Leaves Budget Hole Your $ May Fill
In a move that could lead to costlier public transit trips and reduced service, the Nassau Supreme Court ruled last Wednesday, Aug. 22. that the state mobility tax violated the state constitution.
The tax, enacted in 2009, required employers in the city and surrounding counties to pay the state 34 cents for every $100 in payroll costs, with the money going to fund the Metropolitan Transportation Authority. It was projected to generate over $1.2 billion in revenue for the public authority, according to the MTA.
The Nassau, Suffolk and Westchester county governments filed suit against the state legislature for imposing the tax.
Reportedly, Justice R. Bruce Cozzens Jr. ruled that the state needed “home rule” messages from all the municipalities being taxed. “Home rule” resolutions give the state permission to pass legislation in matters of a local nature.
In a statement, the MTA blasted the decision and promised to appeal it.
“The MTA strongly believes that yesterday’s ruling from Nassau Supreme Court is erroneous,” the agency said on Thursday, Aug. 23. “We will vigorously appeal it and we expect it will be overturned, since four similar Supreme Court cases making the same argument were previously dismissed.”
“Removing more than $1.2 billion in revenue from the Payroll Mobility Tax, plus hundreds of millions of dollars more from other taxes affected by yesterday’s ruling, would be catastrophic for the MTA and for the economy of New York State,” the statement continued, noting that without the tax or additional funding, “the MTA would be forced to implement a combination of extreme service cuts and fare hikes.”
“There won’t be any disruption in the MTA funding,” Gov. Andrew Cuomo told reporters at the State Fair in Syracuse on Aug. 23, according to the blog Capital Tonight. “We believe the ruling is wrong and we believe the ruling is going to be reversed.”
City Council Member Eric Ulrich, however, applauded the ruling in a statement of his own, calling it “good news for small businesses in Queens.”
“Hopefully, this will force the MTA to identify smart, cost-saving solutions to balance its budget, rather than simply cutting bus service and raising fares,” he said in an Aug. 23 press release. “Albany must get the MTA’s budget under control. Asking small businesses to shoulder the burden for public transportation is unfair and I’m glad the court agreed.”
