New York City Mayor Bill de Blasio is proposing a steep tax on the city’s wealthiest residents to rebuild NYC’s crumbling subway system.
“It’s time for fairness when it comes to supporting the MTA. That is why today I’m calling on Albany to pass a millionaire’s tax to support the MTA,” said de Blasio on Monday.
For a person making $1 million per year, de Blasio’s proposal would impose an extra $2,700 in annual taxes.
“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,” insists de Blasio.
The proposal would increase the city’s highest income tax rate from 3.9% to 4.4%. The tax, which would affect 32,000 of NYC’s richest residents, would bring in $700 million in 2018 and by 2022 would be generating an estimated $820 million each year.
A significant portion of that revenue would go to “Fair Fares,” a proposal to offer discount MetroCards to low-income New Yorkers.
As he explained in an email statement, de Blasio doesn’t want “riders already feeling the pressure of rising fares and bad service” to foot the bill. “We are asking the wealthiest in our city to chip in a little extra to help move our transit system into the 21st century.”
There are two problems with de Blasio’s plan:
• Rich residents might leave New York City if they feel they are being singled out (which they are)
• Blasio’s proposal would take too long to bring in the money needed to fix the subway system
Metropolitan Transport Authority (MTA) Chairman Joe Lhota, who recently unveiled a short-term emergency repair plan, says he “can’t wait a year” for funding.
De Blasio and New York Governor Andrew M. Cuomo disagree on who should pay for the $836 million plan.
Cuomo believes the state should split the cost, but de Blasio argues that NYC has already committed over $2 billion towards the state’s 5-year, $29 billion transit system capital plan and shouldn’t have to spend any more.
“We need two things: immediate action, and a long-term modernization plan,” insists Cuomo. “One without the other fails the people of the city.” As Cuomo pointed out on Sunday, it could take up to a year for de Blasio’s tax proposal to be approved by the state legislature. On top of that, the Republican-led New York Senate has shot down similar tax proposals by de Blasio in the past.
“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,” said Cuomo. “We cannot ask New Yorkers to wait one year to start repairs.”
Problems with New York City’s aging subway system include severe overcrowding, an outdated signal system, and trains that are breaking down much more often than in the past.
According to an analysis conducted by The New York Times, the Lexington Avenue line is regularly failing to meet its schedule.
Dozens of trains are cancelled each day, which reduces the system’s capacity by tens of thousands of people. The overall on-time rate for trains is about 65%. For the Lexington Avenue line, the on-time rate is sometimes as low as 35%.
“We’re at a point where the congestion is stifling the growth of New York City,” argues Lhota.