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Mar 25, 2009 12:51 PMPublication: The Southampton Press

Schneiderman holds anti-MTA tax press conference

Mar 25, 2009 12:51 PM

East End lawmakers and officials from schools and businesses lashed out at the Metropolitan Transportation Authority’s proposal to cover its massive budget deficit by adding a new payroll tax rather than increasing fares.

On the East End, where Long Island Rail Road service is sparse, the proposal was received as little more than taxation without representation.

“We’re not very well served by the MTA, but they certainly get a lot of money from us,” Suffolk County Legislator Jay Schneiderman of Montauk said at a noon press conference at the Southampton Village train station on Tuesday.

He then noted that the next train scheduled to arrive at the station after 1 p.m. wasn’t until after 6 p.m. “We’re hoping that we can collectively jump in front of the train.”

The sacrifice wasn’t necessary. On Wednesday, the MTA board of directors adopted steep rate hikes for riders and cut service throughout the authority’s coverage area.

The tax proposal, one of several possible alternatives to large rate hikes that came out of a state appointed commission to look for ways to increase MTA revenues, called for imposing a tax of between $2.50 and $3.30 per $1,000 of payroll.

The tax would be paid by the employers, unlike other payroll-imposed taxes for Social Security, Medicare and unemployment insurance, which are taken out of employees paychecks.

State Assemblyman Fred W. Thiele Jr. said that the payroll tax idea had not found much support among state lawmakers.

Mr. Schneiderman said that such a tax would not only unreasonably burden businesses, it could force schools and town governments, with millions of dollars in annual payroll, to raise property taxes to shoulder the new expense. Mr. Schneiderman noted that the Southampton School District would potentially have to pay as much as $200,000 in additional taxes if the proposal were adopted.

The East End already contributes as much as $60 million more in tax dollars to the MTA than it receives back in service, Mr. Thiele said.

In 2008, East End residents contributed $98 million to the MTA through revenue from a quarter-percent sales tax and another $35 million from mortgage taxes collected by the county. Suffolk County also paid the giant state utility $25 million for station maintenance, according to Legislator Edward P. Romaine.

The five East End towns have just 12 train stations.

Ryan Horn, an aide representing Southampton Town Supervisor Linda Kabot at the press conference, said that East End riders constitute just eight-tenths of a percent of the Long Island Rail Road’s total ridership, which itself makes up only a fraction of the MTA’s total service.

The MTA operates the state’s sprawling public transportation system, including the LIRR and Metro North’s commuter trains and the New York City subway system. The MTA’s board has the authority to set rates, but needs state lawmakers to levy taxes to fund operations.

When the national economy was booming, the MTA had a nearly $1 billion surplus. Mr. Schneiderman said the utility “squandered” the money on free ridership giveaways and other fleeting gifts to riders, rather than saving it for tough times.

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