Ah the infamous MTA Payroll Tax is back in the news again. As longtime readers know, I have been dead set against this funding mechanism since it was first proposed in December 2008 as a part of a package to help starve off the MTA’s “doomsday scenario.”
I was not alone in these sentiments as many businesses across the region were against them & the unfair impact they would have on them & let’s not forget school districts which were not immune either. The East Meadow Chamber has joined in the fight against the payroll tax as they have sued New York State due to their claims of the tax being illegal according to the State Constitution. Mike Caputo of the LI Herald has more:
Some local business owners are drawing the line.
The Metropolitan Commuter Transportation Mobility Tax, known as the MTA payroll tax, has become a bone of contention among business owners. The measure, passed in June 2009 but retroactive to March 2009, requires employers and the self-employed to pay a tax of roughly 3.4 percent, or 34 cents per $100, on their company’s payroll. School districts and nonprofit organizations are not exempt from the tax.
“Our money is paying for a system that is out of control,” said Richard Bivone, an East Meadow business owner and the co-president of the Long Island Business Council.
The tax was approved by the state Legislature in 2009 as part of its plan to bail out the financially strapped Metropolitan Transportation Authority, which faces a deficit of about $750 million. The measure passed easily in the Assembly and, after much debate, was approved by majority Senate Democrats in a 32-30 vote.
One Long Island business owner, Bill Schoolman, decided to challenge the tax in court. In December, Schoolman filed a lawsuit against New York state for instituting a tax that he says violates sections of the state constitution. MTA officials have maintained that the tax is not illegal.
Schoolman said he is tired of paying for more than four decades of what he called “mismanagement” in the MTA. With just under 100 employees in his own transportation business, he pays $20,000 a year for the tax.
“I write a check for $20,000 a year to benefit a government competitor,” Schoolman said. “This is the place to say, ‘Enough is enough.’” He criticized the MTA for catering to special interests, paying high salaries and pensions and making poor business decisions over the years — “A 45-year history of corruption and fiscal irresponsibility,” he said.
Click here for the complete report.
I am unsure of the legality of the tax but I am curious if a judge would find it illegal. If so, would the MTA be responsible to pay back the entire amount it has collected from it? If so, that would be a huge blow to an agency that is reeling financially. I look forward to seeing how this case unfolds as time goes by.
xoxo Transit Blogger