Deal reached in Albany to scale down MTA payroll tax

12/07/2011 3:15 PM |

JENNIFER GUSTAVSON FILE PHOTO | A deal to reduce the MTA payroll tax threshold has been struck in Albany.

A deal to reduce, but not eliminate, the controversial MTA payroll tax has been reached by Governor Andrew Cuomo and the leaders of the state Senate and Assembly, and now awaits approval by the members of those two bodies.

The tax would reportedly be eliminated for businesses with payrolls of less than $1.25 million and reduced for businesses with payrolls between $1.25 million and $1.75 million.

The reduction apparently doesn’t apply to public school districts, towns or counties.

The MTA payroll tax reduction is part of an overall agreement “on legislative and executive proposals to create jobs and cut taxes for middle-class New Yorkers,” according to the governor’s office.

”The agreement includes support for a comprehensive New York Works Agenda that will create thousands of jobs with new investments in New York’s infrastructure; passing a fair tax reform plan that achieves the first major restructuring of the tax code in decades, resulting in a tax cut for 4.4 million middle-class New York taxpayers; approving $50 million in additional relief for areas devastated by recent floods; and reducing the MTA payroll tax to provide relief for small businesses,” the governor stated in a press release in which he referred to the MTA payroll tax as “job-killing.”

The MTA payroll tax forces business owners, nonprofits and governments to pay for MTA transportation services that local officials in many areas say they don’t even receive.

”I believe the MTA takes more money out of our pockets and doesn’t give us the service for what we pay them,” said county Legislator Ed Romaine (R-Center Moriches), who has been critical of both the MTA and the payroll tax. “Any reduction of the MTA payroll tax is welcome news for the businesses. I’d like to see that tax totally eliminated.”

Details on the specifics of the reduction were not immediately available. The press release from the governor stated: “The payroll tax would be eliminated or reduced for 294,900 taxpayers overall. The tax would also be eliminated from an additional 415,000 taxpayers by raising the self-employment income exemption. In addition, private elementary and secondary schools, as well as parochial schools, would be exempt from the tax. The state would compensate the MTA for the $250 million in lost revenue.”

”They’re hitting the taxpayer twice,” Mr. Romaine said of the payroll tax as it now stands. “They’re not only forcing businesses to pay the payroll tax, but now you’re forcing schools and libraries and towns to pay that, and then they have to pass that along to the taxpayers, so it’s a double bang.”

tgannon@timesreview.com