State Judge Rules MTA Payroll Tax Unconstitutional

Well, this is just crazy. A State Supreme Court judge has ruled that the MTA payroll mobility tax, which collects more than a billion dollars a year to keep the NYC region’s transit system running, was enacted in a way that violated the state constitution. The payroll tax was passed in 2009 to avert devastating service cuts. It initially collected 34 cents for every $100 of employers’ payroll in the 12-county MTA region, but the tax was rolled back substantially by the state legislature and the Cuomo administration in 2011.

The payroll tax remains one of the region’s single largest sources of transit funding, and doing away with it would throw the transit system into turmoil.

In his decision, State Supreme Court Judge R. Bruce Cozzens, Jr. ruled in favor of Nassau County, Suffolk County, and smaller municipalities in the MTA service region, saying that the payroll tax “does not serve a substantial state interest” and therefore needed to receive home rule messages from the municipalities affected, according to Newsday.

As Transportation Alternatives pointed out in a statement, the ruling “threatens the foundation of the state’s economy.”

We’ll have more on this story tomorrow, but it seems as though the region’s transit system is now at the mercy of an appeals court judge three appeals court judges to be named later, who will decide whether Judge Cozzens’ proclamation that there’s no “substantial state interest” in funding the MTA holds any water.

Filed Under: MTA

ALSO ON STREETSBLOG

No matter how bad the service gets, transit riders will always have these USB ports.

Cuomo Breaks Another Promise to Transit Riders

|
Five years ago, Cuomo promised to allocate $320 million annually to the MTA to make up for cutting one of the agency's dedicated revenue streams. At the time, advocates warned that Cuomo wouldn't keep his promise for long. They were right: This year the governor's draft budget calls for a $65 million cut to MTA funding.

The MTA Payroll Tax Ruling: What’s Next?

|
Saying that the “budgetary crisis of the MTA is not a substantial state concern,” a state Supreme Court judge ruled yesterday that the MTA Payroll Mobility Tax is unconstitutional. Although taxes will continue to be collected as the MTA appeals the case to a higher court, yesterday’s decision puts $1.5 billion, or approximately 12 percent of the MTA’s annual […]