Home MTA Economics Protesting a payroll tax, but no better solution

Protesting a payroll tax, but no better solution

by Benjamin Kabak

Since Albany approved a .34 percent payroll tax designed to fund the MTA’s budget gap, the State GOP has protested the tax at every turn. Take, for example, this short Newsday article. Alfonso Castillo reports:

Republican state lawmakers gathered Thursday with business owners and nonprofit groups to call for the MTA to repeal its recently enacted employer payroll tax…The tax was the foundation of a massive state bailout plan that pulled the Metropolitan Transportation Authority out of an unprecedented $1.8 billion operating budget deficit earlier this year.

“It’s an outrage that taxpayers are expected to carry this heavy burden on their backs in order to bailout the MTA,” said Sen. Kemp Hannon (R-Garden City), who joined other members of the Senate’s Republican Long Island delegation at a rally in front of the Roosevelt offices of the United Cerebral Palsy Association of Nassau County – one of many nonprofits hit by the tax.

Representatives from other organizations, including several public libraries and education centers, also blasted the tax, which will first be collected next month.

A few weeks ago, Jay Walder expressed his support for the payroll tax. It is, he said, “absolutely essential” for the future fiscal health of the MTA.

So on the one hand, we have anti-tax Republicans representatives, and on the other hand, we have pro-transit representatives who know that the MTA needs funding. At this point, the pro-transit crowd will win, but the payroll tax has created something of an untenable position for the MTA.

Somehow, transit has become a politicized venture in our city and country. Some politicians support pro-transit, pro-pedestrian measures while others are pro-car and anti-tax. The truth is that without transit, New York City would not be a functional urban center. Our streets could not handle the auto traffic that a sub-par transit system would generate, and businesses would lose time and money to inefficient transit.

Yet, still people protest fees, fares and taxes. At some point, the pro- and anti-transit forces will clash, and it will get ugly. For now, the payroll tax will stand, and the MTA will get its money. What happens when the capital plan comes up for budgeting and when the MTA next has to go, hat in hand to Albany, though may not be pretty. Unless a better funding solution arises, New York City will suffer for it.

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10 comments

Christopher October 16, 2009 - 9:31 am

I wish we’d figure out a way to uncouple “pro-car and anti-tax.” These positions can’t be held at the same time, as we all know that being “pro-car” means huge subsidies for cars (that’s tax dollars). I’m not sure how to phrase it — pro-car, pro-tax? pro-car, anti-transit subsidies? — but we let the other side win if we continue to suggest cars and low taxes are complementary positions.

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SEAN October 16, 2009 - 9:57 am

If you are pro car then you are pro tax because cars +road capasity =sprawl. With sprawl more demands are put on local governments wich require more tax revenue to function. Is it a shock that republicans from Long Island the basis of the sprawl econemy would be anti tax knowing full well that taxes keep the sprawl machine alive.

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Nathanael October 18, 2009 - 1:31 am

In fact, at this point, the Republican Party is anti-EVERYTHING. Whatever it is, they oppose it. I don’t even think they’re pro-car, just anti-things-working.

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Niccolo Machivelli October 16, 2009 - 10:43 am

Taking politics out of transportation is like taking orgasm out of sex.

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Jonathan October 16, 2009 - 12:39 pm

Ben, can you elaborate on your statement: “At some point, the pro- and anti-transit forces will clash, and it will get ugly”? I don’t think we’re talking Ragnarok here, with blood spilling in the streets (or on Empire State Plaza), but just more scanty MTA budgets and more deferred maintenance and more pleas to the Feds for assistance.

I don’t think politicians are the idiots you make them out to be. In my opinion, the city pols have even more to answer for since they refused to support congestion pricing and East River tolls; without that funding, how are we city residents going to keep getting to work?

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Marc Shepherd October 16, 2009 - 12:45 pm

Actually, they are worse idiots than Ben makes them out to be.

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Benjamin Kabak October 16, 2009 - 1:00 pm

I should have written more about that statement in the post, Jonathan, but in a nutshell: It will get ugly because at some point the MTA will need more money than the politicians can provide through these stop-gap measures, and upstate GOPers will dig in against downstaters who want to institute congestion pricing and East River Bridge tolls. Plus, city interests will align on either side of the divide generally with small business owners failing to understand how and why they would benefit from the pricing and tolls despite the increased fees. You’ll either see some major legislative logrolling which won’t be good for the state or massive MTA cuts which also won’t be good for the state. It has the potential to get very ugly.

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Nathanael October 18, 2009 - 1:34 am

Eventually the upstate GOPers, most of whom are appalling hacks, will be kicked out. Any help in supporting upstate Democrats is appreciated.

Beyond that, where do they get off opposing the self-interest of upstaters? Seriously, most upstaters only visit New York City via bus or train, and would never have to pay the congestion pricing or East River Bridge tolls. I guess there are Westchester and Long Island GOPers who might actually drive to NYC sometimes, but people who are actually from upstate simply don’t drive to NYC.

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Alon Levy October 18, 2009 - 8:14 pm

The opposition comes from both suburban Republicans and suburban Democrats. In round 1 of CP, the chief opponent was Richard Brodsky (D-Westchester), who complained that CP would be unfair to his richest-in-the-state district. He was joined by a couple of city Democrats who were pissed that Bloomberg had just donated millions to the state GOP to get it to support CP.

In round 2, the opposition was more diffuse. The State Senate’s GOP just didn’t like the tax increases. Together with a couple of suburban Democratic defections, this doomed the bridge tolling bailout.

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Mike Nitabach October 16, 2009 - 12:59 pm

Don’t the “pro-car” people realize that they should also be “pro-transit”? The more other people use mass transit and thus the less people use their cars, the less congested the roads are for the “pro-car” people to drive on.

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