Politics & Government

Officials Urge State to Uphold MTA Tax Ruling

MTA Tax ruled unconstitutional, Nassau and Suffolk politicians ask state attorney general to deny MTA's appeal.

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 following a  judge’s ruling that declared the tax unconstitutional.

The ruling by Justice Bruce Cozzens, Jr. was handed down 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.

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.

Find out what's happening in Mineolawith free, real-time updates from Patch.

“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,” Nassau Executive Ed Mangano said in a press conference Thursday morning at the , calling the decision a “great victory.”

Find out what's happening in Mineolawith free, real-time updates from Patch.

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

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

The Village of Mineola was one of the original parties which levied the suit against the tax while Martins was still mayor.

“It’s $270 million that was siphoned out of our local economy each and every year,” Martins said. “$270 million that would go a long way toward restoring jobs, giving a boost to our small businesses. Yesterday’s decision was a victory not only for local government and for our taxpayers that have borne the burden of the MTA Payroll Tax these past 3 years, but is a victory for small businesses, our not-for-profits, our churches, each of which have been paying this MTA Payroll Tax for 3 years.”

Martin’s senatorial predecessor, Craig 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.

“I think people had a clear choice in that election,” Martins said. “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.

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 steply 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.”


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here