Gov’s Proposed NYC Tax Hike: A Testament to Your Local Pols, New Yorkers

So it’s come to this. With transit revenues plummeting to the point where the MTA has to deal with a $400 million shortfall on top of an austerity plan that already calls for deep cuts in service, Governor Paterson yesterday proposed shifting the burden of the MTA payroll tax to fall heavily on New York City businesses. The idea is to tax city payrolls at .54 percent and suburban payrolls at .17 percent, skewing the flat .34 percent rate established last spring.

fidler_kruger.jpgPerhaps the "Mobility Tax" should be renamed in honor of Lew Fidler and Carl Kruger.

The proposal would raise $230 million for transit — enough to avoid some damage but not enough to stave off the service cuts that have been announced or restore funding for student MetroCards. It would also come at a heavy price, discouraging businesses from hiring while unemployment remains stubbornly high. If the choice is between horrific service cuts and a 60 percent increase in the local payroll tax, then the New York City economy is between a rock and a hard place.

Despite the fact that the MTA’s commuter rail lines, which keep
suburban roads from turning into parking lots, are already more heavily
subsidized than the subway
, we are poised to enact a policy that will
lessen the burden on the suburbs and hit the core of the region’s
economy the hardest.

Are bridge tolls or congestion pricing an option right now? The window to prevent this particular transit catastrophe by putting a price on wasteful driving probably isn’t open any longer — the revenue stream couldn’t start flowing fast enough to balance the MTA’s books. And the fact is, the same State Senate crew who killed bridge tolls last spring is still in power, and we’re nine months closer to election day.

So think of the New York City payroll tax hike, if it comes to pass, as a testament to the obstinacy of Carl Kruger, Pedro Espada, Ruben Diaz, Sr., and the disgraced Hiram Monserrate — as well as their GOP counterparts like Marty Golden and Andrew Lanza who sat idly by and did nothing to help the Ravitch plan last year.

Nine months after these NYC-based State Senators killed bridge tolls and
nearly two years after members of the city’s Assembly delegation
stopped congestion pricing in its tracks, we now face the distinct possibility that NYC businesses will end up shouldering more than three times the
payroll tax rate as suburban businesses. Think back to all the city politicians you’ve heard float make-believe proposals
about reinstating the commuter tax or making only non-NYC motorists pay
bridge tolls. This new tax on New York City — on their constituents — is their handiwork too.