Martins Reacts as MTA Payroll Tax Ruled Unconstitutional

Sen. Jack Martins joins other officials in celebrating state supreme court ruling.

It may have cost former  the last election and now it's been deemed unconstitutional. The highly unpopular MTA Payroll Tax was struck down by a judge on Wednesday.

The ruling will reportedly put the MTA out about $1.5 billion per year, while that cash will remain in the pockets of businesses, municipalities, and taxing districts, many of which called the tax unnecessary. 

“I think people had a clear choice in that election,” said , who  and slammed the Democrat for . “Obviously there were all kinds of issues, I can’t speak to what influences a person’s vote but certainly that was part of our discussion during that campaign.”

Johnson was unavailable for comment.

Justice Bruce Cozzens, Jr. handed down his decision on a lawsuit first brought in 2010 by Nassau and Suffolk counties as well as numerous villages, including New Hyde Park, Mineola, Valley Stream and Locust Valley which 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.

“It’s been a hell of a week for the MTA,” Martins said. “First they blew up Second Avenue and now the down-state communities have blown up the MTA Payroll Tax.”

The MTA reportedly plans on appealing Wednesday’s ruling.

When adopted in 2009, the tax imposed a 34-cent tax for every $100 of payroll.

After considerable outrage throughout the first couple of years of the tax, the MTA rolled it back at the end of 2011, eliminating it entirely for businesses with an annual payroll under $1.25 million. The State Senate had , though the measure never got the required support from the Assembly.

Johnson was first against the tax before changing his mind in 2009, becoming the deciding vote in the state senate to pass the tax as part of a $2.3 billion bailout package. A total of 52 percent of the state senate and 60 percent of the state assembly voted in favor of the measure. Later that year Johnson was also named to the MTA Capital Projects Board.

Asked about the decision, Assemblywoman Michelle Schimel, D-Great Neck, said, “I do not comment on ongoing litigation. I’m concerned about the potential gutting of recent Long Island Railroad service restorations that a fiscal hole in the MTA budget can cause.” 

Still, numerous state and local officials from across Nassau and Suffolk counties involved in the lawsuit against the MTA Payroll Tax are urging the state not to allow an appeal.

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

Nassau County has paid $9.9 million since the tax was enacted.

Mangano said that “we’ll analyze that,” when asked if the county would continue legal action should the MTA successfully appeal.

“This decision has to stand, it should not be repealed,” Martins said.

What is not clear is how this will affect riders of the MTA, with fears 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  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.”

SLJ August 23, 2012 at 08:56 PM
I hope Sen. Martins doesn't plan on taking the train into the city anytime soon. Commuter costs are going to skyrocket.
George Mulligan August 23, 2012 at 11:25 PM
As things stand now, commuters are expecting 7.5% increases in 2013 and 2015. A commuter who rides the train from Port Washington and then needs the subway will be paying out about $500.00 more per year by then. This is before the latest judicial ruling. Can't the MTA find a way to rein in costs. How about Governor Cuomo and the legislature working to reduce the projected increases. And Senator Martins, that means you too. I am a registered Republican, but I am getting tired of your namby pamby weekly columns. It's time to fight the good fight and work for the constituents who elected you to office a few years ago.
Nassau Taxpayer August 23, 2012 at 11:41 PM
From heavily subsidized to not quite so heavily subsidized
George Mulligan August 23, 2012 at 11:52 PM
When my wife and I both commuted from Port Washington to jobs in western Queens, it was more cost effecient for us to use a car. When I retired and my wife continued to commute, she found the LIRR and a subway a better option. But if they raise the fares too high, she will find a carpool and once again commute by car. The MTA is a public service and the state should subsidize it. I don't see the problem with the state underwriting some of the costs. But at the same time they have to rein in out of control spending, bad contracts, etc. Let Senator Martins and Mr Cuomo work on that for the benefit of the middle class who commute to jobs by oublic transit.
John Pine August 24, 2012 at 04:27 AM
While I'm happy to see this tax repealed, we all know the MTA will take this out on riders. LIRR service has gotten dirtier and less reliable, while NYC Transit and Metro-North seem to fare better with their services. We all know the MTA hates Long Island, and that will only get worse with this ruling. And the first thing out of Lhota's mouth is stranding people and forcing them to pay more, it should be THE LAST THING he should consider. The MTA has billion dollar real estate assets in Manhattan including it's HQ on pricey Madison Ave, how about downsizing and selling that stuff? Most other transit systems are run from much smaller facilities with less employees, yet its an alien concept for the MTA. Perhaps it's time we take control of the LIRR ourselves and run it jointly between Nassau and Suffolk, under a new Long Island Transportation Authority (LITA) which would also oversee Suffolk Transit and NICE Bus. The MTA's priorities have always lied with NYC City and Westchester, so perhaps its about time this change be made. Otherwise the MTA will continue to have a gun pointed at LI'ers, threatening to leave them stranded, if we don't fork it over. I'm tired of the lousy LIRR service on the east end, late trains, and poor scheduling. Its time for a change.


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