Home MTA Economics An anti-payroll tax website but no better ideas

An anti-payroll tax website but no better ideas

by Benjamin Kabak

Lee Zeldin has made it his singular goal to eliminate the MTA payroll tax. He won his election as state senator representing the Third District on Long Island by campaigning on the issue and has spent a lot of time working toward a repeal. Despite the fact that the state GOP may wait until 2012 to throw its weight behind a repeal, Zeldin isn’t letting up.

Yesterday, Zeldin unveiled the latest in populist rage: a website. His new effort is online at DumpTheMTATax.com, and it features the typical petition and volunteer network that has become so popular with anti-tax, anti-service politicians. “I campaigned for office with an important purpose and promise,” Zeldin said in a press release. “My commitment has been to hold the MTA’s feet to the fire on behalf of the taxpayers of the 3rd Senate District. I will continue to shine a light on all of the ways the MTA can do more with less. My promise is not to rest until the legislature takes action to repeal the payroll tax.”

The new online initiative — actually a part of Zeldin’s own campaign website complete with a “donate” button — won’t gain much traction before the State Senate splits for the summer. So those of us who are fighting for mass transit dollars won’t need to worry too much about the MTA’s bottom line. We know the authority can’t afford to see $1.3 billion in state subsidies simply dry up, but Zeldin thinks he’s found the magic unicorn to solve this problem.

Take a look at how Zeldin thinks the MTA can save the money they currently take in from the payroll tax. He has a list:

  • Eliminate overtime abuse – well over $400 million is spent on overtime annually;
  • MTA should share in enforcement camera fines in MTA bus lanes;
  • Competitive bidding/ privatization of NYC bus system;
  • Public/private partnerships;
  • Reduce outside litigation costs by increasing utilization of in-house attorneys or the NYS Attorney General’s office;
  • Sell some of the MTA’s capital assets currently valued at over $50 billion;
  • Reduce the cash and investment float, which amounts to billions;
  • Reduce the amount of managers and supervisors, which is currently over 10,000 of the MTA’s 66,000 employees;
  • Crack down on pension padding where possible;
  • Cashless tolls throughout the system;
  • Reduced “vacancy/absentee” coverage of MTA Bridges and Tunnels; and
  • Improve process for approving personal and miscellaneous services contracts.

Now, on paper, these initiatives sound well and good, but the problem is that they aren’t new ideas. The MTA, for instance, has trimmed $150 million in overtime spending annually, and at some point, they can’t cut more overtime without incurring significantly more costs through more full-time hires. Overtime, in other words, can save money even as it sounds like a taboo expenditure that politicians exploit for populist points.

Outside of the overtime expenses, Zeldin’s suggestions either generate ones or millions of dollars or are one-off solutions that do not address the MTA’s long-term funding problems. Selling capital assets allows for an infusion of cash now, but once those assets are gone, they can’t be sold again. Cashless tolling will save some money initially, but the authority needs to find billions of savings, not millions.

I’m no fan of the payroll tax. If businesses find it to be a problematic barrier to expansion, the state should do away with it, and I wanted to see Ravitch’s proposals put in place. But what’s done is done. The Senate cannot overturn the payroll tax without offering a better solution, and so far, Zeldin has failed to do so. Reform and repeal will come with a price as money simply does not materialize on its own.

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Eric F. June 1, 2011 - 4:05 pm

“Yesterday, Zeldin unveiled the latest in populist rage: a website”

Ben, I don’t think it’s fair to characterize your work here as an exercise in “populist rage”.

Christopher June 1, 2011 - 4:08 pm

The solutions are typical anti-tax dog whistles. They are not substantial policy and I’m not sure anymore if they should be even treated as such or just laughed at. This is exactly like the Medicare voucher system that Ryan has proposed — except it’s not really a proposal, it’s just a “I’ll say these things half seriously that I haven’t thought about it because it real policy and solutions are tough but hey it gets me re-elected because the voters are also not very good at math.”

It’s frustrating to have a true discussion with people in this matter when they refuse to actually do anything more that rattle off anti-government and anti-tax talking points.

Scott E June 1, 2011 - 4:20 pm

It’s times like these that I regret not going into politics. I could use half the brainpower and earn twice the money/benefits as I do now.

E. Aron June 1, 2011 - 4:13 pm

I’m sure Zeldin and everyone else in Long Island’s 3d District don’t mind that the property values there are through the roof, as they are in the entire tri-state area, thanks to NYC, which relies on the MTA for its continuing existence as an economic powerhouse. I’m sure they can afford the fraction of 1 percent that this tax collects to keep the MTA afloat.

