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New York’s water and sewer tax hike: a hidden tax on city residents

New Yorkers love to complain about taxes, including but not limited to property taxes, sales taxes, and income taxes. Now all city residents – regardless of whether they live there cooperatives or apartmentsrental buildings or single-family homes – may soon have a new tax to complain about: hidden taxes on water and sewerage services which could more than increase their bills 8% this summer.

Mayor Eric Adams announced a plan to revive a financing mechanism that pushes the city to charge its own financing mechanism Water sign more than $1.4 billion in rent over four years to lease its water and sewer systems from the city, according to budget documents reviewed by Rahul Jaina deputy comptroller of the state of New York, The New York Times reports. That of the city Ministry of Environmental Protectionin turn, now proposes that the Water Board increase the rates for homeowners and landlords 8.5% in July, according to a proposal from the board.

The proposed rate hike – which, if approved, would be double last year’s rate hike and the highest in 14 years — would only pay part of the rental costs. Some of the rest will likely come from funds that typically finance capital improvements to the water and sewer system, potentially leaving the city more vulnerable to critical outages just as an unusually bad hurricane season is expected to occur.

The funding gimmick had been used by New York City for decades, but was rejected in 2017 (only to resurface temporarily and partially during the crisis). Covid pandemic before it disappeared again). The then mayor Bill de Blasio said the city was “righting a wrong” — which would suggest Adams is now trying to undo a right.

“It’s all legal, but legal doesn’t mean it’s right,” says James Gennarothe municipal councilor who heads the Commission for Environmental Protection. Gennaro, a Queens Democrat, described the funding mechanism as a “hidden tax” – a way to extract money from New Yorkers without raising property or sales taxes.

Experts note that water payments are a regressive tax, in that they are imposed on homeowners regardless of their income, while renters see the payments passed on to them in the form of rent increases.

“It’s robbing Peter to pay Paul,” said Eric Goldstein, the senior attorney and New York City environmental director at the Defense Natural Resources Council. “The bottom line is that this is happening at a time when the city’s water and sewer needs are great and growing.”