Suburban State Senate Candidates Campaign Against MTA Payroll Tax

Senate Minority Leader Dean Skelos' top priorities, via his website. The payroll mobility tax could be in real danger if his party retakes the State Senate.
Repealing the MTA payroll tax is one of the top priorities of Senate Minority Leader Dean Skelos, who may be poised to regain control of his chamber. Image via ## website.##

With the MTA at least $9 billion short on funding for its five-year capital plan, New Yorkers who ride buses and subways should be counting on legislators to secure a new revenue stream for transit. But after tomorrow’s elections, the first transit fight in Albany may not be over new revenue at all. Repealing the payroll mobility tax, passed along strict party lines as part of the 2009 MTA funding package, is a top priority for many suburban State Senate candidates, especially Republicans.

Senate Minority Leader Dean Skelos is a fierce opponent of the payroll tax and could gain control of his chamber if the GOP picks up just two additional seats. Gubernatorial favorite Andrew Cuomo hasn’t had anything good to say about the payroll tax either. That means over $1.1 billion a year in transit funding is potentially on the chopping block.

Perhaps the fiercest fight over the payroll tax is happening in southern Suffolk County, where incumbent Brian X. Foley is defending his seat against Republican Lee Zeldin. Zeldin has made the payroll tax perhaps the number one issue in the campaign, going so far as to call his opponent “Brian ‘MTA Tax’ Foley” in press releases on subjects unconnected to transit or tax policy.

Zeldin has called for eliminating the payroll tax. “Entities paying the tax have been forced to lay off employees, cut payroll and watch their profits shrink,” says Zeldin’s campaign website. “We must also reform the MTA’s pattern of wasteful spending and mismanagement instead of supporting bailouts like the Foley Payroll Tax.”

Foley, in contrast, is pushing a compromise where the payroll tax is reduced by one-third in Nassau and Westchester Counties and by two-thirds in the rest of the MTA service region [PDF]. “Mr. Foley doesn’t like the tax and is working to make it less burdensome to businesses,” his campaign manager told the Wall Street Journal. “It was either that or let them raise fares 35 or 40%, cut service dramatically.”

Foley’s grudging support for the payroll tax is mirrored by a number of incumbent Democratic senators, all of whom voted for the MTA rescue package. In Westchester County, Sen. Suzi Oppenheimer said on a radio show that she “didn’t support it nor do I know anyone who likes this tax.”

A spokesperson later clarified Oppenheimer’s position, saying, ” In 2009 the Senate was presented with only one proposal to support the MTA at a time of financial crisis and proposed draconian fare increases. At the time it passed the Senator indicated her preference for other revenue sources such as tolls on the East River bridges.” The spokesperson said that Oppenheimer supports the repeal of the payroll tax.

Oppenheimer’s opponent, Bob Cohen, puts “a repeal of the outrageous MTA payroll tax” as part of his platform on his website. In an interview with a Scarsdale website, Cohen said, “The MTA is a huge bureaucracy and a top-heavy organization with many six figure salaries. The legislature should not have taken away from our children’s education because this organization can’t get its act together.”

The payroll mobility tax was instituted after the recession MTA revenues to plummet and now makes up a significant share of dedicated transit funding. Image: Tom DiNapoli.
The payroll mobility tax was instituted after the recession caused MTA revenues to plummet, and now makes up a significant share of dedicated transit funding. Image: ## DiNapoli.##

The Democrats don’t always offer even that kind of qualified support for transit financing, however. In the 40th Senate District, which stretches from Westchester through Putnam County and into Dutchess County, both candidates are unambiguously opposed to the payroll tax. “This MTA payroll tax is the final nail in the coffin of a state that is trending vociferously into a downward spiral,” said Assembly Member Greg Ball, the Republican and self-avowed Tea Partier running for the seat. “Sheldon Silver and his legislative cronies are not leaders, they are Kamikaze pilots intent on sinking with the ship.”

Ball’s opponent, Mike Kaplowitz, puts it less colorfully, but the meaning is the same. “Mike will create jobs by lowering taxes on businesses and repealing the MTA tax,” his website proclaims. Kaplowitz has also expressed interest in swapping the payroll tax for East River bridge tolls.

One suburban Democrat in a competitive race who hasn’t run from his payroll tax vote is northern Nassau County’s Craig Johnson. In a debate with his opponent, Jack Martins, Johnson said “nobody likes bailouts but the fact is is that we were facing massive fare hikes in order to prevent the bailout and that just wasn’t feasible.” He also blamed past legislatures for forcing the MTA to rack up the debt that is currently dragging down the agency.

In contrast, Martins has called to repeal the tax. “Craig Johnson added insult to injury as he cast the deciding vote to impose an onerous MTA payroll tax on all Nassau County businesses, schools and charities,” read one e-mail that Martin sent out to his supporters. “Together, we cough up another $100 million to keep the dysfunctional and gluttonous MTA afloat — whether we ride or not.”

Inside New York City limits, the payroll tax hasn’t emerged as a central issue in the same way as in the outlying counties. It doesn’t seem to have come up on the record in the heated race between incumbent Queens Republican Frank Padavan, who voted against the MTA rescue, and former City Council member Tony Avella.

