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Fix the Subways
For immediate release: August 17, 2018
Hawkins proposes ecological and progressive taxes to fund $100 billion subway fix
Howie Hawkins, the Green Party candidate for Governor, said today that he would propose a multi-year $100 billion capital spending plan to fix the MTA in his first year of office.
Hawkins said that the $100 billion for these capital improvements should be funded by a variety of revenue sources, including congestion pricing, a carbon tax, land value taxation, and increased taxes on the incomes and stock trades of the wealthy.
The Fast Forward modernization plan proposed by transit authority president Andy Byford calls for $19 billion in capital spending the first five years and $18 billion more the next five years for a total of $37 billion. The Regional Plan Association estimated it will take another $62 billion to extend subway lines to the city’s unserved “transit deserts.”
“My administration will use ecological and progressive income taxes to fully fund a $100 billion capital budget to modernize and expand New York City’s public transit system. The new revenues will stabilize the operating budget and enable free or reduced fares, as many cities around the world are now doing. Lower fares will help struggling working-class commuters and serve as an incentive to use public transit and reduce the negative impacts of cars in the city,” Hawkins said.
“The MTA acts too much like an ATM for Wall Street,” Hawkins continued. “Its debt service from bonding is far too high at 16% of the operating budget. 52% of the capital budget is finance by bonding. It is better for average taxpayers to tax the rich upfront than to borrow money from them and pay them interest for it.”
Hawkins presented his plans at a news conference at the Union Square subway hub, which includes the soon to be halted L line. The station recently reached 104 degrees during the recent heat wave, a condition that will become more frequent as global warming continues.
“Cuomo is more interested in quick photo opportunities than solving the difficult real-life problems that take longer to fix. He has criminally neglected the MTA during his tenure, starving it of funding for desperately needed to modernize the signals and switches. Like other Governors, he has raided MTA funds for other projects. Cuomo and Mayor De Blasio need to stop their public sniping over how much the state or city should invest in the subways and get to work on a practical plan,” said Hawkins.
Hawkins said that if state and city leaders rode the subways on a regular basis, they might understand the declining service riders are forced to endure.
Hawkins described congestion pricing, the carbon tax, and land value taxation as ecological taxes on resource-depleting and environmentally-damaging activities that diminish the finite commonwealth of land, air, water, and life-sustaining ecosystems. Eco-taxes are generally progressive because they shift taxation away from incomes and savings earned by labor.
But Hawkins does not intend to shift all taxation away from income. The share of all income in New York City going to the top 1% has increased from 12% in 1980 to 41% today. Income taxes on high personal incomes, corporations, and stock trades were cut over the same period, while public austerity budgets, including for public transit, have become the norm.
Hawkins called for clawing back the portion of the $10 billion annual windfall to New York corporations from the Trump corporate tax cuts that is not used by companies to raise worker pay or create new jobs. He would end the rebate of the Stock Transfer Tax to Wall Street brokers, which has generated between $6 billion and $16 billion a year over the last decade. He also wants to a more progressive state income tax, including graduated brackets on multi-millionaire incomes, which he said would yield $10 billion a year in additional revenues.
Hawkins supports the congestion pricing proposal in the Fix NYC Higher-Range Plan. Based on an $11.52 round-trip fee into the Central Business District below 60th Street, it will generate $1.5 billion a year. He said Cuomo was wrong earlier this year to pull back from the congestion pricing proposal from his own Fix NYC panel and settle for just a fee on for-hire vehicles.
Hawkins called for land value taxation to capture the “unearned” increase land values due to public investment in transit and other public services, infrastructure, and policies, such as rezoning. Landowners do nothing to reap this increase in land values. Land value taxation taxes the unearned increment in increased land values, but not the buildings and other improvements on the land. New York City land values are worth more than all the plant and equipment in the nation.
Hawkins criticized Cuomo’s proposal in March for value capture through Transportation Improvement Districts because they dedicate the revenues to special district and further benefit the landowners of the district who pay the tax. Hawkins said that revenues from a land value tax should accrue to the city and state governments to be spent for broad public purposes, including mass transit but also public housing and other public services and infrastructure across the city.
Hawkins said a state carbon tax that makes corporate fossil-fuel polluters pay for the damages they cause to air quality and the climate would also generate significant revenue for clean energy investments, including public transit to reduce the greenhouse gas pollution from fossil-fueled vehicles. A recent study showed that a carbon tax proposed by NY Renews – starting at $35 per ton in 2021 and rising to $75 per ton in 2030 – would generate an average of $7.1 billion annually over ten years. After 25% is used as rebate to consumers, it would average $5.3 billion annually for clean energy investments, including mass transit. The Greens helped draft a more robust carbon tax bill (A107/S2846) that was introduced in the state legislature in January. It would start at $35 per ton and rise $15 a year for 10 years to $185 a ton, with 60% of the revenues rebated to low-to-moderate income people.