MTA and Gpv. Andrew Cuomo to immediately provide half of Lhota's $836 million subway action plan.

The mayor’s proposal comes as he and Cuomo disagree over who should shoulder the cost of upgrading the city’s failing subway system.

Cuomo has said the state and city should split the cost of a short-term $836 million emergency subway repair plan unveiled by the Metropolitan Transportation Authority. De Blasio has countered that the city has already committed $2.5 billion toward the state-run MTA’s capital plan.

Cuomo, in a statement issued on Sunday, noted that de Blasio’s plan would require legislative approval that could take up to a year to achieve.

The plan requires the support of the Republican-led State Senate, which has already shot down similar attempts by de Blasio, including a “millionaire’s tax” that would have raised money for affordable housing programs.

“The city should partner with us and match the state funding now so we can begin chairman Lhota’s overhaul plan immediately and move forward,” Cuomo said in his statement. “We cannot ask New Yorkers to wait one year to start repairs.”

De Blasio’s plan has already met opposition from Republicans in Albany. In a statement issued shortly after the mayor’s announcement, Senate Majority Leader John Flanagan called for the mayor to fund subway improvements with part of the city’s existing surplus.

“I’m pleased Mayor de Blasio recognizes that additional funds contributed by the city would further that goal, but raising taxes is not the answer,” Flanagan said. “Mayor de Blasio doesn’t need to reach into the wallets of city residents to make that happen.”

Some Democratic lawmakers did attend de Blasio's announcement in a show of support, including Queens Sen. Michael Gianaris, who in June proposed a similar millionaire's tax, and Manhattan Assemb. Daniel O'Donnell.

While the mayor has had difficulty advancing his proposals in Albany, Gianaris said during an interview with amNewYork that he's hopeful Cuomo and his colleagues will come together in support.

"We need to remove the personalities from the equation," Gianaris said. "This is a crisis effecting millions and millions of people every day. What matters to me is getting something done to improve the subways."

The debate over creating new dedicated revenue for the MTA has revived discussions of congestion pricing, which would add tolls to city roads and possibly the East River bridges in order to both manage traffic while also raising money for transit.

Cuomo is weighing whether to implement congestion pricing in New York City, according to an administration official. The governor is looking at various models and testing strategies and details could be part of his 2018 State of the State speech, the official said.

De Blasio demurred, citing “equity” issues for outer-borough car owners, but Lhota embraced the idea at his Penn Station news conference Monday.

“Congestion pricing is something that needs to be seriously considered,” Lhota said. “This debate needs to happen…We’re at a point where the congestion is stifling the growth of New York City.”

With Lauren Cook



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