De Blasio Proposes NYC Tax Surcharge on Wealthy for Schools

New York City Public Advocate Bill de Blasio, a probable Democratic candidate for mayor next year, proposed a tax increase on residents earning more than $500,000 a year to pay for extended school hours.

De Blasio, 51, elected in 2009 to the watchdog post, told the Association for a Better New York today that the surcharge would raise $532 million for all-day prekindergarten classes and extended hours in middle schools. He said the city needed to boost education funding to keep pace with emerging nations such as China and India.

“Some of you might say this is an interesting place to come and make this proposal,” de Blasio said as he addressed the group of business executives in Manhattan. “This is a room full of people who know what smart, strategic investment looks like, and this is the kind we need.”

The issue of expanding early education arose in negotiations this year between Mayor Michael Bloomberg and the city council. Both sides agreed to restore about $150 million for child care that the mayor had cut from the 2013 budget. On Sept. 24, Bloomberg announced the city would add 4,000 full-day pre-K seats for the 2013-2014 school year.

De Blasio’s proposal received support from some child- advocacy groups and rejection from Kathryn Wylde, president of the Partnership for New York City, a group of more than 100 chief executives.

Future Foundation

Of the 68,000 4-year-olds in the city, only 20,000 attend full-day pre-K, with another 38,000 enrolled in three-hour programs, de Blasio said. Ten thousand students that age get no pre-K education, the public advocate said.

“We have to get all 68,000 served if we want to lay a foundation for our future,” de Blasio said.

De Blasio’s plan would impose “yet another tax on high earners before we know how Washington will handle the federal fiscal crisis, specifically the threatened elimination of state and federal tax deductibility and the tax increase that is scheduled to go into effect on Jan. 1,” Wylde said in an e- mail. “Hopefully there will be some more realistic ideas for funding our education needs.”

Stephanie Gendell, a spokeswoman for the Citizens Committee for Children, described it as a “bold, expansive plan to ensure quality,” and said her members would applaud de Blasio for it.

Five Years

The surcharge would run for five years, de Blasio said. Residents with more than $500,000 in income would pay a tax rate of 4.3 percent, up from 3.876 percent. Someone earning $750,000 a year would pay an additional $1,060; a $1 million earner would see a $2,120 increase; and those making $2 million would pay $6,360 more.

The tax would affect about 1 percent, or 44,200, of city taxpayers, with an average income of $2.7 million, de Blasio’s office said. To close budget deficits, the city imposed a surcharge on incomes above $150,000 per household from 2003 to 2005 and increased property taxes 18.5 percent.

If approved by the City Council and state legislature, the surcharge would provide $291 million for pre-K; $190 million for extended middle-school classes and $50 million for leased space and other expenses, de Blasio said.

Other potential candidates for mayor include council Speaker Christine Quinn; former Comptroller William Thompson, the 2009 Democratic nominee; Comptroller John Liu; and Manhattan Borough President Scott Stringer. Liu’s office cited a June proposal in which the comptroller called for higher tax rates on the city’s wealthiest 1 percent, with reductions for the rest.

Bloomberg’s Response

The proposal, Liu said then, “is intended to promote shared prosperity so that the benefits of economic recovery are spread to the 99% more evenly than they were the last time around.” Liu said the measure would raise $250 million to $1 billion in revenue.

The mayor is founder and majority owner Bloomberg News parent Bloomberg LP. His term ends next year.

“He wants to drive everybody out of the city, but that’s OK; he’s a good guy,” Bloomberg said of de Blasio’s proposal during a Brooklyn news conference today. “Every part of the city you’d like to have more. The Department of Education is who I’ll rely on to decide what we need.”

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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