Cuomo and De Blasio Battle Again, This Time Over NYC Taxes

(Bloomberg) -- Governor Andrew Cuomo’s proposal to allow New York’s Metropolitan Transportation Authority to collect property taxes in neighborhoods served by mass transit would usurp the city’s power to raise its own revenue, according to Mayor Bill de Blasio’s administration.

The proposal, included in Cuomo’s fiscal 2019 budget summary, would let the MTA establish transportation improvement districts in New York City and capture revenues from rising real-estate values, without city approval. It also would require the city to match state funding for subway repairs whenever the governor declares a state emergency.

City residents and commuters already contribute about 70 percent of MTA’s revenue, Deputy Mayor Dean Fuleihan said Tuesday on a conference call. The city needs to be able to collect all of its property taxes to pay for its $86 billion annual budget, which includes funding for law enforcement, universal pre-kindergarten and addressing the opioid crisis, he said.

“We have many urgent needs,” Fuleihan said.

MTA Chairman Joseph Lhota said city officials would have the power to veto any transit project of more than $100 million, eligible for creation of a special tax district, through the city’s representatives on the state Capital Plan Review Board, a panel that must approve such projects statewide. 

Lhota, who served as a top deputy and budget director for former Mayor Rudolph Giuliani, didn’t address the likely possibility that a future mayor would be forced to reject construction of a major transit facility out of concern that supporting it would result in the city forfeiting property tax revenue to the state.

The dispute is the latest in a four-year long feud between de Blasio and Cuomo, the state’s most powerful Democrats. The two have battled over who should pay for fixes to New York’s problem-plagued subways. While the city owns the subway system, the state’s MTA runs it.

City representatives on the MTA board, which is dominated by Cuomo appointees, oppose almost $1 billion of station improvements proposed by the agency. City Transportation Commissioner Polly Trottenberg told reporters the work includes cosmetic lighting and other aesthetic improvements, and doesn’t take into account the need for better accessibility, while the system remains “in a dire financial situation.”

“The city had no input in picking these stations,” she said. “A lot of them are not the highest priorities.”

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net.

To contact the editors responsible for this story: Michael Shepard at mshepard7@bloomberg.net, Stacie Sherman, William Selway

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