Property Grunt

Thursday, March 31, 2005

MTA property taxes: REBNY comes to the rescue part 2

Here's an update on the MTA budget situation that was reported in a previous entry on the PropertyGrunt.

The State legislature reached an agreement on funding the MTA capital
plan. As previously reported, the Board urged the rejection of a
proposal to impose a 10% surcharge on all LLC, S corporations and similar
entities. The next proposal called for a 3/10th of one percent increase
in the Transfer Tax or Mortgage Recording Tax. The Board raised
objections and argued that the funding for the MTA Plan should not be placed
entirely on the real estate industry. We suggested that a portion of
the ¼ of one percent sales tax scheduled to expire this year be continued
and dedicated to the MTA.

A compromise was reached by Assembly Speaker Silver, Senate Majority
Leader Bruno and Governor Pataki, with frequent consultation with REBNY,
that will continue 1/8th of one percent of the expiring sales tax for
the MTA, projected to generate 237 million dollars and 1/20th of one
percent increase in the Mortgage Recording Tax, generating about 50
million dollars. These Taxes will be imposed in the 12 downstate MTA

There will also be an increase in DMV fees statewide to complete the
MTA package.

Although we understand that higher taxes are never welcome, we believe
the MTA capital plan is critically important for the city's future and
our ability to operate and sell New York's real estate. We also
believe the proposal is fair and reasonable.

What boggles the Grunt is that the transit system is a vital part of the New York City infrastructure because when it breaks down it affects commuters and hurts the economy. Yet I have not heard the MTA, Pataki and Bloomberg asking Washington for funds. Where are Hilary Clinton and Chuck Schumer? I thought these two were the big power players in D.C?

Its not as if New York City has been gorging itself on Washington pork, according to an article in the Daily News, New York is a top terror risk but ranks 49th in aid while Wyoming, a state known for the home where buffalo roam is in need of economic gastric bypass with all the funding it gets due to the blind funding giveaways. If you compare New York to Wyoming and break down the numbers it comes down to $38.31 per person in Wyoming while New York receives with the $5.47 per New Yorker.

It's these types of policies that forces New York City to cannibalize its own population for the funding that is needed to maintain the system. Which is one of the reasons New York City as become one of the most expensive places on earth. So please buyers, don’t blame the brokers for the high prices. There is a lot more going on. I wish brokers had this type of pull since it would make my job a hell of a lot easier.