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.”