Home MTA Politics Under fire, MTA’s payroll tax revenue seemingly secure

Under fire, MTA’s payroll tax revenue seemingly secure

by Benjamin Kabak

Now that Gov. Andrew Cuomo has pledged to overhaul New York’s tax code, Senate Republicans are chomping at the bit to do away with the controversial payroll mobility tax. As The Daily News reported last night, Senate leaders may even find a way to modify the tax without impacting the MTA’s bottom line.

“We have had some discussions about modifications on it — in certain ways for certain businesses — where it may be a little onerous,” one state source said. “It wouldn’t be money removed from the MTA because the MTA needs the money.”

According to the News, small businesses and parochial schools would likely be reimbursed for taxes, but even that relief doesn’t appease state Republicans who want the measure repealed entirely. That is, of course, an untenable position for the MTA. “It generates about $1.4 to $1.5 billion a year and it’s very important that we maintain that level of revenue to main our level of services,” the incoming MTA CEO and Chairman Jospeh Lhota said in an interview. “[The State legislatures] set tax policy; it’s their decision. I’m not a state legislator; I cannot support it one way or the other.”

With all of this politicking going on, Daily News columnist Pete Donohue has called upon the New York GOP to “drop the farce” of a payroll tax repeal effort. Donohue takes Sen. Jack Martins to task for his uninformed and misleading comments concerning the payroll tax.

“The idea that the MTA could provide anything remotely close to a safe and affordable service after such a financial pounding is fantasy,” Donohue writes. “That’s fitting because the whole Republican proposal is based on the fictional notion that the subway system is overly and unfairly subsidized by the suburbs.”

As Donohue notes, LIRR riders pay 47.8 percent of the railroad’s operating costs while NYC Transit riders are on the hook for 58.6 percent. Combine that reality with the fact that it’s nearly impossible to replace $1.4 billion in annual revenue, and the payroll tax should be safe. If it isn’t, that will spell trouble for our transit system.

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6 comments

Larry Littlefield December 5, 2011 - 2:12 pm

Repeal it and let the MTA collapse now, while Generation Greed is around to experience it.

Look how younger generations and city residents are being gamed. Yes we have service cuts and deferred maintainance, and yes we have an end to the capital plan once no one will lend to the MTA anymore, but we kept (most of) the payroll tax!

Over time, moreover, most of the suburban MTA revenues are diverted to suburban roads while NYC pays for the corrupt LIRR, too.

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SEAN December 5, 2011 - 2:48 pm

Repeal it and let the MTA collapse now, while Generation Greed is around to experience it.

They wont even care since to generation greed, the MTA & more generally spending money on public transit is nothing but government waist.

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Hank December 5, 2011 - 4:45 pm

Exactly. If it’s not the Matlock Expressway, they just don’t care….

On a more serious note, I’m glad to see the (usually farcical) Republicans in Albany actually being called on their efforts to kill the goose that lays their golden eggs (NYC), particularly by their own voices (the News).

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Larry Littlefield December 5, 2011 - 8:11 pm

Doesn’t matter. So they don’t repeal it. They just slash NYCT and send more money to the suburbs. Then they threaten to repeal it again, and the cycle repeats.

Until the subway is down to three lines that cover 120 percent of their operating and capital costs, and the LIRR covers 10 percent of its costs while offering free bagels in the AM.

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Alon Levy December 5, 2011 - 10:12 pm

Won’t matter; the decision makers in Generation Greed have already cashed out. There are so few examples in world history in which a sea change actually hurts the old elite that caused it that they’re legendary: the French Revolution’s guillotining of the nobles, the Russian Revolution’s killing of the Czar and his family, the executions of the Nazis in the Nuremberg trials. But Stalin and Mao died old and in control, Pol Pot and Ho Chi Minh died old, the big slaveowners made a living in the postbellum South while the poor whites suffered, and so on. The world’s not a morality tale in which the people who caused the pain will suffer any of it.

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On the importance of transit to New York City :: Second Ave. Sagas December 6, 2011 - 12:44 am

[…] as compared with 38,000 at Bedford Ave. alone on a typical weekend. So as suburban representatives take aim at MTA funding mechanisms, remember that the city cannot survive without its subway, let alone thrive. Share Tweet […]

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