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 state supreme court 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, 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.
“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 Nassau Legislature, calling the decision a “great victory.”
Nassau County has paid $9.9 million since the tax was enacted.
“We keep saying ‘we need jobs’ so I’m going to urge the governor to lean on the attorney general to not appeal this decision because it’s just a job-killing tax, it’s killed a lot of jobs already and we have to not let that happen," said Assemblyman Dave McDonough, R-Merrick.
"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," added State Sen. Charles Fuschillo, R-Merrick.
Mangano said that “we’ll analyze that,” when asked if the county would continue legal action should the MTA successfully appeal.
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 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.”
With additional reporting by Jaime Sumersille.
