The Tax Plan That Wont Die

Once again, Mayor Bloomberg and the political elites in New York City are proffering his congestion pricing tax. Skyrocketing energy costs continue have the effect of lessening traffic at the bridges and tolls coming into the city.

Revenue losses due to the slowing economy are forcing Bloomberg to contemplate additional taxes, not spending cuts. The MTA is looking at additional fare hikes in the next two years. This is the ongoing recipe for disaster that the New York City liberals have been providing for years. Instead of reducing costs, they seek to raise taxes to solve all the problems that governments have with balancing their books.

Indeed, as I've previously warned, congestion pricing will cause economic havoc that Bloomberg chooses not to notice. Every dollar taken out of a commuters pocket is a dollar not spent somewhere else that makes someone a profit that gets paid in taxes and fees.

By focusing on the congestion pricing tax to fund the MTA and balance its books, it shows that the MTA is truly not serious about dealing with the problems within the agency as well. There is a lack of openness about its accounting, and its ability to manage capital construction projects. Fulton Street is an absolute disaster because the MTA was unable to contain costs or justify its grandiose design. South Ferry isn't completed, and the status of the project remains a mystery.

Projects that should taken months drag out into years, increasing costs exponentially. The courts should have broken the transit workers union after striking in violation of the state's Taylor law, but chose not to and the city ended up agreeing to a contract that puts the union's interests ahead of that of the City.

Even some of the most ardent foes of congestion pricing acknowledge that the current problems seem to be reinvigorating the debate, though they wonder why that idea — and not other potential revenue sources — gets all the chatter.

“Clearly I think that on many levels of the political class, this has support that other taxes, for example, the millionaires’ tax, doesn’t,” said Assemblyman Richard L. Brodsky, a Westchester Democrat who was a leader in opposing the plan. He was referring to a Democratic proposal, opposed by Gov. David A. Paterson, to raise taxes on the wealthy.

“It’s an issue of fundamental fairness,” Mr. Brodsky added. “The millionaires’ tax raises more revenue solely from the super rich. Yet the political class in New York City, the mayor’s office being the head of it, comes back with congestion pricing again.”

Mayor Bloomberg has said that he sees no alternative. “Congestion pricing will come, in New York and lots of other cities, because it is the only way where you were going to do the two things that you need to do: reduce people driving and find money for mass transit,” the mayor told reporters at the National Conference of State Legislatures in New Orleans last week.

The reason that people are reducing driving is because they are unable to afford driving, and raising the prices will reduce the number of people coming into the City - period. That means less economic activity at a time when the city's fiscal condition is highly dependent on Wall Street. In other words, congestion pricing will increase reliance on Wall Street - a cash cow that right now is making a sucking sound because of the current market jitters and the mortgage mess.

Congestion pricing always was, and is, a fundamentally unsound tax and spend policy that lowers economic activity. The fact is that the high energy prices are already showing what would happen if congestion pricing was enacted. The only thing is that Bloomberg doesn't think New York City is getting its cut of the higher energy costs. That's why they're continuing to push congestion pricing.