(New York, NY - Jim O'Grady, WNYC) In a sometimes heated hearing, state legislators and NYC Chairman Jay Walder squared off on the payroll tax that the NY state legislature approved in 2009 to bail out the agency. The tax applies to businesses in the twelve counties the MTA serves in an around New York City.
"We are paying greater freight in the suburbs for the services that are basically New York City services," said Assemblywoman Nancy Calhoun from Orange and Rockland Counties, reflecting a common view among suburban legislators.
Walder said he didn't see the tax as a short-term fix but a part of the MTA's permanent financing solution. "I don't foresee a plan in any time frame in which you can phase out the payroll tax," he said, when asked if the MTA could ever balance its budget without it.
Walder said the tax--in which each employer pays one-third of one percent of its payroll to the state--brings in $1.4 billion a year to the authority. That's fifteen times the money saved by all of last year's service cuts.
Walder said the MTA wouldn't raise fares or cut service to meet its 2011 budget. But he wouldn't rule out adding more layoffs to the 1,700 workers laid off last year.
New York Governor Cuomo has repeatedly said that he is open to a "better way" of funding the MTA than by a payroll tax. But has yet to propose an alternative.
The payroll tax was part of a bailout package proposed by Richard Ravitch, the former MTA chief who later became Lt. Governor under David Paterson. Ravitch had initially proposed the tax in conjunction with a toll on the East River Bridges that are now free -- including the Brooklyn, Manhattan, and Williamsburg Bridges. But those tolls were rejected, and a watered-down package including the payroll tax, a taxi-cab surcharge, and a tax on rental cars was ultimately passed.