Bill Spells Death to Job Killing MTA Payroll Tax

Senators Ball and Zeldin announce plan to phase-out MTA Payroll Tax

YORKTOWN, NY (6/8/2011) – It’s a proposal that would save schools and small businesses in New York’s Metropolitan Commuter Transportation District (MTCD) $767.4 million dollars a year. Today, Senator Greg Ball (R, C-Patterson) announced the  details of a bill (S5596-A8193) that would eliminate the MTA Payroll Tax for schools and small businesses on January 1, 2012.  The Senator, who was joined by Senator Lee M. Zeldin (R-C, I-Shirley), released a piece of landmark legislation that would also phase out entirely the MTA Payroll Tax over the next two and a half years throughout Dutchess, Putnam, Westchester, Orange, Rockland, Nassau and Suffolk Counties.

“It’s time for the MTA to stop balancing its budget on the backs of hard-working New Yorkers,” said Senator Ball. “This is a tax that has literally cost hundreds of jobs and destroyed the dreams of dozens of business owners. Homeowners throughout this great state have been forced to tighten the belt and trim the fat in order to make ends meet. It’s irresponsible and unacceptable that an agency like the MTA has not done the same,” added Ball.

Under the bill, small businesses with 25 employees or less, as well as public and non-public schools throughout the MTCD, would be completely exempt from the tax on January 1, 2012. All other businesses with 25 or more employees will be included in a phase-out plan that calls for the tax’s complete repeal on January 1, 2014.

The bill is being sponsored by Senator Ball, and his colleagues, Senators Zeldin and Martins. The legislation is considered significant because it has support in both the New York State Senate and the Assembly. The bill includes a comprehensive plan to phase out the MTA Payroll Tax, while addressing the immediate and long-term concerns of all New Yorkers.

“I want to thank my co-sponsors Senators Ball and Martins for joining me in our fight to repeal the MTA Payroll Tax. The job killing MTA Payroll Tax should have never been enacted in the first place. If I was in office in 2009, I would have voted against it then,” stated Senator Zeldin.  “I have spent months questioning Chairman Jay Walder, MTA board members, state legislators, transportation experts, economists and others to identify ways for the MTA to tighten its belt,” said Senator Zeldin. “There is absolutely no doubt that the MTA, without increasing fares or cutting services, can balance its books after this legislation is implemented. One must question the motives and veracity of any individual or group that attempts to dispute this fact going forward.”

“Having spent the last few months studying their operations, the Senate and the Assembly believe that the leadership of MTA can find savings to offset the payroll tax, particularly if its elimination is carried out in this sensible, staggered approach,” said Senator Martins. “The elimination of the payroll tax will ease the burden on our businesses, hospitals, schools, not-for-profits and residents. In this recession, we have all learned to do more with less. I see no reason why the MTA cannot be expected do the same,” added Senator Martins.

Supporters are confident the payroll tax can be repealed without cuts to services or increases in fares.  They have suggested the following ways for MTA to cut expenses to balances it’s books:

  • Eliminate overtime abuse- well over $400 million is spent on overtime annually
  • MTA should share in enforcement camera fines in MTA bus lanes
  • Competitive bidding/ privatization of NYC bus system
  • Public/private partnerships
  • Reduce outside litigation costs by increasing utilization of in-house attorneys or the NYS Attorney General’s office
  • Sell some of the MTA’s capital assets currently valued at over $50 billion
  • Reduce the cash and investment float, which amounts to billions
  • Reduce the amount of managers and supervisors, which is currently over 10,000 of the MTA’s 66,000 employees
  • Crack down on pension padding where possible
  • Cashless tolls throughout the system
  • Reduced “vacancy/absentee” coverage of MTA Bridges and Tunnels
  • Improve process for approving personal and miscellaneous services contracts.

“The MTA Payroll Tax is a burden on not-for-profits, businesses, local governments and most importantly taxpayers,” said Assemblyman George Latimer (D-Rye). “We cannot constantly balance the books of the MTA with additional regional taxes that have significant negative impact on so many people, many of which do not even utilize MTA services very often. Suburban residents already pay a percentage of sales taxes and mortgage recording taxes to fund mass transit. Absent elimination of the tax, we need to restructure the tax; for those who reside in the suburban counties, it is simply not fair.  During an economic time that has required individuals, businesses and governments alike to tighten their belts, the MTA Payroll Tax is a classic unfunded mandate on municipalities, businesses, and not-for-profits forcing them to unfairly tighten their belts even further.  This bill addresses and reforms this tax,” added Latimer.

