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May 16, 2009 1:09 PMPublication: The East Hampton Press

Town and school officials are ticked over MTA payroll tax

May 16, 2009 1:09 PM

New York State Governor David Paterson last week approved a law that, starting on September 1, will allow the Metropolitan Transit Authority to begin collecting a payroll tax from local governments, businesses and school districts, including those on the East End and in Brookhaven Town, to help close the MTA’s $1.2 billion deficit.

Signed by Mr. Paterson on Thursday, May 7, the law will require that employers operating in the 12 counties near New York City pay 34 cents on every $100 in employee wages paid. The measure is expected to generate as much as $1.5 billion for the MTA.

Lawmakers in Suffolk County, as well as the representatives of local hospitals, governments and businesses, contend that the tax is unfair because the MTA provides limited service to the East End.

New York State Assemblyman Fred W. Thiele Jr. said that this legislation, sponsored by New York City Assemblyman Sheldon Silver, is one of the worst bills that he has ever been forced to vote on. Mr. Thiele represents the entire South Fork and the southeast section of Brookhaven Town.

Mr. Thiele explained that he and every other state official representing Suffolk County—aside from State Senator Brian X. Foley, the former Brookhaven Town supervisor, who lives in Blue Point—voted against the bill, which still gained approval in both the State Assembly and Senate.

“The MTA has not proven itself to be a fiscally efficient agency,” Mr. Thiele said. “And now we’re throwing more money at them, without any reform from them.”

On Tuesday, Suffolk County Legislator Ed Romaine, who represents the North Fork and eastern Brookhaven Town, held a press conference in Hauppauge calling for the MTA to assume operations of the Suffolk County Transit Bus system. A press release from County Executive Steve Levy’s office states that an MTA-run bus system in Suffolk would make the distribution of the authority’s services more equitable. Currently, the MTA only runs the Long Island Rail Road in eastern Suffolk County.

“Every place on the East End only sees two or three trains per day, which isn’t fair,” said Bill Faulk, a spokesman for Mr. Romaine. “Suffolk County is extremely underserved by the MTA.”

For example, on Wednesday, May 13, only three trains were scheduled to leave the Hampton Bays train station for Penn Station, and only four were making the return trip, according to the LIRR website. Additionally, passengers traveling on the Montauk line must transfer at the Jamaica Station in order to reach Manhattan.

The new payroll tax will require that local municipalities and most business owners pay thousands of dollars in additional fees. East Hampton Town is going to have to pay about $85,000 to cover the municipality’s $25 million payroll, according to Lynn Ryan, the executive assistant to East Hampton Town Supervisor Bill McGintee. Southampton Town, meanwhile, will be expected to shell out about $132,000 in payroll taxes to the MTA on its $39 million payroll, according to Ryan Horn, a spokesman for Town Supervisor Linda Kabot. And Brookhaven will be required to pay an estimated $200,000 in payroll taxes to the MTA to cover that town’s $60 million payroll.

According to a press release issued by Mr. Levy’s office, the MTA already collects about $393.1 million a year from Suffolk County residents. Once the payroll tax takes effect, that figure is expected to jump to $520.3 million, according to the county release.

Local school districts must also absorb the increase, even though the MTA has promised that they will receive full tax rebates. That situation is upsetting some school district officials.

“This could be a nightmare,” said Westhampton Beach School Board President Aram Terchunian during the district’s meeting on Monday night. “But that’s the state of New York in the 21st century.”

Mr. Thiele explained that there is a provision in the bill to provide rebates to school districts paying the MTA payroll tax. He explained, however, that the bill does not appropriate money for the school district rebate. Rather, Mr. Thiele said the bill requires that New York State pay school districts back a year after they pay the payroll tax.

“School districts do not take solace in that,” Mr. Thiele said. “Most school districts would have preferred an outright exemption, rather than hope it gets rebated back.”

Westhampton Beach School Business Official Kathy O’Hara said the MTA payroll tax will cost her school district about $84,000 per year, as it has a payroll of about $25 million.

“School districts are trying to keep things fiscally prudent and low, but now we have this from the state, and we don’t have anywhere to get the money from,” Ms. O’Hara said, adding that many other school district business officials across Long Island are uncertain if they will ever receive a rebate.

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So what should be the alternative? How about charging increasing the LIRR fare to $50 each way to/from Penn? You can't get something for nothing. Train trips in and out of the East End are heavily subsidize as it is.
By HEJIRANYC (32), Sag Harbor on May 14, 09 9:54 AM
The MTA is a bloated bureaucracy with absurd salaries for the titular heads who think they are CEOs but are really underworked overpaid political appointees.
By jim (48), hampton bays on May 16, 09 10:39 PM
The Governor is off his rocker.The MTA should handle its own problems.I do not use the MTA now or in the future so why should I have to absorb the increase in my Town,County and School Taxes. Rebates from the State,that's another joke.Everyone should be exempt from this political nightmare.Obviously Governor Paterson really cant see,he's destroying New York.
By Shout ot loud (20), Southampton on May 18, 09 8:31 AM