REBNY Opposes “Transit-Maintenance District” to Help Fund MTA

As New Yorkers grapple with ideas to improve a subway system in serious need of a dedicated revenue stream, public policy makers must take caution to carefully vet and consider the potential solutions. One trial balloon clearly does not stand up to rigorous analysis.

At a recent Crain’s panel discussion on mass transit, a proposal was offered  to create a “transit-maintenance district” that would function similarly to a business improvement district – i.e., it would collect fees that would be specially designated to keeping the subway system in good shape.  A proponent of this idea would like to see the City increase commercial rent by $1.50 to the core business district below 60th Street – this additional rent would go directly to the MTA.

While we agree that the MTA is in need of a capital injection, we want to make this very clear: REBNY wholeheartedly opposes this ill-advised measure.

First, the transit system extends citywide and serves millions of riders daily. Where is the equity in imposing this additional burden on a segment of the beneficiaries of mass transit.

Second, commercial businesses in this part of town already pay the commercial rent tax to the tune of $800 million a year. The office buildings in this area are already paying more than $5 billion in real property taxes.

Third, a portion of the mortgage recording tax which is approximately 1 billion last year is also dedicated to mass transit.

Perhaps most importantly, this proposal does nothing to discourage driving.  Simply imposing a fee will do nothing to relieve congestion, and worse, it will do nothing to reduce the harmful impact of greenhouse gas emissions.

Any proposal designed to address congestion ought to actually address congestion or at least have the benefit of being environmentally-conscious – otherwise, a City with far too many fees already runs the risk of adding yet another needless burden on its businesses.

A large area of commercial space subject to the proposal will be a part of the Midtown East rezoning. This is significant because the recently approved rezoning requires buildings that take advantage of the plan to fund mass transit improvements.  The “transit-maintenance district” proposal essentially asks those businesses to pay twice.

Moreover, an additional fee on commercial businesses adds just another burden on the shoulders of New York City businesses. Worse, it will drive up office rent, placing further stress on our businesses.

It is clear that the MTA is facing severe challenges that impact New Yorkers. REBNY always supports practical policy proposals centered on supporting New York’s transportation networks.  For instance, we have long supported calls for the Gateway Project and supported more federal infrastructure spending for the region.

In this case, however, it is important to consider the unintended consequences that would be created if this real estate fee proposal were enacted. Objective analysis reveals that it would not reduce congestion, help the environment, or improve the MTA.

Simply put: there are better ways to help New York’s mass transit riders and protect the environment. For that reason, REBNY opposes this measure.