Written by Joe Rizza Thursday, 14 May 2009 09:55
The Metropolitan Transit Authority (MTA) has a slogan – “Going Your Way.” But it should possibly be changed to “Going in Your Pocket.”
The Senate Democratic Majority has voted to support a bailout of the MTA with a payroll tax that will be applied to all businesses in the areas the MTA serves including Nassau and Suffolk counties.
There is still expected to be a 10 percent fare increase with the bailout. However, the fare increase isn’t as drastic as the 27 percent increase that was proposed without the bailout. Instead of those who use the MTA services bearing the full brunt of the MTA’s financial troubles, the transportation agency will be subsidized by every Long Island employer with the possible exception of school districts.
The payroll tax that had been discussed includes a tax of 34 cents per $100 of payroll. 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 are working out a way whereby school districts would be reimbursed for the cost of the payroll tax.
Currently, commuters traveling from the Roslyn LIRR station to Pennsylvania Station pay $211. for a monthly ticket, $67.50 for a weekly ticket, $9.75 for a peak hour ticket, and $7 for an off-peak ticket.
And so, under the bailout, the expected monthly ticket would cost $232.00, the weekly ticket, $74.25, a peak ticket would cost $10.72 and the off-peak ticket, $7.70.
What may have been holding up the payroll tax is that all Democratic senators may not have been on board. Senator Craig Johnson (D.-Port Washington) initially opposed the payroll tax, but then supported it.
Johnson apparently did an about face on the payroll tax, which, he said, he opposed last month. On April 14, Johnson visited Anton Community Newspapers to discuss the state budget. He said at the time he didn’t trust the MTA. “It seems every time there’s a problem, the MTA cries poverty and says the only way we’re going to solve it is either Albany gives us money and bails us or we’re going to raise fares and cut service,” he said. “I’m not doing an acronym bailout. There’s an AIG and, for me, it’s the MTA. I’m not going to bail out the MTA with people’s tax dollars. I don’t agree with a payroll tax.”
A spokesman for Senator Johnson, Rich Azzopardi, said before the vote on the bailout plan that Johnson would back the MTA bailout if there were language in the bill to provide a timely reimbursement for school districts. Azzopardi said Senator Johnson was initially opposed to the payroll tax because of the effect it would have on property taxpayers, but if school districts didn’t have to pay the tax, it wouldn’t affect property taxes.
Even if a payroll tax were not applied to school districts, it could still affect property taxes. Municipalities could find themselves having to raise property taxes in order to pay for the payroll tax. According to Nassau County Comptroller Howard Weitzman’s office, the county would have to pay the payroll tax and Nassau County has a substantial payroll.
In a statement released to Anton Community Newspapers, Senator Johnson said:
“Last week, the Legislature passed difficult, but necessary, legislation to rescue the Long Island Rail Road and regional mass transit, as well as reform how the MTA functions.
“I was one of the last members of my conference to support to this package. I did so only after ensuring that our schools were held harmless from the payroll tax and that an outside forensic audit and other transparency requirements were included.
“Throughout this process, I have made clear my distrust of the MTA and my concerns about how any proposed plan would affect schools and school property taxes — which make up roughly two-thirds of the average tax bill. At the same time, we had to deal with the reality that a dependable, affordable — and responsible — mass transit system is vital to Long Island.
“This legislation addresses these issues and is the first step toward cleaning up the mess caused by years of mismanagement and lax oversight from previous administrations and legislative majorities.
“Under the Senate Republicans’ watch, funding for the MTA was cut and the authority was allowed to go on a fiscally irresponsible borrowing and spending spree. This caused the MTA’s debt to balloon from $8.6 billion in 1996 to $24 billion today.
“It was disappointing that, despite their role in the creation of this mess, the Senate Republicans were content to take no action on this – or any — plan. Taking their cues from their Congressional counterparts, they offered no alternative proposals, and no solutions. They only offered their opposition.
“To do nothing would have meant massive fare hikes on the Long Island Rail Road and deep service cuts. This included slashing by half the off-peak service on the Port Washington line, the complete elimination of non-Belmont Stakes service to the Belmont Park Race Track and the elimination of personnel from the Floral Park and New Hyde Park train stations.
“They knew this and yet were still content to sit on their hands,” Senator Johnson concluded.
Republican State Senator Charles J. Fuschillo, Jr., who represents the 8th district, and who also is the ranking member of the Senate Transportation Committee, voted against the plan.
In a statement released by his office, Fuschillo said that the $2.2 billion MTA tax bailout plan is a “massive new State mandate that will drive up property taxes, increase taxes on New York businesses and cause the loss of jobs throughout the State. Under the bailout plan, Nassau and Suffolk County taxpayers will have to pay an additional $9 million in combined property taxes to pay for the payroll tax imposed on all of Long Island’s county, town and village governments.
“While it is crucial that we support our mass transit system, this MTA bailout plan fails everyone on Long Island,” Fuschillo claimed. “The payroll tax amounts to a costly unfunded mandate on every Long Island business, non-profit, local government, library, hospital, and school. Ultimately, this tax will be passed onto Long Island’s families who are already overburdened with high school taxes and a bad economy. In addition the fee and fare increases will be a costly blow to commuters and drivers alike.”
Fuschillo’s office also said that the payroll tax would cost Nassau County school districts an estimated $13,321,396 each year. The total impact of the tax on municipalities within Nassau County will be $4,911,370. It is also estimated that the payroll tax will cost the three Long Island BOCES approximately $1 million. The payroll tax, Fuschillo added, does not have a sunset provision; it is permanent.
Fuschillo also said that in time, the payroll tax would mean a 25 percent fare hike for LIRR, subway and bus service. He acknowledged that the Long Island Rail Road, New York City buses and subway fares are expected to increase 10 percent this year, but he added that they would increase again by 7.5 percent in both 2011 and 2013 for a total of 25 percent. In addition, vehicle registrations, driver’s licenses and learner’s permits would cost more, Fuschillo said. Motor vehicle registration and re-registration fees would increase by $25 annually. The payroll tax would also increases the cost of driver’s licenses and learner’s permits by $2 annually. Finally, the sales tax on auto rentals within the 12-county MTA region would increase by five percent.
—Joe Scotchie contributed to this article.