NEW YORK CITY—Mayor Bill de Blasio, who has recently engaged in a war of words with Gov. Andrew Cuomo and MTA chairman Joe Lhota over the city’s share of funding to fix the troubled subway system, has come up with a new funding source—the city’s wealthy.
The mayor at a press conference at Brooklyn Borough Hall on Monday proposed increasing the tax levy on less than 1% of the city’s wealthiest tax filers that if imposed would raise as much as $800 million a year for the city’s subway and bus systems as well as pay for half-priced Metrocards for low-income transit riders.
Among the groups that came out against the mayor’s tax plan included the Partnership for New York City. The organization’s president Kathryn Wylde said in a prepared statement the plan throws the city’s high earners “under the bus” and would bring New York nearly even with California in imposing the highest income taxes in the country.
The new tax would increase the income tax rate on the city’s highest earners (an estimated 32,000 New York City tax filers) by 0.534%, from 3.876% to 4.41%, on taxable incomes above $500,000 for individuals and above $1 million for couples.
The tax is projected to raise $700 million in 2018 and eventually rising to $820 million a year by 2022. The new funding would add on to an annual $1.6 billion in city operational support for subways and buses, and a $2.5-billion commitment in 2015 to the long-term needs of the MTA, the mayor states.
The plan calls for $500 million in dedicated revenue to modernize subways and buses that the mayor says could support borrowing of up to $8 billion for capital upgrades. The mayor believes this funding should be immediately directed toward signal improvements, new cars and track maintenance that will help prevent the delays and disruptions that have plagued the subway system recently.
The mayor is also proposing half-priced MetroCards for an estimated 800,000 low-income New Yorkers that would be financed by an expected $250 million of the revenue raised by the new tax.
Gov. Cuomo, who has recently criticized Mayor de Blasio for rejecting calls to help fund its share for needed subway improvements, in a prepared statement said the subway system is in crisis and needs immediate funding for upgrades. “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. We cannot ask New Yorkers to wait one year to start repairs,” Gov. Cuomo stated.
Wylde of the Partnership for New York City said, “The mayor has previously suggested that city residents are already paying more than their fair share and that there is need for greater transparency on the MTA budget. Now he is prepared to throw the city’s high earners under the bus.”
She later characterized the mayor’s proposal as “not a sustainable situation if we expect the city to attract top talent and business investment, particularly with the pending threat of federal tax reform that may eliminate deductions for state and local taxes.”