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Garden City Demands Repeal of MTA Payroll Tax

Will Cost Village Approximately $100K Annually

As if things aren’t bad enough, local businesses, municipalities and school districts on Nov. 2 had to fork over 34 cents for every $100 of their payrolls to help dig the Metropolitan Transportation Authority (MTA) out of a $1 billion deficit.

For Garden City, this newly instated payroll tax will cost approximately $100,000 a year, according to Village Auditor Jim Olivo, and with contractual increases for village employees on the horizon the tax will only increase.

“We did not even know this was on the radar until the state enacted its budget,” Olivo said.

The tax affects all businesses and municipalities, school districts and nonprofit organizations that have a payroll and hospitals within the areas that are serviced by the MTA, including Nassau County.

Deputy Mayor Don Brudie said the village is being billed as an employer. “This is another attack on our budget,” he said. “We’ve been hit left and right with these charges.”

The deputy mayor urged residents to contact their local officials and demand that municipalities be exempt from the tax.

Garden City’s own Senator Kemp Hannon denounces the tax, calling it impractical and unjust. “It’s an outrage that taxpayers are expected to carry this heavy burden on their backs in order to bail out the MTA,” he said. “It’s especially crucial during this tough economic climate that we seek to create jobs and achieve new ways to increase taxpayer savings, but what does Albany do instead? It levies another tax that will force businesses and non-profits to eliminate jobs and take more money out of the hands of hard working New Yorkers.”

Senator Hannon, who voted no alongside other Republican senators when the MTA bailout was first proposed, said the tax will cost over $1.5 billion in new taxes this year alone, with most of the money coming from cash strapped businesses, not-for-profit groups and beleaguered property taxpayers.

Further, Hannon states, it is estimated that the average family on Long Island will pay an additional $272 per year in new taxes to cover the cost of what the senator calls an “ill-conceived bailout.”

Trustee Nick Episcopia, who attended a press conference with Mayor Robert Rothschild, said many protesters not only complained about the tax itself but the MTA’s tactics to push it through.

“There was somewhere in the vicinity of several hundred pages of this bill that were thrown out at 10:30, 11 o’clock at night and the vote was taken at 9 o’clock in the morning,” Trustee Episcopia said. “The MTA had a $1 billion surplus. It now has a $1 billion deficit. Lord knows how that happened.”

Like Deputy Mayor Brudie, Trustee Episcopia, too, urged residents to write their local representatives and tell them that this tax is just “plain unfair.”

He added, “Every time we have to give a raise or the school district has to give a raise to people, it’s the same situation. This tax just keeps going up and up. What possible incentive is it to those people to control the MTA and get rid of the waste and the nonsense?”

The first installment of the tax was due on Nov. 2 for the period covering March 1, 2009 to Sept. 30, 2009. The next due date will be Feb. 1, 2010 for the period covering Oct. 1, 2009 to Dec. 31, 2009.

For 2010 and beyond, the due dates are as follows: April 30 for the period covering Jan. 1 to March 31; July 31 for the period covering April 1 to June 30; Oct. 31 for the period covering July 1 to Sept. 30; and Jan. 31 for the period covering Oct. 1 to Dec. 31.

For school districts, the payment schedule is a bit different; the first installment was due in September. When the payroll tax was first mentioned, school officials protested, saying that adding a payroll tax to school budgets would lead to increases in property taxes. State lawmakers in Albany agreed to reimburse school districts for the cost of the payroll tax. No guarantees, according to Senator Hannon, however, were written into the law.

The impact of the payroll tax on the Garden City School District totals $255,547 and on the Elmont School District (which includes Stewart Manor schools) totals $189,796.

MTA officials say the bailout is aimed at reducing the impact of commuter fare increases. Long Island Rail Road commuters were facing a 27 percent increase in fares; that’s been lowered to a 10 percent increase, which went into effect June 17 (monthly tickets from Garden City to Penn Station increased from $185 to $204).