Further south in Queens, Anthony Como has raised the issue in his campaign against incumbent Democrat Joseph Addabbo, although it hasn’t been a chief concern of his. Como has promised to repeal the payroll tax and complains on his website that the legislature has provided “no 5-year highway, road and bridge plan – a key economic development initiative for Upstate and Long Island – while approving over $23.8B in new funding for the MTA.” Addabbo seems to have been silent on the payroll tax since voting for it in 2009.

Of course, in three-men-in-a-room Albany, the positions of the candidates in all these competitive races can be less important than those of the party leaders. For example, Senate Minority Leader Dean Skelos has “Repealing MTA Tax” as one of his four basic positions on the front of his campaign website. (Skelos is also a long-time opponent of congestion pricing.) If his party takes over the State Senate and he continues to make repeal a top priority, he might be able to force the issue.

Andrew Cuomo, the man likely to wield the veto pen, is also on record saying that we need to “revisit” the payroll tax. Expect this to be a top battle in Albany next year.

  • Pete

    Can’t say I’m surprised by Suffolk County’s opposition to the payroll tax – MTA service out there post-cutbacks has been abysmal. The North Fork branch, always slow and inconvenient (it only runs 2x/day each way, and at times that are completely inconvenient unless you work a 9-5 job in NYC), has gotten worse.

    The train no longer runs on weekends *at all*. There has been an uprising in Suffolk County against the MTA for a while now (service is geared solely for commuters to NYC & noone else), but now people feel like they’re getting taxed & getting nothing in return.

    On the other hand, the private bus line runs 4 buses/day or more into NYC on the North Fork branch.

  • The only decent argument for repealing the payroll tax is that the state has raided it for non-MTA purposes. In the best of all possible worlds, it would be replaced with more appropriate funding mechanisms, ideally a combination of congestion pricing and East River bridge tolls. For extra credit, make sure those revenue streams don’t get raided in the future. But that’s not what the repealers are saying — they’re just asserting that transit doesn’t matter to their corners of the metro area. What a shortsighted and potentially disastrous miscalculation. They deserve to get voted out of office tomorrow.

  • vnm

    That’s great, Pete. So you can kill the tax out of spite, and then have even less service. The North Fork buses run on the LIE, maintained and policed entirely by taxpayers. Yet nobody complains about those expenses.

    Listening to the suburban candidates, you’d think that the suburbs are footing the entire bill for this tax. In fact, according to a report by Comptroller DiNapoli put out shortly after the tax was passed (see Figure 2 on p. 2 of the PDF), the seven suburban counties that are complaining so loudly contribute one quarter of the revenue. The lion’s share of the revenue comes from NYC, where there hasn’t been one bit of complaint against it.

    The payroll tax has proven to be vulnerable in the suburbs to the “I don’t use it” criticism (unwarranted, in my opinion, given the integrated nature of the downstate regional economy). People can get up on a soap box and complain: “I don’t use the MTA but I still have to pay the tax.” It’s harder to pin that complaint on tolls in an integrated transportation system in which toll revenue supports bridge maintenance first and supports mass transit second, as is the case at the MTA’s bridges. Trains help reduce congestion on bridges. Tolls help maintain bridges and help keep them free of traffic.

    The connection is easier to understand when the entire multi-modal transportation is thought of and operated together. I think it should therefore be a livable streets mantra that transportation-related expenses should be met by revenues specifically generated from within the transportation sector.

    Given the political realities in the suburbs and the equally real fact that the MTA has a $9 billion to $10 billion capital program budget shortfall, bridge tolls in exchange for a reduced payroll tax burden is the political deal waiting to happen. The suburban political delegations feel they lost out to the city in the exchanges that led to the MTA bailout package because tolls were excluded. If that perceived wrong were righted, there would be a lot less complaining.

  • Gargamel Tralfaz

    It’s time for NYC to secede from the rest of the state and let them die off from not having NYC $$$ to steal.

  • Pete


    My point being that the MTA’s service in Suffolk County is so bad that most people don’t (or can’t) use it. Forget about going in to NYC, you can’t even use to to go to Ronkonkoma for lunch.

  • Alternative solutions to the payroll tax, such as bridge tolls and/or congestion pricing, have social benefits in addition to revenue for transit. Albany is going to have to face reality eventually. If the payroll tax does indeed get repealed, and they realize that our trains and buses won’t run on magic, it could perhaps act as a catalyst to bring bridge tolls and/or congestion pricing to the table–for real, this time.

    Either that, or a whole bunch of irresponsible borrowing.

  • Paul

    Don’t we already pay a NYC income tax just for working in NYC? Plus we pay for train fare and subway fare. Now, we should pay an additional tax?

    Why not tax Manhattan residents? They use more of the services than do commuters who are only there part time. They use the garbage services, parks, subways, sidewalks etc. much more. It’s time for them to pay their share.

    Institute a distance based subway fare as they have in DC, London etc. There’s your revenue right there.

  • Suburban residents who work in NYC do not have to pay city taxes, unless they’re employed by the city government. But maybe it’s time they should pay some commuter tax.

    Also, western Suffolk County, which has about 60% of the county’s population, is well-served by rail, by suburban US standards, with hourly off-peak service or better. This despite the fact that the LIRR has the lowest farebox operating ratio of the region’s major rail operators.


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