De Blasio wants to tax the rich to fund NYC subway improvements

New York City Mayor Bill de Blasio on Monday proposed raising taxes for the wealthiest New Yorkers to increase funding for the city's deteriorating subway system.

His plan, an increase in the tax rate on an individual's income above $500,000 to 4.41 percent from 3.876 percent, would also fund half-price bus and subway rides for up to 800,000 of the city's poorest residents, he said.

The plan comes as the mayor and New York state's governor, Andrew Cuomo, squabble over who is responsible for the nation's largest subway system, which has suffered a surge in delays.

"Taking responsibility is the first step toward a solution," Mr. de Blasio told a news conference, emphasizing that the system is controlled by the state.

Mr. Cuomo controls the Metropolitan Transportation Authority (MTA), the state-run corporation that operates the subway and bus system. He has the power to close it down without consulting the mayor, as he did before a winter storm in 2015.

Cuomo says the city should contribute more from its own coffers since it technically owns the subway system, a point echoed by newly appointed MTA Chairman Joe Lhota.

"The good news is that Mayor de Blasio has acknowledged New York City's significant ownership of the New York City Transit Authority and the fact that new funding is needed to modernize the subway system," Mr. Lhota said in a statement. "The bad news is that the Mayor has not acknowledged that the MTA needs funding today."

De Blasio said his plan would raise an additional $700 million in 2018 for the subway and bus system, and that the additional revenue could be used to borrow more funding even sooner.

About 32,000 of the city's wealthiest residents would see their taxes rise, de Blasio said. The plan would need approval from the Republican-controlled New York Senate, which is averse to tax increases.

The city contributes about $1.6 billion a year toward operating costs, on top of the nearly $6 billion that comes in from New Yorkers and visitors using the system. The city has also committed to giving about $2 billion toward the MTA's $32.5 billion long-term improvement plans, while the state has committed about $9.3 billion.

Only 63 percent of subway trains have arrived on time this year, down from 85 percent six years ago, according to MTA data. In June, a subway derailment injured 34 people.

This story was reported by Reuters.