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Village Opposes MTA Tax as Unjust and Costly

Posted on 14 May 2009

During its monthly meeting, the Village of Sag Harbor Board of Trustees passed a resolution opposing a Metropolitan Transit Authority (MTA) payroll tax that mayor Greg Ferraris noted would cost the village, business owners and the school district thousands if the law is upheld.

The legislation, signed into law in May by Governor David Paterson, requires that for every $100 in employee wages paid, employers must pay a tax to the MTA of 34 cents. The law applies to 12 counties around Manhattan that have MTA service, including Suffolk County. The plan is a part of a multi-million dollar MTA bailout plan conceived by the state.

Sag Harbor is not the first municipality or agency to oppose the tax in Suffolk County as many governments and businesses have already publicly stated the tax is unjust due to the lack of services the MTA provides the East End of Long Island.

“This will cost the village in excess of $10,000,” said Ferraris at the Tuesday board meeting, noting the tax, while in effect as of September is retroactive to January of 2009 — an even greater challenge for municipalities and businesses that did not budget for the expense and now may have to come up with back taxes to comply with state law.

For Ferraris, a certified public accountant in the village, the law not only affects the village, but many businesses in the area, despite many feeling the tax is unfair due to the lack of MTA service on the East End.

“It will have a striking effect,” said Ferraris on Wednesday. “Whether or not we get the services is another issue, but that they would impose yet another tax on small businesses in this economy is counter-productive.”

Ferraris added the fact that local businesses and municipalities would foot the same cost as those in counties that have a substantial amount of MTA service only adds insult to injury.

“And it is exponential,” he pointed out. “We will be paying for it on the village level, at the town level, at the county level, so all of your tax bills will increase, as well as the cost of services whether it be from a restaurant or retail shop.”

Ferraris said he hopes political pressure from government leaders throughout Suffolk County will force the state to repeal the law.

“At the very least it should be indexed where counties receiving the benefit of MTA services would pay a greater share,” said Ferraris. “Honestly, I believe the MTA should be paid solely by the users of the MTA.”

The board empowered village clerk Sandra Schroeder to write a letter to state officials on its behalf opposing the tax hike.

While the village board may be opposed to a payroll tax to save the state’s transportation authority, it is not opposed to looking into setting up an authority of its own in Sag Harbor — this authority made of village business district property owners interested in creating a business improvement district.

Ferraris unveiled the concept, in its beginning phases, that suggests property owners could band together in a trustee and state certified business improvement district, which would enable property owners to collectively seek bonding for projects as big as sidewalk replacement and as small as snow shoveling in the winter.

“Essentially, we are just agreeing to incur debt for the district with the tax levy passed on to members of that district,” explained Ferraris on Wednesday. The board of trustees would have to agree on the amount of debt the village was willing to take on for the district, said Ferraris, but would have no power on what projects were completed with the monies as a result. A not-for-profit district management association, made up of tenants and property owners in the district, would vote on the projects the district would seek funding for. Property owners, said Ferraris, would need to make up 51 percent of the board, which would have to agree with a majority on any spending they wished to take on.

According to Ferraris, the district would be able to fund improvements to restore and promote district activity, from street repairs and sidewalk repairs to landscaping or the widening of streets. They could also fund any services that provide for the enjoyment or protection of the public, from beautification projects to street fairs, and any improvements that increase access for those with disabilities.

 “This all came about during a snowstorm in February or January when a couple of business owners came up to me and asked why we did not have village workers shoveling snow on the sidewalks like they do in East Hampton,” explained Ferraris.

Sag Harbor, said Ferraris has less than a third of the manpower and money than the town for such an endeavor. Many business owners, said Ferraris, including “one being the editor of the local paper” said they would gladly pay for such an increase in services.

 “I am not saying we have to move forward with this,” stressed Ferraris. “It is a recommendation. I would like to schedule a work session with property owners in the village to see if this is something they are interested in.”

On Wednesday, Ferraris said a meeting has been tentatively scheduled for Tuesday, May 26 at 5 p.m.

In other village news, the board held off on a public hearing regarding the creation of a traffic bureau in Sag Harbor. The bureau would be able to collect fines on traffic tickets, save felony, misdemeanor and speeding offenses, if the legislation is passed, no longer having to go through the Town of Southampton.

Ferraris said village attorney Fred Thiele was exploring the idea with village police chief Tom Fabiano, and the board should continue to hold the hearing open until next month’s meeting when they will have more information on the implications of creating the bureau.

Gigi Morris, of the village environmental watchdog group 725-GREEN, asked the board to consider allowing a second Sag Harbor Historical and Whaling Museum Energy Fair to be a village-wide event. With letters of support from both the Sag Harbor Chamber of Commerce and the Sag Harbor Business Alliance and assurances the event would require no village resources, Ferraris said the board would be inclined to support the idea for the village-wide fair, which will take place on July 11.


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One Response to “Village Opposes MTA Tax as Unjust and Costly”

  1. The MTA provides only 3 trains a day to the east end. Buses are run by Suffolk Transit, not the MTA. NYC pays nothing into our transportation system yet we are once again bailing them out. Enough is enough! We already pay a surcharge on our phone service for the MTA and now they want us to increase payroll taxes. MTA should provide expanded service on the LIRR if they want more money. The temporary added trains during the widening of county road 39 proved to be popular but instead of making this permanent they want another handout.

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