Cuomo’s Tax-Break Toll

The price of Gov. Cuomo’s plan to revive a vital tax break for non-luxury housing in the city seems to grow by the day — and that’s even before lawmakers in Albany get their hands on it.

Last week, the Independent Budget Office reported that Cuomo’s 421-a tax exemption would cost the city a cool $8.4 billion over 10 years in lost revenue. That’s $1.2 billion ($120 million a year) more than a 2015 plan that later fell apart.

It also eclipses Mayor de Blasio’s version of the break by $2.3 billion ($230 million a year). In January, city officials estimated the gov’s plan would tally just $82 million more a year than the mayor’s.

These are hefty new costs, even for New York. (Pretty soon we’ll be talking about real money.)

Now, tax breaks are generally the worst form of fiscal policy, because those who get them are, in effect, freeloading off everyone else. But New York City real-estate taxes are so onerous, developers simply won’t build anything but luxury housing without them. And lawmakers won’t even consider rolling back the real-estate taxes.

Which makes the 421-a exemption critical if the city wants to see more apartments for lower- and middle-class residents. Trouble is, under Cuomo’s plan, the amount of tax revenue lost thanks to the break is now off the charts. That’s because the plan imposes a new cost on developers — higher wages for the construction unions — and the fatter exemption is needed to help cover that cost.

It’s a tragic tale. After all, the city was getting along fine with the old, cheaper tax break. Yet rather than simply renew it, de Blasio pushed for changes to get more affordable housing. Then Cuomo came along to stir the pot, demanding above-market wages to please the union bosses. Developers balked, the legislation fell apart — and the tax break went bye-bye.

Cuomo’s fix? Sweeten the break, extending it to 35 years and driving up the cost to help cover the higher labor costs.

If lawmakers go along, it would be a win for unions (and for Cuomo, since he’d score points with them). Developers, presumably, would get a deal they could live with. And de Blasio would have the tax break he needs to gin up more affordable housing.

Who’d lose? Look in the mirror.