Says Revenue Shouldn’t Go To City’s General Fund
Public Advocate Bill de Blasio assailed the proposed 5.6 percent water rate hike as unjustified, and called on the Water Board and City Hall to release key documents that will definitively determine if revenue from the water system is being diverted to pad the city’s general budget.
In a letter to the Water Board- which is appointed by the mayor-de Blasio exposed how ever increasing water rates have been fueled in part by the Board’s excess “rent” payments to the city.
For years, the rent payments covered the cost of serving debt from water-related infrastructure-and nothing more. But since 2005, de Blasio added, those payments have exceeded debt obligations by a total of $700 million, with that revenue instead flowing into the city’s general operating budget.
Those excess payments have helped fuel a doubling of water rates since 2007, he noted. According to a policy brief issued by the Citizens Budget Commission, “the current basis for setting the rent is arbitrary and has been a contributing factor to rapidly rising prices in recent years.”
“When the mayor says he hasn’t raised taxes, he’s really only talking about the taxes you can see. In truth, homeowners and businesses are getting socked again and again with hidden taxes like these water rate hikes,” said de Blasio. “For decades, the water system only charged customers what it needed to cover its costs. But now, anyone who pays a water bill is sending more and more of their money into the City’s general budget. It’s wrong and it has to stop.”
“The cost of water has now become a challenge to the middle class. This rapid and steady increase in water bills continues to take a toll on the working class family with no relief on the horizon,” said Kathy Masi, President of Glendale Civic Association. “I am very disheartened to watch how the City continues to make it almost impossible to live in New York by the constant abuse of taxing. I applaud Mr. de Blasio’s efforts on behalf of the working class.”
According to research by the Office of the Public Advocate, the price of water per 100 cubic feet will have skyrocketed from $1.81 in 2007 to $3.57 if the current increase is approved- resulting in a doubling of the price of water since 2007. Part of that increase is the result of higher rent payments made by the Water Board to the City. The board makes annual rent payments to pay down debt from water and sewer infrastructure projects undertaken by the City. For years, rent paid covered the service on that debt-and nothing more. But since 2005, annual rent has nearly doubled, from $109 million to $196 million in 2012-even though the cost of servicing old debt has actually declined significantly. “While I fully support the notion that the Water Board should raise enough revenue to fund investment in a fullyfunctioning water and sewer system, it should not raise additional revenue to pad the City’s general operating budget,” de Blasio said in a letter to the Water Board. “Yet, it seems that this is precisely what has occurred since 2005 when the Water Board began paying more in rent than the City’s debt for building the water system required.”