Eight Senate Democrats Join GOP in Vote to Repeal MTA Payroll Tax
In a 40-22 vote last night, the State Senate voted to phase out the payroll mobility tax, which generates about $1.5 billion per year for the MTA. The Senate proposal would eliminate the tax entirely in suburban areas while reducing it in New York City. Though the bill is expected to go exactly nowhere in the Democratic Assembly, it’s a sign of the intense opposition to the payroll tax among Republicans and in the suburbs, as well as the collective delusion about the state of the MTA’s finances.

New York City Democrats Carl Kruger (yes, he still votes) and Malcolm Smith both reversed their 2009 support for transit funding that their constituents rely on -- the payroll mobility tax -- in last night's vote.
Under the bill, sponsored by Long Island Senator Lee Zeldin and Majority Leader Dean Skelos among others, small businesses and schools would first be exempted from the payroll tax. By 2014, the seven suburban counties of the MTA region would be exempt while the New York City payroll tax would be cut by more than a third.
In addition to every member of the Republican majority, the bill garnered the votes of eight Democrats. Every Democratic state senator from outside New York City voted to repeal the payroll tax. Shockingly, so did Queens Senator Malcolm Smith, who while majority leader in 2009 was responsible for shepherding through the Senate the MTA funding package that had the payroll tax as its centerpiece. Every Senate Democrat voted for that bill at the time, meaning the six non-freshmen Democratic nays from last night flipped their votes (here’s the roll call), whether because of a different political climate or the knowledge that this was merely a symbolic vote.
The Senate Republicans estimate that reducing the payroll tax by this much would take roughly $840 million away from the MTA each year. Their bill does include a few offsets in the form of existing revenues redirected to the MTA, which they claim would leave $375 million in total cuts to transit.
Capitol Tonight reporter Liz Benjamin, however, spoke to one source who said those offset estimates were wildly off the mark. Benjamin reports:
According to an Albany insider who crunched the numbers of this, by the time the bill is fully implemented in 2014, it would generate a budget gap for the MTA of about $800 million a year. That would be offset slightly by a statewide sales tax intercept, but the annual estimated hit to the authority is still hovering at about $768 million, this source maintains.
Even more fantastically, the Republicans are claiming that their cuts need not result in any increased fares or reduced service.



