Since the sale of a $238 million penthouse at 220 Central Park South made headlines, calls for a pied-à-terre tax on the second homes owned by the wealthiest of the wealthy have grown louder. A bill has already been introduced by state Senator Brad Hoylman—one that is, unsurprisingly, stalled—and City Council members recently announced that they would introduce a resolution signaling their support of the bill.
And now, it looks like there may be another unlikely—albeit lukewarm—supporter: Gov. Andrew Cuomo’s administration. State budget director Robert Mujica referenced the proposed tax in a Wednesday statement on the MTA’s finances, stating that if other elements of a joint city and state plan to fix the subway do not materialize—such as congestion pricing or legalizing marijuana, which combined could generate up to $17 billion for the MTA—a pied-à-terre tax could pick up the slack.
“If we lose tax revenue generated by cannabis, then we will either need a 50/50 cash split between the City and State, or the pied-a-terre tax, which could raise as much as $9 billion,” said Mujica, although he did note that “we would still have a shortfall.”
The MTA’s 2020-2024 Capital Plan has yet to be submitted, but one major agenda to fix the crumbling subways—NYCT president Andy Byford’s Fast Forward plan—is expected to cost $40 billion.
Cuomo himself even called the pied-à-terre tax the “least objectionable” option, according to State of Politics, should a new tax need to be levied if legal weed doesn’t materialize. (He did, however, note that he’d prefer not to raise taxes at all.)
Still, support for the pied-à-terre tax—which, as proposed, would only affect second homes valued at $5 million or more—is swelling among city and state officials. Some multi-millionaires who own homes in the city have also said they’d support the tax.
“We’re talking about the 1 percent of the 1 percent and those folks can afford to make New York a better place,” state Assembly member Harvey Epstein said during a recent press conference about the City Council resolution. “If we’re going to talk about fairness and equity ... this is one step forward in being progressive—progressive taxation for those who can afford it.”