Al D June 1, 2011 - 4:48 pm

or this honker from out east:

Dean Murray

Assemblyman Murray’s Mandate Relief Monday: The MTA Payroll Tax
May 16, 2011

Assemblyman Dean Murray (R, C – East Patchogue) is starting a weekly educational initiative called “Mandate Relief Monday,” to keep New York taxpayers informed of egregious mandates that state government currently imposes on localities and schools, forcing them to increase property taxes on hardworking families and businesses. The first mandate Murray has chosen to address is the Metropolitan Commuter Transportation Mobility Tax, otherwise known as the MTA Payroll Tax.

“The MTA Payroll Tax is one of the largest mandates imposed on Long Island,” said Murray. “This payroll tax is inequitable, forcing the businesses of eastern Long Island to contribute regardless of the fact that their employees may not use the mass transit services. It compromises the bottom line of Long Island’s small businesses and non-profits, who already were struggling to overcome the lingering economic crisis, in order to pay for services that mainly benefit New York City.”

Assemblyman Murray is the sponsor of mandate relief legislation () that would place a three-year freeze on any unfunded mandates on local governments and school districts; require fiscal notes on bills; and require the Mandate Relief Redesign Team to review existing mandates to determine which should be eliminated. He also is the sponsor of , which repeals the MTA payroll tax.

The MTA Payroll Tax was enacted in May 2009 as a means of bridging the MTA’s budget gap. The tax imposes a 34-cent tax on every $100 of payroll for employers in the twelve counties served by the MTA, which include Nassau and Suffolk.

“It is taxes like the MTA Payroll Tax that make New York the most unattractive state to own and operate a business in,” said Murray. “That’s why it is hard for this state to attract viable businesses to bring jobs to this state and help our economy grow.”

“The MTA does not have a revenue problem, they have a spending problem,” said Murray. “It’s time to eliminate this tax and get New York State on the right path to lowering the burden on taxpayers and becoming more business-friendly.”

Donald June 1, 2011 - 7:07 pm

Top business friendly states, courtesy chief exectve magazine ( http://chiefexecutive.net/best.....r-business ):

1 Texas
2 North Carolina
3 Florida
4 Tennessee
5 Georgia

And as we all know, these 5 states have really GREAT mass transit systems just like NY does. Good luck getting anywhere without a car.

Bill June 1, 2011 - 11:27 pm

Oh great, a psuedo-scientific survey conducted by the richest people in the U.S. These are states friendly to THEM. Not the average American.

Andrew D. Smith June 2, 2011 - 10:19 am

Unless you’re rich enough to really enjoy Manhattan, you can live better in any of those states than you can in New York. Two people working at Taco Bell can live a lifestyle in Dallas that two middle management types making $80,000 apiece couldn’t sniff in New York. You’re right that they wouldn’t have great public transit, but they wouldn’t need it.

Bolwerk June 2, 2011 - 11:24 am

That’s a steamy load of crap. Someone making $80k/year in New York is doing quite well – maybe even better than someone making that much in Dallas, since the New Yorker wouldn’t need a car. As for someone making a Taco Bell wage, they might be better off in NYC than they would be in Dallas too; the standard of living would be horrible in either place, but at least in New York would afford such a person a degree of mobility. The only disadvantage to New York, if it’s even a disadvantage, is a smaller living space. Arguably, that is only objectively a disadvantage when you’re middle-middle class and have a lot of kids.

pete June 2, 2011 - 5:22 pm

Car, unlimited metrocard, same price. I can go 10 miles for $2.25 of gas. The only plus of public transit, is no parking costs at the end, but large parts of NYC have free street or free strip mall parking. Unless you walk or bike to work, theres no difference between a car and a metrocard, cost wise.

Benjamin Kabak June 2, 2011 - 5:26 pm

No way. Not even close. Do you pay insurance, registration and maintenance fees on your car? And what happens if you go 20 miles? Still costs one MetroCard swipe on the subway but all of a sudden you’ve raised your gas consumption by 100 percent.

Andrew June 2, 2011 - 10:32 pm

His claim makes more sense (although I still have trouble believing it) for someone who already owns a car and is deciding whether to use it or to ride the subway for a given trip.

The advantage to New York over Dallas isn’t that most New Yorkers don’t have to use their cars – it’s that most New Yorkers don’t own cars in the first place. That’s where the major savings is.

