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Mike BarryEye on the Island

By Mike Barry
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Return Of The Commuter Tax?

Joseph Lhota, who is running for mayor of New York City, has correctly learned one lesson from the 2012 presidential election: 51 percent of voters will support a candidate who backs new or higher taxes so long as these same voters are convinced someone else will pay them.

In his call last month for the restoration of New York City’s commuter tax, which the state Legislature rescinded in 1999, Lhota, a deputy mayor in the Giuliani administration, has found an ideal source for additional New York City tax revenue—people who work in the city but reside elsewhere.

“I think it [the commuter tax’s return] would help tremendously,” Lhota said, in a radio interview with WCBS-AM on what he deemed the “fragile” state of the city’s finances. “New York City didn’t want it taken away...[W]e thought it was equitable and fair to the people who come to New York City, work in New York City, take full advantage of being protected by the greatest police department in the world and the greatest fire department in the world, and we thought it was only equitable and fair that there would be some small little percentage. It was less than one half of one percent.”

To be precise, the commuter tax was 0.45 percent. Yet that seemingly modest figure added up. A Nassau resident earning $50,000 in the city paid $225 per annum. Before the state Legislature got rid of it 14 years ago, then-Mayor Giuliani estimated the city would lose $500 million in annual revenues if the commuter tax went away.

Lhota, a Republican, must know the origins of the commuter tax. Truth be told, it was instituted to help New York City’s government get through a difficult financial time in the mid-1960s.

This temporary tax stayed in effect for three decades, and it took a highly unusual event—a hotly contested off-year election for a Rockland County state Senate seat in 1999—for the Democrats in the state Assembly to approve the commuter tax’s demise. Assembly Speaker Sheldon Silver believed such a move would boost the Democratic candidate’s chances to win  in Rockland (P.S. the Democrat lost). Meanwhile, the GOP had a majority in the state Senate at the time and, given that Republican lawmakers in the state Legislature’s upper chamber came primarily from upstate and Long Island, they were eager to help their constituents, even if it meant antagonizing a Republican mayor of New York City.

Before Lhota became enamored with the commuter tax’s restoration, the conventional wisdom held that his mayoral rivals would hold the Metropolitan Transportation Authority’s soon-to-be enacted fare and toll hikes against Lhota, who served as the MTA chairman in 2011-2012. I don’t think that message will gain traction because the MTA’s new rates go into effect in March, giving voters months to forget who made their pockets lighter. Plus, the MTA is always extracting  money from the populace. It is what they do.

Mike Barry, a corporate communications consultant, has worked in government and journalism. Email: MFBARRY@optonline.net