NEW YORK IN TROUBLE
After years of neglect and avoidance, the withholding of necessary expenditures to keep them doing their job, our Subways are deteriorating and are failing to meet rider expectations on a daily basis. In addition, the damage resulting from Super Storm Sandy significantly threatens performance.
Facing a barrage of consumer and political complaints, the Metropolitan Transit Authority hired a new Executive Director and has scrambled to make quick fixes. But time is up for those and funds far in excess of what is available are necessary to save this most vital element in the ebb and flow of New York commerce and standard of living.
Present estimates are that sixty billion dollars would do the job. Where will it come from?
On another level another disaster looms for half a million people living in New York City public housing. Here too an “authority” rules and has performed miserably and perhaps criminally.
The Federal Government is involved in the NYCHA disaster and some pressure has been brought to bear by the hiring of a Monitor to oversee the massive improvements which must be made.
Thirty-two billion dollars might make the necessary improvements. Where will that come from?
The answers at the moment are partially new and partially old.
The old is a proposal made more than a decade ago by then Mayor Michael Bloomberg. With London and Singapore as examples, he proposed “congestion-pricing”..in effect a toll on every vehicle coming into the city and going below 60th Street. Rather than increasing bridge tolls, the Bloomberg Administration thought this approach would specifically relieve the midtown area of horrific gridlock. The State Legislature turned the idea down flat. Politicians were convinced that constituents from the outer boroughs would turn on them. The plan was introduced and was dead on arrival.
And so it has remained until now when both the Governor and recently converted Mayor have joined forces in an effort to find the money to fix the Subway and perhaps help fix NYCHA.
The estimate is that the city will receive one billion dollars annually from congestion pricing and that will be enough to set up a $15 billion dollar bond issue using this familiar borrowing approach to do the job of fixing the Subways.
The new idea is to make marijuana legal, tax it and generate $125 million annually and at the same time tax online product sales that would produce $320 million per year and then combine these to issue a $7 billion bond issue to help the MTA and perhaps, NYCHA.
Here the expectation is that the State Legislature will accept these numbers and approaches and approve them. That remains to be seen. But there is another way.
NO NEW TAXES..HOW ABOUT AN OLD ONE?
Rather than introduce these new taxes and tolls what about using a tax that has existed since 1905 and that will provide far more money than those above without necessarily having to float bond issues which must be repaid by tax returns.
He said that for more than 100 years New York has had a modest tax on stocks traded similar to taxes in London, Singapore and other global financial centers. That tax income came into NYC from 1905 until 1981 when with the help of the Reagan Administration, the tax was rebated back to Wall Street and has been rebated back to the Market ever since.
According to Espinal the Stock Trading tax amounts to about $11 billion annually and could clearly “create an infrastructure trust that would invest immediately into fixing the subways and NYCHA properties. This would provide ten times the expected revenue from congestion pricing and 36 times more than marijuana legalization.”
According to Espinal “It will take courage to take on Wall Street and we will hear threats that the financial sector will abandon New York. Critics said the same thing in 1905 when the stock transfer tax was introduced but Wall Street stayed and continued to grow. Ending the rebates of these taxes would result in Wall Street making a vital contribution to fixing New York City.”
The New York Stock Transfer Tax already exists. There is a page for it on the State Department of Taxation and Finance website. It sets out the rates – from 1.25 cents a share on low-value stocks to 5 cents a share for high-value stocks with a cap of $350 on any given trade.
There is no hardship here. There is no complicated approach to cars coming into the city and traveling below 60th Street with as yet no understanding of how these tolls will be collected. There is no need to legalize yet another addictive drug just to collect taxes. There is a tax that can provide significant income now with just a single change of direction.
Can the Governor and Mayor stop playing a game with the city, stop trying to find a reason to run for President and do something constructive? Mr. Cuomo lost Amazon but will he be able to make the trains run on time?
Now that he’s gotten the Mayor involved we wouldn’t bet on it. Nothing that man touches works.
If the above new taxes aren’t enacted, the default will be fare increases. These’s no way to do this without pissing people off. Riders seen to have the least clout.