Don’t let the state pick our pockets

If there is one thing all New Yorkers can agree on, it’s that our subways need help — fast. Delays underground cost New York City $400 million a year in lost economic output, and aboveground, our buses are the slowest of any big city in the nation. This transportation crisis affects us on a human level as well as an economic one.

The question is, how do we get to where we need to go to modernize our infrastructure?

It starts with money. There are numerous proposals on the table to help address NYC Transit’s long-term funding needs, including the Fix NYC congestion pricing proposal.

But there is one idea being floated in Albany that should cause alarm to all of us — the version of what’s called “value capture” in the governor’s executive budget proposal.

As a general rule, “value capture” is a legitimate method for financing certain capital projects.

Here’s how it works. Whenever the MTA invests in a major new transit infrastructure project within the city, it would have the ability to claim some portion of the additional property taxes that project helps generate in what’s known as a “subdistrict” around the new infrastructure.

When the details are negotiated by the state and the city on a caseby-case basis, it makes good sense. It’s already been used successfully for the Hudson Yards development as well as the East Midtown rezoning, which provided financing for improvements to Grand Central Terminal.

But this proposed plan is less like “value capture” — and more like a revenue hostage-taking.

To begin with, there are several technical flaws with the proposal. The size of the proposed subdistricts could extend well past the boundaries of where any feasible economic benefit is likely to result.

Nor would the city have any meaningful say in crafting a new transit project. Instead, we in the five boroughs would be stuck with an up-or-down, yes-or-no choice: either veto a new transportation project and a subdistrict, or approve it but give up revenue on terms dictated by the MTA. That’s not fair.

Not only could subdistricts be created retroactively, but new ones created would never expire, meaning the MTA would have a right to our tax revenues long after the incremental revenues necessary to fund a project have been spent. In fact, forever. That’s ridiculous.

But the biggest problem in the state’s proposal is the size of the financial dent to the city. The MTA could siphon off as much as $300 billion in our tax base over the next 30 years. Since the property tax is the city’s single biggest revenue source — and its most stable — it’s critical to our ability to govern ourselves.

Passing a law that would take away such a big share of the city’s budget would make New York City virtually a ward of the state, and hamstring our ability to meet our local service commitments and future needs. It could also add risk to the city’s credit rating, costing us more to borrow money.

We shouldn’t be forced to choose between funding schools, police or senior centers and a new transit project that could help the five boroughs grow and develop.

Stripping the city of $300 billion over the next three decades would come at the expense of everything from trash pickup, to snowplowing, to services that help our most vulnerable at a time when income inequality has never been greater. That’s a false choice. We all know that a functioning transit system is the nerve system of the local economy — tying together suburbs, residential neighborhoods in every borough and business districts. Since Metropolitan Transportation Authority Chairman Joe Lhota introduced his emergency plan for the MTA last year, no one has been more vocal about the need to fund it than I.

But not all revenue is created equal, and this value capture proposal needs to be dismissed, with prejudice. More than anything, it embodies the state’s usurping local authority — and local revenues — purely at the city’s expense.

Instead of going down the perilous value capture track, we should continue to explore congestion pricing and other long-term funding sources. I’ve also proposed a state transportation bond act of $3 billion to $4 billion that would provide a much-needed infusion of cash for the MTA’s current capital plan, as well as for upstate transportation infrastructure investment.

But the state can’t be sticking the city with the bill without a real say in future transportation projects. And that’s what’s happening here.