HOW TO FIX THE SIGNALS
With about $20 billion over 25 years, NYC's subways could get modern, communications-based signals on all 22 NYC subway lines.
But right now, just $2 billion is set aside in the MTA’s capital budget to get these new signals on a handful of lines. The MTA has also given themselves over 50 years to make these upgrades and is doing nothing to expedite its plan. At a City Council hearing in May 2017, MTA officials hedged on implementing communication-based train controls, saying maybe a better idea for the subways will come along.
New Yorkers cannot afford to wait for something better to come along. We need a commitment from the MTA today that it will invest in the MTA's most critical need: upgrading our centuries-old signal system.
The MTA needs to raise $18 billion to fill this gap -- or about $800 million per year, over the next 25 years. There are plenty of ways to raise this revenue, and any combination of these options could get the job done.
fILLING THE fUNDING gAP
By simply making the City’s tolling system fairer – reducing tolls that are too high and adding and restoring tolls where traffic is worst and transit options are plentiful – we can generate the revenue we need to maintain, modernize, and expand our aging transit system and improve our road and bridge network, creating 30,000+ new, local, annually recurring jobs in the process.
Congestion pricing can generate over $1 billion per year – well over the $800 million per year needed to update the signals.
Close the Carried Interest Loophole
The "carried interest loophole" allows hedge fund managers to pay a substantially reduced federal tax rate on much of their income. Across the political spectrum, from Bernie Sanders through Mike Bloomberg to even Donald Trump, there is broad agreement that it is absurd to give a special tax break to private equity and hedge fund managers.
Mayor de Blasio has proposed a tax on wealthy New Yorkers to pay for improvements needed to address NYC's subway crisis. While New York State has some of the highest inequality in the country, our tax system continues to be regressive. The wealthiest households pay a lower share of City and State taxes than middle-class or low-income families.
The Mayor's plan would raise about $700 million to $800 million per year – exactly the amount we need to upgrade signals.
Reinstate NY's Commuter Tax
Every day, 811,000 suburbanites commute to NYC for work. New York State's "Commuter Tax," which was eliminated in 1999, was a 0.45% tax on these commuters' paychecks. It would cost a typical commuter with an income of $84,000 about $378 a year, or about a dollar a day to help pay for the City's transit crisis.
If it were in place today, the Independent Budget Office estimates it would generate about $922 million per year.
How to Raise $20 Billion for the MTA
Unfortunately, the State not only controls the MTA, but virtually all of NYC's options to raise the money we need to fix it. Even if the City wanted to shoulder the cost to replace the signal system, only the state can raise taxes, implement tolls or close tax loopholes to raise revenue.
Unless the State gives NYC greater autonomy when it comes to raising its own revenue (as suggested by the Independent Budget Office's George Sweeting), fixing the signals will require strong leadership from the Governor, the State Legislature and the MTA. As the 2018 State elections approach, we must insist that our State leaders create a serious plan for long-term investments and to have the political courage to fund those improvements.