Senator Steve Saland: The MTA Tax Equals Higher Property Taxes

Stephen M. Saland

March 27, 2009

The Metropolitan Transportation Authority (MTA), on the recommendation of the Ravitch Commission, has proposed a payroll tax on all wages in the Hudson Valley counties served by the MTA – Dutchess, Orange, Putnam, Westchester and Rockland. The Commission, instituted by the Governor to develop ideas to ease the MTA’s severe financial problems, proposed a tax of 33¢ on each $100 of wages paid in these five counties.

“At a time when local taxpayers are at the breaking point trying to pay their ever increasing property taxes, the Governor and the MTA want to increase that burden by instituting a payroll tax – it’s ludicrous and blatantly unfair,” said Senator Steve Saland (R,I,C Poughkeepsie). “This payroll tax would not just be levied on already struggling businesses, but on local governments, not-for-profits and school districts as well. Where will they get the money to pay these payroll taxes? From the wallets of local taxpayers.”

“With the Governor proposing to eliminate scheduled increases to local government assistance and incentive grants for shared services, and reduce school aid by approximately $1.1 billion, the addition of a payroll tax is an unreasonable hit on Hudson Valley property owners,” said Senator Saland. “The MTA proposes to rub salt in the wounds of local taxpayers. While our localities are being subjected to proposed cuts in aid, local property taxpayers would simultaneously be required to subsidize the activities of a public authority run by a board which was not elected by the people.”

Here’s how Hudson Valley taxpayers will be impacted by the public sector portion of the payroll tax:

Column 2 is the total wages for all state and local government and school district employees.

Column 3 is the MTA payroll tax of 33¢ for each $100 of wages .

Dutchess          $993.5 million           $3.3 million
Orange               $1.07 billion            $3.5 million
Putnam             $256.3 million              $845,865
Westchester         $3.6 billion          $11.8 million
Rockland           $1.09 billion            $3.6 million
Total                      $7 billion             $23 million

“With the economy as it is, this will be one heck of a financial burden on our district next year that could cause cuts to staff and programs. Even though only a few of our school district employees use the railroad, the MTA wants us to bail them out. This is a hardship at the wrong time and they need to find other ways to set the ship straight,” said Richard Powell, Superintendent of the Wappingers Central School District.

"The MTA must think that property taxes are not high enough so they're avoiding responsibility for their own mismanagement by hiding behind children and overburdened tax payers. Arlington's share of the proposed payroll tax would be $283,000 -- that means cutting four teachers or raising property taxes. We are doing everything possible to deal with the financial crisis in complete transparency but the MTA operates in complete obscurity. The electorate gets to vote on the school budget -- perhaps the electorate should be allowed to vote on the taxes levied by the MTA," said Frank Pepe, Superintendent of Arlington Central School District.

“The current property taxes that a property owner pays are already a burden. The adding of the proposed MTA payroll tax on schools and local governments will only add to that burden,” said Gary Cooper, Minority Leader of the Dutchess County Legislature.

The total impact for all Dutchess County school districts if this payroll tax is enacted would be $1.4 million. In total, Dutchess taxpayers would be asked to hand over $3.6 million more in taxes to support the MTA. Already Dutchess residents are paying five separate taxes and fees for a capital program that largely benefits New York City.

“Taxpayers in our area already support the MTA through sales tax and a petroleum business tax among others. We are all being asked to tighten our belts. Enough is enough – it’s time for the MTA to tighten its belt and not impose yet an additional burden on already overburdened taxpayers, “ Saland concluded.

Dutchess County School District 2007 Annualized Payroll

District                             Annualized                                 Payroll 1/3 of 1%

Arlington                            $85,812,077                                $283,180

Beacon                                24,368,879                                    80,417

Dover                                  13,379,049                                    44,151

DC BOCES                         23,917,087                                    78,926

Hyde Park                           35,756,516                                    117,997

Millbrook                               9,956,892                                      32,858

Pawling                                16,824,528                                     55,521

Pine Plains                            12,684,195                                     41,858

Poughkeepsie                        44,474,466                                   146,766

Rhinebeck                             13,720,000                                     45,276

Red Hook                              20,891,908                                     68,943

Spackenkill                             18,500,000                                     61,050

Wappingers                            96,000,000                                    316,800

Webutuck (Northeast)               8,693,000                                     28,687

Total                                       $424,978,597                            $1,402,430

Dutchess County BOCES

Dutchess County School District Business Offices