Facing another problem, New York City mayor Bill de Blasio has resorted to his familiar response: Don’t reform government; do raise taxes.
At stake is New York City’s increasingly decrepit metro system, which has seen delays increase threefold over the past five years. That system is now in desperate need of upgrades and repairs, but has run out of money.
And so, on Friday, Mayor de Blasio announced a plan to hike taxes on New York residents earning over $500,000 annually from 3.9 percent to 4.4 percent. He claims it will raise $800 million in new revenue each year.
Rather than sending the bill to working families, the mayor said, he is asking the wealthiest in the city to chip in a little extra.
It is liberalism 101: just keeping tapping the wealthiest to pay higher taxes and all shall be fixed.
Sadly, it’s also totally delusional. Because the real issue facing New York’s metro system is not insufficient money, but poor management.
As Johnny Knocke noted last summer at Medium, the Metropolitan Transportation Authority spent nearly $10 billion on employment compensation and retirement benefits in 2015. That’s before any money was spent on the trains, tracks, and stations! The average MTA employee also took home $89,800 a year in 2015, and with many staff not turning up to work, overtime costs are far above average.
Consider one stunning statistic: More than 25 percent of MTA employees took more than 15 days sick leave in 2015. A minefield of other union-enforced regulations require overstaffing of trains and stations, health and dental plans rivaling those of a Fortune 500 CEO, and prohibitions on effective investment.
Then there are the pensions: Knocke explains that since 2009, MTA post-employment benefits have increased each year by 6.4 percent and pension costs by 4.4 percent. To say this is unsustainable is to say that the atom bomb was problematic for inhabitants of Hiroshima.
But all this waste also serves warning to conservatives in Congress as they consider a national infrastructure plan worth tens of billions of dollars. The MTA shows that when unions get involved, the outcomes for taxpayers are exceptionally poor. In response, Republicans should demand the repeal of the Davis-Bacon act (which requires the government to pay union-set wages on infrastructure projects) as a prerequisite of any deal.
Regardless, de Blasio’s tax hike is utterly ridiculous. Manhattan tax rates are already some of the highest in the world, but even if they weren’t, the MTA’s issues are not going away without wholesale reform. That means reducing the MTA’s union power, streamlining its construction process, and renegotiating MTA contracts. And while de Blasio will never embrace serious reform, his successor might. This should be the priority campaign issue for the city’s next Republican mayoral candidate.
