Mangano, Martins celebrate MTA ruling

Richard Tedesco

Local government officials hailed the news of the state Supreme Court ruling that the MTA payroll tax is unconstitutional at a press conference with Nassau County Executive Edward Mangano last Thursday at the Theodore Roosevelt  Executive and Legislative Building.

“It’s been quite a week for the MTA,” said state Sen. Jack Martins (R-Mineola). “First they blew up the Second Avenue subway and then we blew up the MTA tax.

The press conference followed state Supreme Court Judge Bruce Cozzens decision in favor of claims filed by Nassau County and other municipaltiies.

Martins, who was mayor of Mineola when the village joined Nassau County in filing a lawsuit against the tax, also slammed the appeal the MTA intends to file in the case.

“Allow this MTA payroll tax to go the way of the Dodo on the trash heap with all the other things that do not belong in our society,” Martins said.

Martins said a revision of the tax that he sponsored in the last legislative session in the last legislative session saved $229 million countywide by exempting 70 percent of employers. The revision exempted schools and business with annual payrolls of $1.25 million or less from paying the MTA tax.

State Assemblyman Ed Ra echoed Martins’ sentiments saying, “I hope this is the final death knell for this tax so we can go forward and create jobs on Long Island.” 

“It’s not a windfall. We didn’t hit lotto but every little bit counts,” added Village of Mineola Mayor Scott Strauss.

Strauss said the MTA tax would have only cost the village $21,000 in its $18.86 million budget for 2013, but he said, “it’s $21,000 more than I had.”

Mangano called the court’s decision “a victory for the taxpayers in New York State” and “a great victory for small business owners and taxpayers in our county.” 

Mangano estimated county MTA expenses at $9.9 million from 2009 through 2012.

New Hyde Park Mayor Daniel Petruccio, whose village was also a party to the suit, said he welcomed the court’s ruling but added that he didn’t think the essential issue was resolved. 

“We’re not going to see a change in this system until they make the same adjustments municipalities have to make,” Petruccio said in a phone interview after the press conference. “This battle’s not over. We won a battle but not the war. We’re still in court. It’s going to cost us money in court.”

Petruccio said the MTA would find some other way to make up the revenue shortfall it would sustain if the court ruling stands, and the solution would inevitably have an impact on Long Island residents.

“Even if we ultimately prevail on this issue, the MTA will find other sources of revenue in the form of a tax and the fee, and people are still paying,” Petruccio said, adding, “If this was a private company, they’d be on the verge of bankruptcy. The gravy train is dry. There’s no surplus money out there.”

In his ruling, Cozzens noted that the original impetus for the tax passed by the state Legislature in May 2009 arose from a projected $1.8 billion shortfall for the Metropolitan Transportation Authority.

Cozzens ruling said the MTA payroll tax is unconstitutional based on the law surrounding Home Rule, which requires a two-thirds majority of the Legislature in both houses to pass. The bill was passed by 60 percent of the Assembly and 52 percent of the Senate.

“The MTA payroll tax is a special law, which does not serve a substantial state interest. This law should have been, according to the state Constitution, passed with either a Home Rule message or by message of necessity with two-thirds vote in each house. This did not occur, therefore this law was passed unconstitutionally,” Cozzens wrote. 

The MTA said it intended to appeal the court ruling, which could cost  the authority  $1.48 billion. 

“The MTA strongly believes that yesterday’s ruling from Nassau Supreme Court is erroneous. We will vigorously appeal it and we expect it will be overturned, since four similar Supreme Court cases making the same argument were previously dismissed,” said MTA spokesman Adam Lisberg last Thursday.

Lisberg said removing the revenue from the MTA payroll tax, would be “catastrophic” for the MTA and the state economy. 

MTA officials said that if the ruling was not overturned the authority would have to make up the lost revenue through fare increases, service cuts or both.

Attorney General Eric Schneiderman’s office has declined to comment on calls from Republican officials to not appeal the Supreme Court ruling.

Nassau County Attorney John Ciampoli said he planned to work on an order to submit to Cozzens’ court to seek retroactive repayment of the tax and cutting off the tax immediately. Failing a court order to summarily end the county’s obligation to pay the tax, Ciampoli said the money should be held in escrow.

“It’s an unconstitutional law. It was an unconstitutional law when it was passed,” Ciampoli said.

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