Former MTA official suggests a surcharge on rents to pay for transit maintenance

Posted On Tue, October 24, 2017 By

Posted On Tue, October 24, 2017 By In Policy, Transportation

One night, workers removed 41,800 pounds of scrap debris, photo via MTA

Although it’s obvious New York City’s subway system remains in desperate need of repair, it’s less clear how these renovations, and the required infrastructure maintenance, will be funded. During a “Fixing Mass Transit” event hosted by Crain’s, a former official with the Metropolitan Transportation Authority, Michael Horodniceanu, suggested creating a “transit-maintenance district.” By adding a $1.50 charge to the core business district’s $60-to $70-per-square-foot rents, more than a billion dollars could be raised for transit upkeep, Horodniceanu said (h/t Crain’s).

Similar to the business improvement district, fees paid by these businesses south of 60th Street would go toward maintaining the subway operations. Horodniceanu, who formerly led the MTA capital construction and led work on the Second Avenue subway, said underinvestment in maintenance is one of the major issues facing the transit system today. The former transit official estimated that maintaining the system’s infrastructure would require $6 to $8 billion per year.

Horodnuceanu believes adding just $1.50 in a fee could partially raise the necessary funding: “We have approximately 700 million square feet of office space south of 60th Street,” he said. “You’d be able to raise more than a billion dollars” annually.

Despite currently being in a state of emergency, the state’s top Democratic officials, Mayor Bill de Blasio and Governor Andrew Cuomo, cannot agree on who should pay for the MTA and how to create a dedicated funding source for the authority. While Cuomo said he will put forward a congestion pricing plan, which charges driver to enter some of Manhattan’s busiest areas, de Blasio said he doesn’t believe in the plan.

De Blasio, who called congestion pricing a “regressive tax,” announced in August his plan to tax wealthy New Yorkers to pay for the MTA repairs. The so-called millionaires tax would increase the tax rate of the city’s wealthiest residents to 4.4 percent from roughly 3.9 percent for married couples with incomes over $1 million and for individuals who make more than $500,000 annually. Cuomo has called the mayor’s tax “dead on arrival” because of Republican opposition in Albany.

In July, the MTA released a plan that would cost more than $800 million in subway repairs and renovations and asked the bill be split between the state and city. While Cuomo has agreed to contribute half of the cost, de Blasio has so far refused.

[Via Crain’s]

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