Streams

Medallion Sale Revenue in Upcoming Budget May Turn into Fiscal Unicorn

Monday, June 18, 2012

WNYC

As the city’s budget deadline looms, questions remain about whether a billion dollars in revenue from the auction of 2,000 yellow medallions — now held up in court — was a wise projection by the Bloomberg administration.

Professor Edward Rogoff, an economist with Baruch College who has studied the taxi industry, doesn't think so.

"It was premature — there is no question about it, it was premature. The taxi industry has historically been a very difficult industry to make changes in and this just confirms that," Rogoff said.

Mayor Michael Bloomberg admitted on Monday that if the court challenge were to survive it would be difficult all around.

“A billion dollars is real money in terms of what’s discretionary. It’s a very big percentage of our money and it would require us to have fewer employees.”

Bloomberg’s proposed budget comes in at $68.7 billion.

He added he believes the city would ultimately prevail in court and be allowed to proceed with the auction.

Earlier this month, a State Supreme Court judge issued a temporary restraining order against the city's taxi plan, including the medallion auction, in response to three separate lawsuits filed by fleet owners and lenders.

In a written statement on behalf of Speaker Christine Quinn, City Council spokesman Justin Goodman said, “We have expressed our concerns about the consequences the court proceedings on the city’s taxi medallion sales could have on fiscal 2013 budget. In the absence of any definitive resolution, and with only a few days left to wrap up the budget, we are preceding with assumption that the issues will eventually be resolved favorably.”

While the potential gap of a billion dollars is making elected officials at City Hall nervous, the missing revenue wouldn’t be a major problem for many months since the budget spans a year—from July 1, 2012 to July 1, 2013.

Professor Rogoff doubts the mayor and the council’s budget optimism will pay off any time soon.

“If I had to bet, I would bet against it,” he predicted. “This is an industry whose regulation has been dominated by the 13,000 or so taxicab medallions for a long time and that situation remains.” 

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