Officials Urge State to Uphold MTA Tax Ruling

State and local officials involved in the lawsuit against the MTA payroll tax are urging the state not to allow an appeal following a state supreme court judge’s ruling that declared the tax unconstitutional.

The lawsuit was first filed in 2010 by Nassau and Suffolk counties as well as numerous villages.

The ruling by Justice Bruce Cozzens, Jr. argued that the tax, which charged employers 34 cents for every $100 of payroll, was unconstitutional based on the fact that it did not benefit the entire state and either did not pass both houses of the state legislature with a two-thirds majority vote or adhere to the “home rule” clause from the local municipalities.

Mayor Don Brudie, who helped county executive Ed Mangano in February introduce a bill to exempt all counties, towns and villages from having to pay the tax, told Patch, "For every municipality in the downstate area, including Garden City, that was included in the MTA tax it means substantial budget savings that could be put to better use for our taxpayers, especially in the current down economy."

He added, "But equally important it will be a boast to the small business owner in the same counties all of whom were subjected to this tax. I applaud County Executive Mangano for what he has done and is trying to do to help the County and region out of the deficit quagmire which he inherited."

Garden City resident Nicole Russo thanked New York State Republican Senate and Assembly members for pushing for the repeal of a tax "that only hurt the good people of Long Island!"

Sen. Kemp Hannon, another staunch opponent of the tax, added, "Having strongly opposed this job killing tax since its implementation by the Senate Democrats in 2009, and supporting its repeal in 2011, I am pleased that this latest positive step has been taken to alleviate this unfair and significant burden on businesses, municipalities, libraries and employers across Long Island. I applaud the Court for its decision and reaffirming what my Republican colleagues and I have long been saying: that the MTA payroll tax is unfair, unjust, and should never have been implemented."

Brudie said if ever a tax was unfair this was it. “This is a well-written decision and as everyone has already stated, it should not be appealed," he said at Thursday's press conference.

Bill Schoolman, the owner of Bohemia-based charter and tour bus company Classic Coach, was the first one to launch a lawsuit over the payroll tax, taking out a mortgage on his home to file the suit.

“It’s pretty bad news that New York State taxpayers last year contributed illegally $9 billion to keep the MTA running,” Schoolman said. “The law’s pretty clear: public authority is supposed to be self-sustaining.”

“It also sends a message to agencies like the MTA to become more efficient before looking to the taxpayer,” Mangano said in a press conference Thursday morning at the Nassau Legislature, calling the decision a “great victory.”

Nassau County has paid $9.9 million since the tax was enacted. Garden City, for the calendar year Jan. 1, 2011 through Dec. 31, 2011, paid $90,104.60, according to Frank Kelly, deputy village treasurer. 

“We can’t be a ‘New New York’ and be open for business with taxes like the MTA Payroll Tax still in effect, so whether we got rid of it legislatively last winter where we chipped away at it a little bit or in the courts, this tax was a bad idea the day it was passed, it was a bad idea now, I’m happy to see it go by the wayside,” added Assemblyman Ed Ra, R-Franklin Square.

How will this will affect riders of the MTA? Some fear that to make up for any lost funding, the agency may steeply raise fares or tolls.

“What they should expect is efficiencies,” Mangano said, saying that the county is operating the former MTA Bus system itself without the subsidy from the MTA, thus saving the agency money. “They should find another way through cost-cutting and efficiencies. They have $60 million in assets and other efficiencies that can be achieved before looking to the taxpayer or the rider.”

What is also unclear is if local municipalities must also continue to send in payments for the tax as MTA officials or if payments will be withheld.

“We’ll analyze that with counsel,” Mangano said, repeating the answer when asked if the county would seek retroactive reimbursement for taxes paid as well as on behalf of local businesses who paid the tax. “We would like to do that.”

Carisa Giardino contributed to this article.