Lhota open to ‘more equitable’ payroll tax replacement


The MTA and Dutchess County have a tenuous relationship at best. The local politicians rail against the MTA whenever it can, and one Poughkeepsie newspaper ran a factually incorrect and ideologically misguided editorial a few months ago calling for the MTA’s dissolution while repeating the tired two-sets-of-books trope. It isn’t friendly territory.

So yesterday, Joe Lhota, head of the MTA, spoke at a Dutchess County Regional Chamber of Commerce breakfast. He offered up a full run-down of the benefits the MTA provides to the region and spoke at lenght about both the need for subsidies and how the MTA relies less on those subsidies than many similarly situated transit agencies.

For full coverage of his back-and-forth, check out Dana Rubinstein’s full report; Lhota says some interesting things about people who commute into the city and Metro-North’s relationship with the overall economic health of parts north of the city. I’m most concerned and intrigued by what he said of the payroll tax:

“I need to find a way … whatever happens with the payroll mobility tax, to find a substitute for it that’s more equitable and more fair,” said Lhota. “But one thing you should know, is that the money … coming from the payroll mobility tax is not going to New York City. It’s actually going to the counties.

“But be that as it may, I will work with Senator Saland, I will work with the assemblymember, on trying to find ways to make the payroll mobility tax or its replacement more equitable,” he continued. “We do need the money. As I mentioned before, there’s no commuter railroad in the country that can work unsubsidized. So we need to find some form of subsidy that is more transparent, more direct, more equitable, than the payroll mobility tax.”

The payroll tax opposition never goes away. Even now, Long Island representatives are trying to whittle it away, but Lhota’s point is one that seems to go unheeded in Albany. The MTA cannot afford to lose the money from the payroll tax without an adequate replacement. Be that congestion pricing, tolling or other revenue streams, the money has to come from somewhere. Or else those upstate economies will suffer as services are lost. I’ll leave it to you to define “more equitable.”

Categories : MTA Economics

23 Responses to “Lhota open to ‘more equitable’ payroll tax replacement”

  1. Marc Shepherd says:

    Citizen ignorance about transit isn’t just a Dutchess County problem. It really doesn’t matter where you go: people think the MTA is inefficient and costs to much, but please don’t cut my service, thank you very much.

    The mobility tax is a blunt instrument: every county that receives any MTA service pays the same rate. That must be inequitable, since the MTA service map is basically an accident of history: trains run where the railroad barons of yore happened to decide to lay down tracks, decades ago. It would be a remarkable coincidence if such a tax were equally fair to everyone. There must be huge swaths of Dutchess County where hardly anyone ever takes a train, but they pay the same as the town of Poughkeepsie, where there is regular service.

    The MTA could be more transparent. How much money does it lose on running trains to Dutchess County? How much does it receive in tax revenues from there? It would be interesting to know if the Chamber of Commerce would prefer to have less service, or if they have some other clever way of paying for it.

    • AG says:

      You are right… if they see how much per capita is being lost by them up there… they might change their tune.

    • Bolwerk says:

      More than likely, the usual narrative is backward; that is, in fact, it is most likely the inner counties getting screwed to cover the outer counties.

      But, yes, it’s unfortunate that there is no way to confirm. You’d think it would be fairly easy to approximate rider stats for tickets sold on the commuter railroads since each has an origin and destination built in. I wonder if they seriously just think that it would piss off pols who get by on “blame NYC” and “blame the MTA” rhetoric.

  2. Eric F says:

    Right, because what could be more equitable and more conducive to economic growth than a tax on wages that is invisible to the employee. Sheesh.

  3. jim says:

    It’s hard to figure out how much the MTA loses on service to Dutchess County. If it didn’t have to run into Dutchess County on the Harlem Line, for example, it could simply extend the third rail to the last station in Putnam County and retire its entire Harlem Line diesel fleet. So should the entire cost of maintaining that fleet be charged to Dutchess County?

