With New York City’s public transit in utter shambles, the state might have found one more reason to consider a pied-à-terre tax.
Gov. Andrew Cuomo’s budget director, Robert Mujica, raised this possibility on Wednesday in a statement regarding revenue projections for the MTA, and what additional revenue sources would be needed to satisfy its capital budget of at least $40 billion. These include congestion pricing ($15 billion), an internet sales tax ($5 billion), and a cannabis tax ($2 billion).
“If we lose tax revenue generated by cannabis – then we will either need a 50/50 cash split between the City and State, or the pied-à-terre tax, which could raise as much as $9 billion,” Mujica concluded. “And we would still have a shortfall.”
The idea has now received support from the city as well. “We need to tax the wealthy more,” Mayor Bill de Blasio said before a press conference on Thursday. “Now if the governor is saying he thinks there’s a way to additionally get a pied-à-terre tax, I’m all ears.”
De Blasio has previously indicated a preference for a millionaires’ income tax instead, but that proposal has not received support in the legislature.
A pied-à-terre tax on on wealthy non-residents is hardly a new idea in New York. A 2014 proposal from the Fiscal Policy Institute, which envisioned a surcharge for absentee owners of apartments valued at $5 million and up, was roundly criticized by real estate insiders, including the Real Estate Board of New York. More than a decade ago, the Bloomberg administration had also considered funding the MTA with some kind of real estate tax.
Soon after Ken Griffin’s record-breaking penthouse buy at 220 Central Park South in January, City Council Speaker Corey Johnson took to social media to call for a pied-a-terre tax. Johnson is likely to for mayor in the 2021 election, and is refusing contributions from real estate developers. [Bloomberg] — Kevin Sun