Bloomberg's Tax Grab

Even though Mayor Mike Bloomberg lost his chance to impose billions of dollars in new taxes through his congestion pricing tax plan, he was able to maintain a 1% sales tax that would have sunset July 1 without state legislative action to extend it.

During the 1970s fiscal crisis, the state increased the sales tax by 1 percent and dedicated the proceeds to pay off the debt incurred by the Municipal Assistance Corp. The promise was that when the MAC debt was eliminated, so would be the incremental sales tax.

Well, the MAC debt ended; the 1 percent sales tax was to sunset on July 1, 2008. Mayor Bloomberg, however, asked Albany to halt the sunset and reimpose the sales tax so that it could be used for general city operating expenses.

There's nothing implicitly wrong with extending a tax - so long as there's proper debate and public dialogue, especially among those who'll be paying the tax. But the tax was extended indefinitely with no discussion, debate or even hearings.

The 1% sales tax, in addition to other state and local sales tax on New York City sales, would have sunset July 1 because the purpose for which the tax was imposed - to fund the Municipal Assistance Corporation to repay debt incurred during the 1970s, was completed. The debt had been retired, and the tax should have sunset.

Mayor Bloomberg got the Legislature to extend the tax, meaning that consumers will continue to feel the pinch to the tune of $1.2 billion per year ad infinitum. That revenue will go to the New York City general revenue.

Instead of taking the opportunity to improve the business climate and reduce spending, Bloomberg chose the easy way out and got the state to maintain a tax that should have been allowed to sunset.

In the alternative, Bloomberg could have gotten the Legislature to mandate that the 1% sales tax revenues goes to fund mass transit - a prospect that would have seen a dedicated revenue stream for projects like the Second Avenue Subway, the 7 Line, and other worthy mass transit initiatives. That he chose not to do so shows that he was never fully interested in dedicating funds to mass transit to relieve congestion and was more interested in raising revenues for City coffers.

The Post calls him a pick-pocketer. That isn't far off the mark.