New York City’s media is focused non-stop on the mass transit crisis ahead if the Legislature does not approve the Ravitch Plan to bailout the MTA. That plan has on its express track placing tolls on the East River and Harlem River bridges that have long been free. Assembly Speaker Sheldon Silver offered a compromise that lowers prospective tolls from $5 to $2 and quells outer borough outrage, but some legislators are unconvinced. Their constituents abhor the tolls. Meanwhile, editorial boards and columnists assert that no responsible public official would risk mass transit calamity by fighting the tolls.
In all of this, there is willful disregard for impacts of the other, “forgotten” track of the MTA bailout plan – imposition of a payroll tax that would equally hit all employers in the MTA region, from Suffolk to Orange County. By calling this a “mobility” tax, the Ravitch Plan softens the sound but not the impact. It assesses 33 cents on every $100 of payroll paid by every employer – every school district, local government, hospital, business and not-for-profit entity – no matter how small. The rate seems insignificant, but it adds $400,000 to New Rochelle’s school budget; $200,000+ for Mamaroneck. In a time when some want to cap school taxes or end county government and all are outraged by rising costs and taxes, the Ravitch Plan would add a further burden.
I spoke with the executive of a small business – under 20 employees – who said the payroll tax might force him to lay off an employee or two. His profit margins are minimal; he can’t absorb another uncontrolled cost. That’s exactly what we don’t need as we spend trillions to jump start the economy. Another business may move to Connecticut, beyond reach of this and many other taxes. My Rockland and Orange colleagues face similar challenges keeping businesses from locating to New Jersey. And what about employers in Rockland, Orange, Putnam and Dutchess? How can the meager MTA services they receive be worth as much as the “mobility” of customers and employees of a Wall Street firm?
If a payroll tax is unavoidable, grade it by sub-regions within the MTA world. Manhattan corporations, who benefit most by the commuter rail system, should pay a higher rate than suburban employers. Local taxing entities – municipalities and school districts – should be exempt so property taxes don’t soar further.
Legislators objecting to tolls have raised legitimate points, ignored by critics: who trusts the MTA’s numbers? Who believes all has been done to reduce costs, scale back compensation, make budgets transparent? Where is the independent audit? If we must act now, then sunset provisions for a year, subject to a full public audit. We can revisit the matter with the numbers before us.
Undoubtedly, raising riders’ rates 30% and cutting back service is a draconian alternative. But that’s the MTA’s threat to quash legitimate critiques and concerns.
We are rolling down this track far too fast and will live to regret our hasty decisions.
Assemblyman George Latimer
91st Assembly District