What to Know
- At a news briefing Monday, Mayor de Blasio said the subway system was in crisis, adding, "We do not want to see this madness continue"
- The plan would increase the city’s highest income tax rate by 0.534 percent on taxable incomes above $500K for individuals, $1M for couples
- The mayor's office says it would also allow the city to slash subway and bus fares for hundreds of thousands of low income New Yorkers
Mayor de Blasio wants to tax the wealthiest 1 percent to fund critical repairs and improvements to the beleaguered subway system, and he says the proposed tax adjustment would allow the city to slash subway and bus fares for hundreds of thousands of low income New Yorkers.
The millionaires' tax proposal would raise as much as $800 million annually for the city's subway and bus system, de Blasio said Monday. He called for state lawmakers to pass the proposal "so the rest of us can live our lives here in the city," describing it as a simple "matter of fairness."
"We understand that in recent months what New Yorkers are experiencing on the way to work, on the way to school, is delays like they've never seen before. We hear the reports every day -- the track fire, the signal malfunction, the electrical breakdown," de Blasio said. "There's been challenges for years but in the last few decades I can't remember a time when there was such a concentrated set of problems as just in the last few months. And that's what I call a crisis. all those years, decades when the MTA should have invested in solutions, they didn't. And it's all coming back to hit us now."
The mayor called on the state, which runs the MTA, and the governor, who appoints its leadership, to step up and return capital funds to the agency. Those funds would help with short-term fixes, de Blasio said, and pledged that his millionaires' tax, the first in MTA history, would be a long-term revenue source.
"It's about time," de Blasio said. "We know we can't go on like this. and we know New Yorkers are frustrated. People do not want to see this madness continue."
The mayor's tax proposal would increase the city’s highest income tax rate by 0.534 percent, from 3.876 percent to 4.41 percent, on taxable incomes above $500,000 for individuals and above $1 million for couples.
The mayor says the tax will be paid by an estimated 32,000 New York City tax filers – 0.8% of the city’s filers. The tax is projected to raise $700 million in 2018, before rising to $820 million a year by 2022, his office said. The new investment will 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 $500 million in revenue dedicated to modernizing the aging city transit system could support borrowing up to $8 billion for capital upgrades. De Blasio wants the funding to be immediately directed toward core improvements like signal improvements, new cars and track maintenance key to reducing delays and disruptions that have paralyzed the system in recent months.
Under the plan, half-priced MetroCards for low-income New Yorkers will be financed by an expected $250 million of the revenue raised by the tax. As many as 800,000 New Yorkers are expected to qualify for half-priced MetroCards based on their income levels, the mayor said.
Meanwhile, de Blasio and Gov. Andrew Cuomo, both Democrats, are continuing to squabble over responsibility for paying for repairs to the nation's largest transit system that has seen growing delays, mechanical failures, power outages and even derailments.
MTA Chairman Joe Lhota acknowledged Monday that the mayor's proposal would bring in a permanent stream of income to modernize the subway system as part of a long-term plan -- but it doesn't address the urgent need to first stabilize the subway.
"We have a subway system that needs to be maintained, that's what we need the money for now," he said.
"I need this now, we need to get this done," Lhota continued. "I can't wait till next year. We've gotta do this right now."
Lhota vowed that he would continue to press the mayor to contribute half the funds necessary to the $836 million price tag for the emergency stabilization plan. Cuomo has already pledged the state would pitch in for half the bill, but de Blasio has refused. On Monday, he kicked that back to the state.
"Taking responsibility is the first step to a solution," de Blasio said. "For decades, the people of New York City have paid into the MTA over and over again and have not gotten their fair share back."
The current five-year transit system capital plan, which covers upkeep for the subways, the Long Island Rail Road and Metro-North, plus other pieces of the transit system, is about $29 billion. The city has pledged $2.5 billion and the state $8.3 billion, plus Cuomo recently pledged an additional $1 billion.
But again, that doesn't include money for immediate repairs.
The number of subway delays has tripled in the past five years, to 70,000 per month, and rush hour cancellations and delays on the Long Island Rail Road were at the highest level in 10 years, according to a June report.
About 5.7 million people ride the subway on an average weekday.
The finger-pointing by city and state officials is due in part to the transit agency's messy ownership structure. According to Lhota, 1981 law was meant to help the city during a major financial crisis, when it could not pay capital costs and the subways were in much worse shape than they are now. The state picked up the tab, but it was never meant to be permanent, he said.