A deeper dive into the payroll tax rulingBy
A Nassau County Judge, elected on the Conservative party ticket last year, dropped a bombshell on the New York Metropolitan region early Wednesday evening when he issued a short and sloppy ruling declaring the MTA Payroll Mobility Tax unconstitutional. The tax, which leads to approximately $1.2-$1.4 billion in annual revenue for the perennially cash-starved agency, has been unpopular outside of New York City, but the alternative — higher fares and much less service — is worse. Now we’re left on the precipice of such a reality.
The decision itself — which you can read right here — is short and on shaky legal grounds. Supreme Court Judge R. Bruce Cozzens, Jr., divorces New York State economic conditions from reality and comes to the conclusion that the tax, as challenged by Nassau County, required a home rule message. Here’s the kicker paragraph:
It is not contested that the counties within the MCTD would be affected if there were a decrease in the capability of the MTA. However, it is hard to see how the residents in Buffalo or other upstate areas would similarly be affected. If this matter really is a substantial state concern, than the legislature could have reasonably taxed every county within the state under a general tax law to meet the MTA deficit. Instead, it chose to only tax those counties within the MCTD. This is because it is only the counties within the MCTD that are affected by the continuance of development of the MTA. By the actions of the legislature itself, it has been shown that the MTA payroll tax is only an issue that is of concern to the residents within the MCTD. Therefore, the budgetary crisis of the MTA is not a substantial state concern and the exception to the home rule message requirement does not apply in this case…The court finds that this law does not bear a reasonable relationship to a substantial State concern.
Setting aside the fact that there is no one central government in the Metropolitan Commuter Transportation District that could issue a home rule request for a multi-county tax, Cozzens is charitably off his rocker if he thinks MTA funding isn’t a substantial state concern. Well over half the state’s population is centered in the MCTD and without the MTA, the entire’s state region would grind to a halt. We’re not asking Buffalo to fund the MTA (even though perhaps we should), but the impact of losing transit service downstate would definitely be felt upstate.
Meanwhile, from the perspective of precedence, this ruling, if upheld, could be disastrous. Various other taxes endorsed by the state are levied only in the MCTD, and those have stood for years or, in some cases, decades. Sales taxes, mortgage recording taxes, franchising taxes, fuel taxes — all of these could fall under similar logic to that issued in this misguided ruling. The MTA would be facing a multi-billion-dollar deficit that it would likely be flat-out unable to cover without defaulting on many of its outstanding fiscal obligations.
So where do we go from here? As transit advocates are calling on Gov. Andrew Cuomo and leaders in Albany to do something, the MTA says it will not let the case end here. “We will vigorously appeal today’s ruling,” the authority said in a statement. “We believe this opinion will be overturned, since four prior challenges to the constitutionality of the law making the same argument have been dismissed.”
In my mind, it is indeed likely to be overturned, but the short-term losses are unclear. Cozzens’ ruling simply declared the law unconstitutional; he didn’t stay his own opinion for the politics of it to work out. The defendants will have to ask for a higher court to grant a stay if they want to continue collecting the money during the appeals process, and then they’ll have to go through such a process. It’s not going to take a day, a week or even a month.
This is just another partisan jab at the MTA by a judge elevating politics over the law. It’s another sign that transit will never be on an adequately secure position vis-a-vis funding, and it’s another sign that Albany isn’t doing its part. In my thread earlier, some commenters suggested cutting LIRR service to cover the deficit. The MTA won’t do that, but such a doomsday future is one step closer today than it was yesterday.