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would likely be reimbursed for taxes, but even that relief doesn’t appease state Republicans who want the measure repealed entirely.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.