East End politicians praised a ruling last week by the New York State Supreme Court calling the Metropolitan Transportation Authority tax on employers unconstitutional.
The decision was made last week by State Supreme Court Justice R. Bruce Cozzens and was the result of a suit brought by Suffolk, Putnam and Nassau counties, as well as towns and villages. Justice Cozzens ruled the tax was unconstitutional because a home rule message was not required from affected municipalities when it was enacted in 2009. The ruling was also made because the tax was never passed with a two-thirds vote in both houses of the New York State Legislature. The surcharge requires that employers in the MTA’s 12 counties pay a $0.34 tax on every $100 of payroll.
In 2011, the New York State Legislature permanently eliminated that payroll tax for small businesses with an annual payroll of less than $1.25 million. The same year, the legislature also eliminated MTA payroll taxes for those who are self-employed and earn less than $50,000 per year. School districts, public and private, were also exempted from the tax in 2011.
Last Friday, New York State Assemblyman Fred W. Thiele, Jr., a Sag Harbor native who also serves as the attorney for the Sag Harbor Village Board of Trustees, lauded the decision.
“This ruling provides us with more evidence for the case we’ve been making all along – the MTA payroll tax is an unfair, job killing tax,” said Thiele. “Here on the East End, we are paying for a service we barely get.”
On the East End, as in other counties, government officials have railed against the payroll tax since its inception, charging that regions like the Twin Forks receive little benefit from MTA service, with infrequent train schedules, particularly during the slower winter months.
“The next step is to permanently repeal MTA payroll tax,” said Thiele. “We can no longer place this burden on our counties, towns, villages and businesses. Eliminating the MTA payroll tax will put Long Island back on the path to economic prosperity. It’s time for the Legislature to act.”
New York State Senator Kenneth P. LaValle agreed in a message he sent to constituents last week following the ruling.
“I always believed the MTA Payroll Tax was an unconstitutional, job killing tax, which should have never been passed in the first place,” said LaValle. “I am thankful that the New York State Supreme Court agrees and has ruled it unconstitutional.”
“The MTA re-directed several billion dollars since 2009 from regional jobs, because it was unable to balance its own budget,” LaValle continued. “While small businesses have been struggling to make ends meet, owners have been forced to cut pay, hours and sometimes even close their doors because of this tax. This is a tremendous victory for Long Island taxpayers. The MTA Payroll Tax is not only unconstitutional but also a great burden on the economy of Long Island and suburbs north of New York City. We must support our nation’s largest mass transit system, but we can’t be reckless with how we go about that important mission.”
Suffolk County Legislator Jay Schneiderman, a Montauk resident whose office is in Sag Harbor also supports the ruling.
Suffolk County residents already paid more than a quarter of a billion in taxes annually to subsidize the MTA before the new payroll tax added another $97 million for a grand total of nearly $350 million in taxes, said Schneiderman’s office in a press release issued last week.
Since 2009, Suffolk County has been paying approximately $3.5 million annually as a result of this unwarranted tax, his office estimates.
“This tax has been unfair and should have never been implemented,” said Schneiderman. “The tax has been anti-business and anti-economic development for all Suffolk residents. The East End is desperately underserved by the MTA and the Long Island Railroad, in particular. Our business owners, non-profits and local governments, should not have shouldered the burden of a system that primarily serves New York City.”