MTA Bailout - $1.5 Billion Payroll Tax
On May 15, 2009, Mayor Robert Rothschild and Trustee Nicholas Episcopia attended a press conference held by Nassau and Suffolk County legislators on the recently passed MTA Bailout Bill. Many of our local leaders, including State Senators Dean Skelos and Kemp Hannon, as well as Town of Hempstead Supervisor Kate Murray and Hempstead Councilman Edward Ambrosino, Town of Oyster Bay Supervisor John Venditto, along with Nassau County Legislator Vincent Muscarella, attended the conference
Because the MTA has recently gone from a surplus of $1 billion to a multi-million dollar deficit, Governor Paterson and the NY State Legislature have been attempting to cover this shortfall without an unacceptably large increase in subway, bus, and commuter rail fares. After several proposed plans did not come to fruition, the Legislature voted for a payroll tax on virtually every business, service or municipal employer in the counties serviced by the MTA.
In this economic climate, the new tax on jobs might force businesses to either raise prices or lay off employees, and municipalities to either raise taxes or cut services. This payroll tax of $1.5 billion dollars will also be imposed on churches, synagogues and charities such as the Salvation Army.
Senators Hannon, Skelos, and Supervisors Murray and Venditto condemned not only the tax, but the way it was passed. They firmly stated that the final bill was finished very late in the evening and voted on early the next morning. It passed the State Senate by one vote. Other speakers such as Jack Martins, Mayor of Mineola, commented on how unfair this tax would be to small business owners in our villages, who get no benefit from any of the MTA services.
The effects on our local communities, which are desperately trying to hold the line on tax increases while maintaining essential services, is substantial. The estimated payouts will cost Nassau County $3 million, The Town of Hempstead over $500,000, The Garden City School District over $150,000 and the Village of Garden City approximately $82,000. While there is intent to refund the payroll tax to the school districts, there is no guarantee that it will happen, and even if it does, only the first year's tax payment will be refunded.
Because of its fiscal problems, the County has suspended the sharing of sales tax revenues with all Villages, so that this new $82,000.00 payroll tax burden to our Village comes on top of the loss of our annual share of the Nassau County sales tax which is approximately $60,000.
Our legislators also said that this bailout will benefit an agency that they feel is not being properly managed. They cited factors such as the MTA's purported need for over 400 employees in their Public Relations Department alone, and underscored the fact that a $1 billion surplus has turned into a multi-million dollar deficit, especially at a time when high gas prices have increased the use of public transportation.
One has to ask why the LIRR fare for a Zone Four one-way peak ticket from Mineola or Garden City to Penn Station is $8.50, while the fare from Penn Station to Trenton on NJ Transit is $12.50, when the distance from New York City to Trenton is almost 3 times as far as Mineola or Garden City to Penn Station.
This new $1.5 billion payroll tax will cause harm to our businesses, municipalities, churches and non-profit charitable organizations, as well as all residential and commercial property owners. It is not justified, especially in this economic climate. In the end, we will all have to shoulder this burden. Please write to our local and state representatives and urge them to work for a repeal of this tax, and to force the MTA to mange itself in a responsible manner.
Public Information Committee
Nicholas P. Episcopia Chairperson
