Budget Woes Beget Talk of Commuter Tax

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

City and state lawmakers, on the hunt for new revenue sources to balance an increasingly tight budget, are calling for a revival of the commuter tax.

Mayor Bloomberg issued a full-throated call for the tax to be reinstated yesterday, after the speaker of the Assembly, Sheldon Silver, reportedly said he was open to reviving the measure, which some supporters estimated could bring the city $500 million a year.

Several City Council members also are pushing for a return to the commuter tax, saying such a move could help stave off the 7% increase in city property taxes that the mayor has warned could be necessary to balance the budget in the middle of this budget year. The city is facing projected budget gaps of $2.3 billion next year and $5.2 billion the following year.

The tax of 45/100ths of 1% on the earned income of people who work in the city but commute from elsewhere had been on the books for 33 years, but was repealed in 1999, over the objections of Mayor Giuliani. It is estimated that the city has lost hundreds of millions of dollars in revenues since state lawmakers repealed it.

When asked yesterday about Mr. Silver’s openness to a new commuter tax, Mr. Bloomberg said at a City Hall press conference that he could not agree more with the speaker.

“I’ve been screaming about commuter taxes for as long as I’ve been here,” he said.

Mr. Bloomberg said he would be happy to try to lobby the Senate majority leader, Dean Skelos, to revive the tax, but cautioned that an effort to bring it back would likely provoke opposition from state lawmakers on both sides of the aisle. A reinstatement of the commuter tax would require the approval of Albany lawmakers.

A spokesman for Mr. Skelos, Scott Reif, said yesterday that the majority leader was opposed to the commuter tax, noting that Mr. Skelos led the push to eliminate it in 1999.

“We’re obviously not supportive of reviving the commuter tax,” Mr. Reif said. “We view it as an onerous and unfair tax and we remain opposed to any tax increases.”

The Republican Party’s edge in the state Senate is thin and a Democratic takeover after the November elections could mean more support for the call to reinstate the tax. The Democratic Senate minority leader, Malcolm Smith, however, indicated yesterday that he does not support the measure.

“Now is not the time to be talking about raising taxes. We need to focus on rebuilding New York’s economy by cutting property taxes, creating jobs, and reducing wasteful spending,” Mr. Smith said in a statement.

Mr. Silver’s comments about the commuter tax were first reported yesterday by the Daily News.

Council members who are balking at the mayor’s proposed property tax hike said that reinstating the commuter tax should be a top priority. Mr. Bloomberg said yesterday that while he was open to alternatives to raising the property tax, the city had few other tools with which to raise money. Property taxes are the only taxes that the city can raise on its own, without approval from Albany.

Mr. Bloomberg said that if council members can come up with another source of revenue for the city, he’d be happy to have it. He added, with sarcasm: “They could, for example, say that their neighborhoods don’t need any services, and that would reduce our expenses.”

Council Member Peter Vallone Jr. said the mayor and council should not even be talking about raising property taxes until a commuter tax is in place. He called on the mayor and the speaker of the City Council, Christine Quinn, to pressure Albany lawmakers “the way the council was pressured during congestion pricing,” a reference to the intense lobbying effort at City Hall to win support for the measure in the council.

Council Member Robert Jackson said he would support a new push for a commuter tax, but said he thinks its passage is far from certain.

“Absolutely, we should try to go for it,” Mr. Jackson said. “But I think we should not depend on it in any budget scenario. That would be penny wise and pound foolish.”

The New York Sun

© 2023 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

By continuing you agree to our Privacy Policy and Terms of Use