Cuomo Agrees to Taxi Bill That Adds $1 Billion to NYC Revenue
Governor Andrew Cuomo struck a deal with lawmakers that will let New York City sell an additional 2,000 taxi medallions and permit so-called car services to pick up passengers who hail them outside Manhattan.
The bill will generate $1 billion in revenue for the city and help reduce a $4.6 billion budget gap for the fiscal year that starts July 1, Mayor Michael Bloomberg said yesterday in a press briefing in Albany, the capital, to announce the deal.
“The new law will make getting around town easier, safer and less costly for millions of New Yorkers,” Bloomberg said in a statement.
The agreement caps Cuomo’s first year as governor, during which the Legislature passed a property-tax limit, a bill legalizing same-sex marriage and a tax-code overhaul that raised rates for those earning $2 million or more and cut them for the middle class.
“This is probably for 30 or 40 years a situation that defied solution and in that way it’s fitting that we end this year on this piece of business,” the 54-year-old Democrat said.
The Legislature, which approved the taxi (TAXI) measure proposed by Bloomberg in June, sent it to Cuomo Dec. 9, starting a 10-day clock for him to either veto it or sign it.
Cuomo said the process was “truly peculiar” because it was approved by lawmakers as a “placeholder bill, and everybody was going to get together to work out the plan.”
The agreement requires all 2,000 of the new cabs to be wheelchair-accessible. Cuomo had threatened to veto the legislation unless the new cabs could accommodate the disabled.
Car services, also known as livery cabs, will also be permitted to pick up passengers who hail them on the street in northern Manhattan and the other boroughs -- areas of “nearly non-existent taxi availability,” according to an Assembly memorandum. Previously, only yellow cabs were permitted to pick up fares on the street, while car services were legally limited to calls dispatched by radio.
In each of the next three years, the city will sell 6,000 livery-cab licenses, 20 percent of which will be for vehicles that are accessible to disabled passengers, Cuomo said. Buyers of the accessible licenses will receive grants of as much as $15,000 to retrofit vehicles or buy new ones, he said.
“The governor and I are going to have big smiles on our faces tonight,” Bloomberg said late yesterday. “This is something that was three decades in the making, but tonight it is getting done.”
Fernando Mateo, president of the New York State Federation of Taxi Drivers, said last week that new medallion sales would dilute the value of his members’ investments. The medallions sell for as much as $1 million at auction. The city has about 13,200 medallions.
Allowing “hailing privileges” to extend beyond yellow cabs will hurt drivers who now have exclusive rights to that business, Mateo said before the agreement was reached.
“Once you take away the exclusive right to pick up street hails, the medallion is no longer going to be worth as much as it is now, and that will make it more difficult to obtain financing, as it won’t retain its value,” Mateo said.
The sale of additional taxi licenses may drive down shares of Medallion Financial Corp., which owns medallions and lends money to buyers. The governor’s announcement came the same day Medallion Financial filed with the U.S. Securities and Exchange Commission to sell as much as $100 million in securities. The shelf filing permits the company to register the securities in advance and sell them when financing needs arise or market conditions are favorable.
Medallion Financial gained 11 cents, or about 1 percent, to $11.53 in Nasdaq Stock Market composite trading yesterday. The shares have gained 41 percent this year, compared with a 7.21 percent drop in the Russell 2000 Financial Services Index (RGUSFS), according to data compiled by Bloomberg.
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