New 25-cent tax on online orders could fund repairs to the BQE

BY CAROLINE SPIVACK

Online shoppers in the city would have to pay an extra 25 cents per online order under a new state proposal. e plan seeks to raise funds for repairs to the Brooklyn-Queens Expressway and other strained local transportation infrastructure.

Legislation introduced by state Sen. Andrew Gounardes seeks to leverage the explosion of package deliveries by requiring online retailers to charge the additional tax to raise an estimated $226 million annually for city infrastructure. More than 2.3 million packages are delivered in the ve boroughs each day—up from 1.5 million packages before the pandemic.

Nearly 90% of those packages are delivered by truck, the city’s Department of Transportation said.

e surge of package delivery trucks on the city’s roads has in turn increased polluting truck emissions and wear and tear on heavily trafcked routes.

“Our streets are clogged, our highways are weakened, and our neighborhoods are polluted because of the volume of online deliveries made each day in New York City,” Gounardes said in a statement. “ is bill is a common-sense solution to our city’s infrastructure problem as e-commerce retailers struggle to keep pace with our demand for overnight deliveries.” e funds raised through the tax would go to a “dedicated New York City capital fund” that could be bonded to provide as much as $1 billion per year for city infrastructure projects, according to the bill’s text. ose funds could also pay for alternatives to roadway freight, Gounardes said, and would be used for repairs to the crumbling BQE, which needs $1.5 billion worth of work to rehabilitate stretches of the expressway damaged by illegally overweight trucks. e state Legislature opposes much of Gov. Kathy Hochul’s budget bailout for the cash-strapped Metropolitan Transportation Authority, including raising the payroll mobility tax on downstate businesses, increasing fares from $2.75 and boosting the city’s annual contribution to the authority by $500 million.

Gounardes said a new city capital fund could also help address the environmental hazards of increased truck tra c on the city’s streets due to the growth of lastmile delivery facilities, which are plentiful in parts of Brooklyn and Queens and in the south Bronx.

Gounardes’ bill comes amid a urry of proposals from state lawmakers seeking to create new revenues for the city’s transportation infrastructure amid budget negotiations.

Lawmakers have suggested alternatives, such as creating a residential parking permit program for the towers in the Sixth Avenue corridor. Could these be made into affordable housing? Like what happened in the Financial District? We have also seen it happen at the Woolworth Building, but that was at the high end, and we need affordable housing this time around. But I also do think some of these neighborhoods will have to get more desirable to be residential areas. Do people want to live at 52nd Street and Sixth Avenue? I’m not sure. The real industry is made up of a lot of smart people in the city, and they will nd a way to make incentive programs work. But the programs can’t skew too far into an area where you can’t make any money. Without a doubt, when the state and city get together on this, I think that will unleash a lot of activity.

It seems like developers and lawmakers are at each other’s throats over housing regulations. Is that typical? There’s always been a love-hate relationship between the public and the people who build buildings. The developers need to make a living, and the agencies are interested in squeezing the most amount of affordability out of every square foot of space. There needs to be a balance. The City Council wants to lower the eligibility for projects to 40% [of the area median income], which means charging less rent. But landlords are already strapped coming out of the pandemic. Sometimes lawmakers can’t see the forest for the trees and need to be reined in. And “good cause” eviction laws seem to impinge on property rights, so will probably all be challenged. It is going to be an interesting couple years.

How will the rest of 2023 play out?

I think it will be slow. I think there will be projects for people who already have the land. But what will the incentives be? I have one client looking for land in Lower Manhattan for a condo. He’s now negotiating the contract to buy the land. But he’s also a long way from ling the condo plan. He wants to see what kind of tax breaks Albany comes up with.

So I think it will remain slow. We went through many years when there was a condo on every corner. But I don’t think those days are coming back anytime soon.” ■ city and adding a transit surcharge on Uber and Lyft rides in Manhattan’s central business district.

Gounardes’ bill purposefully limits its reach to city taxpayers in an attempt to make the new charge more palatable to state lawmakers, rather than imposing the fee regionally or statewide. If green-lighted, the 25-cent tax would be listed on customers’ online shopping orders so they are aware that the state is charging the fee, not retailers. “ is bill represents a creative solution to New York City’s seemingly intractable last-mile warehousing and infrastructure problem,” the text of the bill reads. “By imposing a negligible 25-cent surcharge on the online delivery packages … we can begin to truly invest in alternative modes of freight transportation while securing needed repairs for the BQE.” ■