Proposing a suburban tit-for-tat with the payroll tax

When state Republicans won a partial repeal of the MTA-supporting payroll mobility tax in December based on some vague promise to “replace” the lost $320 million that should go to the authority’s coffers, I warned of the dangers of budging. By relenting even a little without identifying another source of dedicated funding, Gov. Andrew Cuomo and his allies in Albany signalled a willingness to give, and opponents of the tax were likely to demand an even greater repeal. Now, that prediction is becoming a reality.

In Brookhaven, New York, yesterday, noted payroll tax opposition leaders Senator Lee Zeldin and Assemblyman Dean Murray called upon the state to fully repeal the payroll tax for “all counties, towns and villages outside of New York City.” The new measure — essentially similar to an effort last year that did not survive Sheldon Silver’s assembly — would eliminate the tax as it is levied on municipalities with large payrolls and libraries around the area. In essence, state representatives want the state to stop levying taxes on its own governmental subdivisions.

Using the same tiresome and ill-informed rhetoric that led this coalition to proclaim victory in December for what should be viewed as a defeat, the politicians spoke at length about the need to save our small municipalities for the taxation evil that is the PMT. we are taking the next step with the Martins-Zeldin bills to exempt all municipalities outside New York City, as well as all libraries throughout the MTA region. Assemblyman Murray and I are working hard with our Senate and Assembly colleagues to even further eliminate this ill-conceived tax on jobs,” Senator Lee Zeldin said.

Martin, the Assembly sponsor, spoke to similar talking points. “Last year, we were able to repeal the MTA payroll tax for roughly 80 percent of businesses. Unfortunately, this hidden tax still hurts far too many organizations, including libraries, local governments and municipalities. It’s a job killer and the legislation Senator Martins, Senator Zeldin and I are proposing will finally rid our job creators and communities of this onerous tax,” he said.

Meanwhile, local officials too decried the bill. “The repeal of the MTA Payroll Tax for counties, other municipalities and medium to large size businesses will serve as an economic boost for the Suffolk County economy and our region,” Suffolk County Executive Steve Bellone said. Somehow, some way, the leader of Suffolk County believes that defunded transit — the thing that makes his area economically viable with New York City so nearby — will help boost his county’s economy. It defies reason.

So I have a proposal for Lee Zeldin, Dean Murray, Steve Bellone and the others who stand behind them: For every dollar they earn back by repealing the Payroll Mobility Tax, the MTA shall cut Metro-North and Long Island Rail Road service by an equal amount. If they want New York City to bear the funding burden for suburban rail — as it already does to a far greater extent than they believe — then let’s cut their service.

In a way, this is a self-defeating proposal. Cutting LIRR and Metro-North service will serve only to weaken, and not strengthen, the New York economy. That, however, is a point lost to these gentlemen, ostensibly elected to serve their constituent’s interests. As with national plans to defund transit investment, this move reeks of political folly, and only when it is too late — when the MTA must slash service and spike fares beyond an acceptable level — will voters realize that these politicians are doing them no favors.

It may cost taxpayer money to subsidize transit, but suburban counties will not be desirable destinations without its train access to the heart of the region’s job centers. Defunding that service, repealing a key source of revenue without finding a steady replacement, harms everyone, more so than the payroll tax ever will.