In 2009 the NYS Legislature passed the MTA Mobility or Payroll Tax on the businesses, municipalities, school districts, hospitals and not-for-profits in what is known as the Metropolitan Commuter Transit District (MCTD). The MCTD is essentially the 12 county area covered by the MTA from Long Island to the Hudson Valley. This MTA “Bailout” Tax, as it has become known, imposed a $.34 tariff on every $100 of payroll in order to raise $1.5 billion annually for the MTA.
On August 22nd NYS Supreme Court Judge R. Bruce Cozzens Jr. ruled this tax as unconstitutional for violating the New York State Constitution. This was the result of a lawsuit brought on originally by Nassau County.
In August of 2010, as County Legislator, I spearheaded the effort to have Westchester County join the suit as Putnam County had recently done. On August 10, 2010 Putnam County Legislator Vincent Tamagna joined me in a press conference where I announced this initiative. My colleagues on the Westchester County Board of Legislators unanimously agreed with me and voted to direct the County Attorney to have Westchester join the suit. County Executive Astorino agreed and also directed the County Attorney to officially join Nassau’s suit. In the end Nassau, Suffolk, Putnam and Westchester Counties were plaintiffs in the lawsuit along with 17 villages and towns scattered across the Hudson Valley.
Why was this unfunded, unfair and unconstitutional tax mandate so devastating to the County of Westchester and why did the court rule as it did?
The MTA Tax raises $104 million from Westchester alone which represents about $109 dollars for every man, woman and child in the county. This also represents the highest amount per capita outside of Manhattan and equals the combined contributions of Bronx and King Counties, without their access to an extensive MTA subway and bus service.
The $104 million is also in addition to the $165 million countywide already paid to the MTA via station maintenance fees and sales and use taxes. That means that the County of Westchester contributes over one quarter of a billion dollars to the MTA!
Tens of thousands of Connecticut residents utilize the MTA’s New Haven Line, accessing the rail service through Westchester, burdening our municipalities’ infrastructure and are not subject to this payroll tax!
Specifically, county government is forced to contribute $1.3 million a year to the MTA and since the tax has been imposed has contributed a total of $5 million. This on top of the $27 million in other fees we give annually to the MTA.
After weighing the facts of the case of how this tax came to be enacted, Judge Cozzens determined that the vote used to create the tax was not in compliance with the Constitution of the State of New York. The reason is that the state legislature violated the home rule provision required with this type of legislation. The MTA Tax is deemed a “special law” since it “does not serve the substantial state interest.” Which means that since this tax was to be imposed on only 12 of New York’s 62 counties it would require a home rule message from those affected. That was not done. Additionally, in the absence of a home rule message the law required a two-thirds vote of the entire NYS Legislature. This was not accomplished either. Since there were no Republican votes in either house for this law it only passed by 60% in the Assembly and 52% in the Senate, far short of the required two-thirds vote.
On August 23, 2012 I joined fellow state, county and local elected officials praising Judge Cozzen’s decision on the MTA Tax. While some State representatives fought this past year to obtain certain exemptions for the tax, its effect continues to thwart job growth and hurt businesses, organizations and municipalities throughout the state. Striking down this debilitating tax in total is the only way to move forward.
As a result of this ruling we are also calling for the retroactive reimbursement for payments that have been made since this unconstitutional law was enacted.
Although the MTA has stated it will “vigorously appeal” the ruling we are confidant the NYS Constitution and the Judge Cozzen’s ruling will prevail.