The president of the Hampton Luxury Liner and Classic Coach on how he went from being an angry citizen to bringing a suit against the state over the Metropolitan Transportation Authority’s “Payroll” Tax.

How did you change from an average outraged taxpayer to filing a lawsuit against the MTA?

The final straw was when I came to grips with the tax. It made me really angry that I would end up paying $20,000 a year to subsidize the most corrupt, inefficient and irresponsible government agency. The MTA receives tremendous amounts of money from New York State taxpayers. I am being asked to subsidize a government funded competitor who is also a tax strain. There is a 45-year documented history of the MTA’s inefficiencies.

There is the famous story of the $7 million dog house. They have 84 security dogs. They bought a property in Duchess County for $1 million. It cost $6 million to build the building [to house the dogs].

The taxpayers are subsidizing all of this. In 2008, the MTA spent $13.5 billion. They took in $5.9 billion in service fees. The balance, $7.6 billion, was made up by the taxpayers. The money is going into a money pit.

In our lawsuit, there is a description conducted by the Manhattan Institute on the salary abuses in the MTA. Almost 8,200 MTA employees make more than $100,000 a year with about half of those making more than $250,000 a year. They have a base salary but they get bonuses and overtime. It is amazing burning taxpayer money like this.

You have described the MTA “payroll” tax as “illegal” and “unconstitutional.” In what ways do you believe this law is illegal and unconstitutional?

Firstly, any law which applies to only a portion of the counties of New York State is a special law and has certain requirements, one is a home rule message. The state legislature failed to get a home rule message, which essentially is a request from the chief executive of that county. Take Suffolk County for example. [Suffolk County Executive Steve] Levy would have to have written a letter to the legislature requesting this tax. The alternative would have been to have a 2/3 vote and that didn’t happen.

The efforts to repeal the law aren’t going to work. The only way to beat this tax is for it to be declared unconstitutional. [According to the state constitution] the law requires that all authorities be self-sustaining. The MTA has never been self-sustaining.

In the Eisenhower administration, a law was passed saying the federal government wasn’t allowed to directly compete with private business. The MTA is getting funds from the federal government.

The lawsuit has created quite a stir and received attention from regional and state publications. Do you think the legislators are closely watching the progress of the case?

They are taking it very seriously. The state hired one of the most expensive law firms in New York City [Nixon Peabody LLP] to defend them, which will ironically be paid for by the taxpayer. They are a very politically connected firm. The MTA thinks it’s okay to use them instead of the attorney general or their own [in-house] legal council. I am using a country attorney. I don’t need additional council because we are up to the task. The only way we are going to lose this thing is if it is a political decision instead of a legal decision.
Have you heard of anyone else bringing forward a similar lawsuit?

No I haven’t but that would be great. There is one major thing that someone needs to do. Someone needs to sue the MTA board. The board members have to be fiscally responsible for the MTA … The payroll tax was supposed to bring in around $1.8 billion. The [state] comptroller said [the projections] are $500 million below expectations. They will collect $1.3 billion. I have identified three New York City projects that will use about 92 percent of all the funds. They are coming out and making all of these cuts on Long Island and all of that money is going to New York City.
When you started the Classic Coach service in 1976, did you notice riders were already displeased with the MTA service?

Sure, I had a consulting job in New York City and I used to ride the railroad two-and-a-half hours each way. There were many days I couldn’t get a seat. Now, I sell a luxury service. We are also opening a pick-up and drop-off point in Sag Harbor this summer. When you buy a ticket on my bus you are guaranteed a seat. I remember all the times I stood on the train without a seat. I can’t think of anyone that has anything nice to say about the MTA, who rides it on a regular basis. Where is all the money going?

Do you support Assemblyman Fred Thiele, Jr.,’s legislation to create the Peconic Bay Regional Transportation Authority?

Absolutely. I want to call [the MTA’s], bluff. First of all, I think changes should be done in a competitive environment. Whenever you don’t have competition you will see patronage and waste. The MTA is a business model of influence peddling.

How do you think the state should handle the MTA debt?

I think the state should let the MTA go into bankruptcy. They should privatize a portion of it and let the department of transportation take over the management of it. It costs almost $11 to cross the Throgs Neck Bridge. Once you get out of New York City you don’t see bridge tolls like you do in New York. Long Island gets screwed every single day and it has to come to an end.

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