Make [Some] Commuter Pay Their Share

New York City subways are falling apart. The Metropolitan Transportation Authority has a $38 billion debt and $18 billion in unfunded health-care obligations. Governor Andrew Cuomo and Mayor Bill de Blasio spend most of their time blaming each other for the region’s transportation woes.

The New York Times thinks it has a solution: “Make commuters pay their share again.” That sounds like a great idea! The people who ride the trains should be the ones to pay for them.

But that’s not what the Times means. Instead, it wants people who live outside the city to pay a commuter tax to work in the city. Such a tax, equal to 0.45 percent of each commuter’s income, once was in place, but was repealed in 1999. If renewed, the Times estimates, it would add nearly a billion dollars a year to the city’s coffers, which it could use to restore the subways, though it is more likely that it would spend it on such frivolities as extending the Second Avenue subway.

This is an example of the old adage, “don’t tax you; don’t tax me; tax the fellow behind the tree.” Or, as someone on Manty Python once said, we should “tax foreigners living abroad.” The best part is that people who live outside of New York City don’t get to vote for New York City politicians or ballot measures, so they can be taxed without their approval (at least if they cross the line into the city).

The argument is that suburbanites use urban resources, so should pay a tax. But they only use those resources through the businesses they work for, and those businesses already pay taxes for those services. Commuters also pay to ride New Jersey Transit and other transportation services and/or tolls to cross the bridges into Manhattan. If the transit services are subsidized, then it’s time to raise the fares, not ask other people to pay for them.

The Times is being hypocritical here. It wants commuters to pay their share, but only some commuters. It doesn’t want the commuters who actually ride New York City subways to pay for them (unless they happen to be non-New York City residents). It only wants to tax “foreigners.” But if we really want fairness, we should get back to the idea that people should pay for what they use and not expect others to pay for it for them.

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6 thoughts on “Make [Some] Commuter Pay Their Share

  1. Sandy Teal

    One thing the large cities don’t do their fair share of is the most expensive part of state and local government — educating the kids. SF and Manhattan are the definition of unsustainable because they don’t have enough children to sustain the city. Even the ones they have, a great many go to private schools unsupported by the city government. The schools the cities do provide are extremely expensive per student and extremely terrible in results.

  2. Maddog

    The City was a Mistake: New York City Subway edition

    http://www.maddogslair.com/blog/the-city-was-a-mistake-new-york-city-subway-edition

    “New York City subways are falling apart. The Metropolitan Transportation Authority has a $38 billion debt and $18 billion in unfunded health-care obligations. Governor Andrew Cuomo and Mayor Bill de Blasio spend most of their time blaming each other for the region’s transportation woes.

    The New York Times thinks it has a solution: “Make commuters pay their share again.” That sounds like a great idea! The people who ride the trains should be the ones to pay for them.

    But that’s not what the Times means. Instead, it wants people who live outside the city to pay a commuter tax to work in the city.”

    People feel entitled to receive “free” services. With the costs of services provided by government at precipice levels, and the value of those services dropping, the entitled feel cheated, and those paying are losing patience.

    New York City is wealthy but in a precarious position. It exists due to a thin veneer of financial businesses which provide their employees the high pay which makes New York City viable. Should these financial companies decide to diversify, geographically New York will come to earth in a hard landing indeed.

    The user of a service needs to pay for that service, if that is not possible with the highly inefficient government providing the service, then the private sector should provide the service or another service which is more desired. Taxing those outside of the taxing jurisdiction for the service is a recipe for Detroitization of the city. No city needs or wants that outcome.

    The city was a mistake. It is likely that the American city will continue to decline except for the cities which are supported by urban growth boundary’s and those will be buoyed, for a while. But in the end, they too shall crash, spectacularly. The self-drive car, the Uber/independent contractor economy, work from home, increasing wealth, and the desire of individuals to live in small groups (100 or so) of people they know well and are likely related to, will drive a renaissance of lifestyle in America, and ultimately, the world.

    The San Francisco Bay Area and all of the rest will also have similar problems. Some of us are old enough to remember back to the hoary days of yore when the tech boom made modem manufacturers kings. The changing technology made any modem producer with faster speed more valuable, but eventually, that ended, and modems became a commodity. Then the modem manufacturers fell back to earth.

    When mono-industry regions suffer the fate of having their industries become commodities, not only will the businesses fall to Earth, so will the region economically, so, it will be with New York’s financial sector, so it will be with San Francisco’s high tech industry. This spasm of change will likely be triggered, and the near perfect triggers today are the looming state and local pension/health care/benefits payments; transit operating costs, and maintenance; and state and local budget crises.

    Mark Sherman

  3. prk166

    So at what point does the debt become a problem beyond just delays?

    https://ny.curbed.com/2017/5/25/15692564/nyc-subway-mta-capital-plan-funding

    Then there’s the matter of how the budget is being allocated. A New York Times report focuses on that issue, saying “the nearly $3 billion of additional funding for the capital plan largely focuses on other projects backed by Mr. Cuomo, who controls the authority.”

    The plan allocates $1.5 billion for a new track on the Long Island Rail Road, about $400 million for electronic tolling at bridges and tunnels, $700 million in additional funding for the next phase of the Second Avenue subway, and $750 million for a program to enhance 32 subway stations.

    But it reduces spending on new subway cars—some of which date back to the 1960s—by $1.2 billion, deferring the expense for a future capital plan. It also reduces spending on subway signals and communications—a common cause of delays—by $38 million.

  4. prk166

    Mr. O’Toole, I would say there’s something rather troubling over this that the New York Times ( NYT ) fails to catch. According the NYT, the average income for someoone living outside of NYC but working in the city was $88k in 1999. In inflation adjusted dollars today, that is $131,110 according to the Burea of Labor Statistics inflation calculator. Yet, according the Aug 2017 op ed by the NYT, the same commuter who lives out of the city but commutes in has an average income of $84,000 in current dollars. That’s a drop of more than $47,000 in 18 years!

    a) It could be good in that it may have dropped because higher income earners working in the city have been moving back into the city. Their high incomes are no longer part of the average because they now both live and work in NYC.

    b) It could be bad in that it may mean that more and more high income workers are no longer working in the city. For example, we know there’s a large contingent of Wall Street types that have been setting up shop in Charleston. How many of the years have settled on working from Charleston and only traveling to NYC when needed? Or look at the growth in financial sector jobs in Minneapolis and Charlotte. Maybe that large drop in income is largely driven by those higher income jobs moving to those and other secondary financial centers.

    I’d be curious how this drop factors into projections for what revenues that NYC commuter tax would produce. They may be grossly overestimating what it would bring in, especially if a lot of NYC jobs are moving more and more to telecommuting. It could give employees extra incentive for their employer to count their residence as their place of work, not the office they occasionally pop into for a meeting.

  5. prk166

    Most importantly the NYT doesn’t seem to acknowledge what they themselves tell the reader, that most of the current capital projects are not driven by what the agency needs but what Albany wants them to do. The NYT not only openly admits that city could use the money for _anything_ that it chooses to do. And it also doesn’t propose any limitations. There’s nothing to say that the city would’t enact this tax and spend it all on adding bike lanes, or parks, or a new arena for the New York Islanders or for an elephant parade every week. Even if the money were earmarked for transit, as the NYT themselves point out, there’s nothing to say it will be used resolve the backlog.

    After all, the money that is available today hasn’t done that. Instead of replacing their equipment from the 1960s, they’re off building a new subway line and adding more track to the heavy raill / freight lines it runs. Pure craziness.

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