Brian June 1, 2011 - 6:16 pm

What a dumba@#. His quote in which it states that New York must become more business-friendly is baseless. The public transportation network here in New York City is vital to the economy of the city, and if the transportation network here suffers, the economy of the City suffers, and if NYC suffers, the state suffers, because the state depends on the City to provide with the tax dollars it needs. Privatizing the NYC Bus System is the most absurd idea I ever heard. To make it even manageable, substantial fare hikes and service eliminations would have to occur. LI Bus in Nassau is going to have to go through that because it’s so-called leader does not want to fund it properly. How dare he ever propose to privatize the NYC Bus System. He should get slapped for even thinking about that absurd idea, and does he live in city to back it up? Oh wait, no he does not.

Bolwerk June 2, 2011 - 11:41 am

It’s not baseless, but it misses the point. New York is very business-friendly to the niche industries in New York. People often mistakenly think that’s primarily the financial industry, but the truth is it’s more the ingrained real estate developers.

New York should diversify its economy, of course. We’ve missed the boat on a lot of things over the past two generations, not least of all the tech boom. Silicon Valley could have been the Hudson Valley if we played out cards right.

pete June 2, 2011 - 5:24 pm

Taxes, welfare spending, and unions guarantee NY state and the rest of the rust belt will rot for the next couple decades.

Alon Levy June 1, 2011 - 6:25 pm

I actually like the idea of ending the payroll taxes because some employers are in areas where employees don’t take mass transit. Next stop: ending all government spending on untolled roads, because some employers are in areas where employees don’t drive. I’m sure Long Islanders will be happy to see their property taxes replaced with a toll of 5 cents per mile on every road in the state.

(Cue hysterical comments now about how all employers need trucks so all highways should continue to be subsidized, but Long Island doesn’t really need trains to maintain its access to jobs in Manhattan and therefore the LIRR should be paid with other people’s money.)

Donald June 1, 2011 - 6:43 pm

The website is nothing more than a scheme by the senator to raise money. If you type the website into your browser, it re-directs you to zeldinforsenate.com where you can conveniently send him money.

Donald June 1, 2011 - 6:46 pm

When will clueless politicians finally understand that overtime is CHEAPER than hiring new workers? Forget literacy tests, we need math tests for politicians!

pete June 2, 2011 - 5:27 pm

Overtime isn’t cheaper when employees work 160 hours a week according to their pay stub.

paco June 2, 2011 - 12:42 am

privatization of NYC bus system? does he not think we remember two decades ago when it was separate privatized lines? they all ran pretty poorly with little connectivity between lines. I loathed using the Green Bus Lines because it was a complete joke. I hope he’s a one term no body in our political system.

Alon Levy June 2, 2011 - 3:12 am

You can privatize and still maintain seamless fare integration. The Germans and Swiss manage it fine.

Needless to say, the chance that Zeldin knows anything about how trains work in Germany and Switzerland is of the same order as the chance I will win the lottery.

Andrew June 2, 2011 - 10:37 pm

The private bus lines in Queens all accepted MetroCards, with the same fares and transfer policies as NYCT buses. (But they also had discounted off-peak fares, cash only. And paper transfers were valid on NYCT buses as well. So if you were waiting for an NYCT bus at a stop also served by a private line, you could get the discount on NYCT by boarding a private bus, paying the fare in coins, asking for a transfer, immediately getting off the bus, and using your transfer on the NYCT bus. Wacky!)

Larry Littlefield June 2, 2011 - 10:37 am

Interesting that a Long Island State Senator wants to privitize the NYC bus system, but has no suggestions to save money on the far more inefficient LIRR. To many patronage jobs at stake, I guess.

Long Island is a sinkhole of government waste that has become worse and worse over 35 years as NYC, and NYC Transit, have become better. Long Island politicians want NYC to pay for that waste instead of getting rid of it.

Bolwerk June 2, 2011 - 10:59 am

Eh, well, it may be more sinister than that. My guess is there is simply a cultural undercurrent that says cities are undeserving of prosperity and investment. That’s why New York City pays for services in “good” places like Long Island, the North Country, Alabama, and Alaska, but they would never be asked to pay for services here.

It is pretty ingrained in the NYC planning/development/political community too, as can be seen by inept clowns like Seth Pinsky inflict more parking lots, scarcely-moving buses, and malls on us.

Larry Littlefield June 2, 2011 - 11:54 am

Well, you don’t hear any elected officials from NYC complaining about government waste elsewhere. Just pushing for their share of it, and settling for less.

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