BREAKING: NY State Court Overturns Tax That Supports NY MTA

Wednesday, August 22, 2012 - 07:16 PM

In response to a lawsuit filed by seven suburban county governments, a New York State judge ruled Wednesday that a payroll tax suburbanites pay for the NY Metropolitan Transportation Authority is unconstitutional.  Government leaders from Nassau, Suffolk and Westchester counties are among those who sued to overturn the tax of 34 cents per hundred dollars of payroll for all employers, including freelancers.

The 2009 law was meant to bail out the MTA from a $2 billion a year short fall.  The MTA said in a statement: “We will vigorously appeal today’s ruling. We believe this opinion will be overturned, since four prior challenges to the constitutionality of the law making the same argument have been dismissed.”

Government leaders from Nassau, Suffolk and Westchester counties were among those who sued to overturn the "mobility tax."

The tax brings the transit authority more than a billion dollars a year. The tax applies to all 12 New York State counties served by the MTA.

In his ruling, State Supreme Court Justice R. Bruce Cozzins Jr. agreed with the plaintiffs' argument that the tax does not serve substantial state interest, and improperly supercedes the county governments.

Paul Steely White, the President of Transportation Alternatives, a transit advocacy group, said in a statement:  "This decision threatens the foundation of the state’s economy. Public transportation is critical to the New York City metropolitan area—an area which provides 45 percent of the state’s tax revenue, paying for countless public services from Niagara Falls to Montauk. We hope Governor Cuomo resolves this case, and that the appeals court will consider the substantial state interest when reviewing this ruling.”

MTA Payroll Tax Decision


Comments [7]


@Chris, the "two sets of books" rumor has been thoroughly discounted. Tolls and tickets do not cover all road/bridge and transit costs, nor should they. Everyone benefits from MTA services whether they use them directly or not.

@SG, the tax is far from perfect, but with such unreliable funding the MTA basically has to take whatever it can get.

Aug. 23 2012 12:08 PM


My employer pays the tax. Yours shouldn't just because it is you?

There is a lot of economic activity in NYC because of the density, which is possible because of transit. If you don't want the benefit of being self employed in a high-tax environment, don't take part in it.

Aug. 23 2012 11:50 AM

This was a horrible tax. As a freelancer, living in NYC, I had to pay it and it was miserable. It wasn't just the injustice that I got hit with a tax that my neighbors didn't get hit with, just because they had "real" jobs with health care, pension benefits, unemployment benefits, and sick leave. It was also administered in a way to make it as difficult to work with as possible. Instead of just figuing out how much money I made and adding it into my yearly tax return, it was a separate bill that I had to take the initiative to pay, four times a year. Sure you say, big deal. But add it in to all the other BS that freelancers have to deal with, and it was just one more unwanted, unnecessary burden. Want to tax people in NY to pay for the MTA? Sure, go ahead... but why should we freelancers, the folks with the least job security and least administrative support, get stuck with paying the freight for everyone???

Aug. 23 2012 10:36 AM

The LIRR and Metro North are heavily subsidized. Riders pay something like 25-35% of operating expenses. NYC transit users pay a much higher percentage of operating expenses at the fare box for subways and buses.

Aug. 23 2012 09:23 AM

The only people in the surrounding counties that should have to give any money to the MTA are those who chose to take a train or cross a bridge to get to work. But they already pay through tolls and should not have to pay through taxes, too. I chose to work close to home so I could save commuting costs. I should not have to pay for someone else's commute or for MTA corruption (e.g. they got caught with two sets of books).

If the MTA isn't collecting enough revenue then they should make cuts like the rest of us. Take a look at one of their two sets of books, keep the train runs that most people take and cut the runs with the fewest riders. Stop bleeding the rest of us.

Aug. 23 2012 08:37 AM

Those suburban counties benefit... so why shouldn't they have to pay????

Aug. 23 2012 08:06 AM
Mark Victor

Talk about nitpicking.

This seems to be one of those situations where the law is so complex and convoluted that any element of it can be used to challenge or support a plaintiff's — or defendant's — arguments. It could have gone either way.

Now more of our tax dollars will be used to have the Court of Appeals deliberate what does not need to be deliberated, at least according to reason and logic.

I suggest a New York State Constitutional Convention to clean things up and return logic and reason to our constitution and system of laws. That is, if the lawmakers at a convention would manage to get anything done...

Meanwhile, the MTA will be spending money on trying to find a secure source of funding that doesn't break the financial back of the working New Yorker. Good luck with that.

And rich suburbanite politicians with their gas-guzzlers will continue to ignore the fact that they are, indeed, part of a greater whole — whether it's a metropolitan area, a state, a nation, or a world groaning under the weight of greed and pollution.

Don't we "get it" yet?? Or is the human race going to continue to nitpick itself into oblivion?

Aug. 23 2012 06:26 AM

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