“The Hudson Valley is not an endless ATM for a public authority in desperate need of reform and fiscal discipline,” said Marcus Molinaro (R, I ,C – Red Hook). “The payroll tax, added to the fees and taxes Dutchess County residents businesses, families and farms must pay to support the MTA is nothing short of a fiscal hostage taking. Our economy will not rebound, jobs cannot be created and our taxpayers cannot enjoy a healthy quality of life without relief. Those who imposed this on our communities were wrong and the time has come to shut the spigot off and repeal the tax. I join with my Senate colleagues in calling for an end to the MTA payroll tax and welcome the responsible approach they are advocating for. Senators Zeldin, Saland and Ball are keeping up the fight in the State Senate and, on behalf of the people I represent, they have my continued commitment in the Assembly,” added Molinaro.

“This bill is a major step toward making Westchester once again livable for people of all ages,” said Assemblyman Dr. Steve Katz (R,I – Mohegan Lake).

“I spearheaded the County of Westchester joining the County of Nassau’s lawsuit against the MTA tax,” said Westchester County Legislator John Testa (R-Peekskill). “I am especially pleased that this agreement has been reached, and I congratulate and commend the members of the state delegation who made this happen. It’s the right thing to do for the taxpayers of Westchester and New York,” added Testa.

“This legislation to repeal the MTA Payroll Tax shows that special interests and lobbyists are no longer controlling Albany, and that the will of the people is reaching our state elected officials,” said Senator Ball’s Director of Local Government and Veterans Affairs and former Putnam County Legislator, MaryEllen Odell. “Every time we buy a gallon of milk, we’re hit with the MTA Payroll Tax. We’re taxed by the MTA on our payroll. We’re taxed by the MTA for our schools, our towns and our county. Small business owners and taxpayers are forced to pay this tax many times over. When I was a Putnam County Legislator, along with Chairman Tamagna I lead the county effort to build consensus with the other counties in our region to resist the MTA Payroll Tax. Senator Ball’s announcement on the repeal the MTA Payroll Tax is needed by the small businesses and non-profits here in Putnam and New York, and I thank him, the Senate and the Assembly for moving forward with this bill for the people,” added Odell.

“In Putnam, we’ve felt from the very beginning that this was a regressive tax. We applaud the work of the New York senate and Senator Ball in its full repeal,” said Chairman of the Putnam County Legislature, Vincent Tamagna. “We will continue to be vigilant against this and other new taxes in the future,” added Tamagna.

“The expiration of the MTA surcharge will enable the mid and southern Hudson Valley to become slightly more competitive in terms of attracting out of state companies and significantly more competitive in retaining our existing companies who are currently burdened by this onerous tax,” said President of the Dutchess County Economic Development Corporation, John MacEnroe. “I congratulate Senators Greg Ball, Lee Zeldin and Jack Martins, and Assemblyman George Latimer on this first step in reducing the tax burden on New York State businesses and residents,” added MacEnroe.

“Wow, Greg is my man!” said Anthony Lisi, President and CEO of Lisi’s Towing in Brewster, N.Y. “I knew that he would get rid of the MTA tax,” added Lisi who estimates a repeal of the MTA tax will save him $26 thousand a year.

“I want thank Senator Ball for all his efforts. This is a very important result for our local community hospital. It was a burden that was unfair and we’re very pleased that Senator Ball and the legislature were able to correct the situation,” said Senior VP of Putnam Hospital Center, Jeff Kellogg.

For more information or to speak with Senator Greg Ball, please contact Ali Skinner: (518) 605-4497.  To speak with Senator Zeldin, please contact Marcus Povinelli, (518) 455-3570.


About Greg Ball

Assemblyman Greg Ball (R, C, I – Patterson) is the Senator for New York State's 40th district. A former Vice President of Exceed International Development Corporation, Ball holds a Bachelor’s Degree in Political Science from the United States Air Force Academy, is currently completing his Masters Thesis of Liberal Studies in International Affairs at Georgetown University, and received an honorable discharge in 2005 at the rank of Captain after service as an active duty officer in the United States Air Force. View all posts by Greg Ball →

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