    • Marc Shepherd says:

      Well, extending the third rail to the last station in Putnam County might not be so “simple,” and diesel equipment is also used on parts of the Hudson and New Haven lines. So I don’t think the cost of the diesel fleet could be attributed entirely to Dutchess County.

      • Walter says:

        While not all of the cost of that equipment could be attributed to Dutchess County, a large part could, especially in conjunction with also-problematic Putnam County. The Danbury and Waterbury branches that are the main users of diesel equipment on the New Haven Line are fully subsidized by the state of Connecticut, and a few locomotives and Bombardier cars (the ones with red stripes) are also owned by CT and placed into “pool service” with the MTA-owned equipment.

        The few New Haven Line mainline diesel trains are pretty much used for positioning with the branch service (i.e. the last train to Stamford may use a diesel train that will become an early train out of Danbury the next morning. The branches also do not have the frequency of service of the upper Hudson Line, and so use only a fraction of the equipment.

        Metro-North could easily curtail service to Peekskill and extend electrification there. I know Connecticut would love to get its hands on that diesel equipment: they are currently installing signals on the Danbury branch, and could theoretically run improved service if they only had more equipment.

      • Alon Levy says:

        56% of inbound weekday riders at unelectrified Metro-North stations board in Dutchess County.

  4. Spendmore Wastemore says:

    Why not just eliminate service to areas which don’t want it, expressed by opposition to paying the MTA tax.

    Love to see what Long Island NIMBYS do if – let’s make it when – the LIRR shuts down.

    • Alon Levy says:

      Sheesh. Don’t shut it down. Just use it as an excuse for cheap subway extensions to Hempstead and West Hempstead. Those areas are fairly dense and have very short stop spacing anyway.

      • Spendmore Wastemore says:

        I’m not quite serious about LIRR; tone doesn’t come across over the net.

        But … two months of no LIRR and a wall of traffic on the LIE would give them a clue. That third track would start moving pretty soon after 😉

        • Alon Levy says:


          On the other hand, isn’t there already a wall of traffic on the LIE? (Maybe JetBlue would run ISP-JFK flights as a gimmick, which would still be slower than a bicycle.)

          • Spendmore Wastemore says:

            Yeah, and if they don’t pay for transit it’ll be the Great Wall.

            OTOH, a Manhattan-Montauk bike path sounds pretty good. Bit of a long day tho.

            • Bolwerk says:

              I doubt it will make on iota of difference in the “wall,” at least not in peak conditions. There comes a point where you just can’t squeeze anymore vehicles into a given amount of space.

              Where the effects will show up are in stunted economic activity and out-migration to other states.

      • Henry says:

        We splice off the Port Washington branch, extend it to the G via Hunterspoint, and voila, before they know it we’ll have a brand new subway extension on the cheap.

  5. AG says:

    I’d like to see the balance of payments from Dutchess County relative to NYC. Something tells me per capita Dutchess receives more aid. That said all roads are subsidized in some form… which I can never understand why ppl forget that when these debates come up. I’m pretty sure the increase in the taxpaying population in Dutchess county over the past 20 years is in great proportion to rail service on Metro-North. If that did not exist… Dutchess (as admittedly beautiful as it is) would be another “dying” upstate county.

  6. Billy G says:

    Self-paying services provide for the fairest fare.

  7. Andrew says:

    Don’t forget that Richard Ravitch proposed a payroll tax and bridge tolls as a package, and warned not to try to implement one without the other.

    This is why.

  8. Al D says:

    Ridiculous, so the top earners (1%) ride MNR and the idea is to have outer borough residents subsidize them with bridge tolls (i.e. Sam Schwartz’ dumb plan). How can somebody even write that unless they are 1 of the Upstate v. Downstaters!

  9. Josh says:

    “More equitable” means I pay less and you pay more, of course.

  10. Nathanael says:

    “More equitable”?

    How about restoring progressive taxation of income? The millionaires’ tax, statewide, would do nicely.

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