Downstate counties left out in the cold

Suffolk County Executive Steve Levy. (Dec. 7, 2011)

Suffolk County Executive Steve Levy. (Dec. 7, 2011) (Credit: Joseph D. Sullivan)

Rick Brand

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Counties, like Rodney Dangerfield, seem to get no respect.

In their surprise scramble last week to roll back the MTA payroll tax, Gov. Andrew M. Cuomo and Albany lawmakers provided no relief to the governments of the seven downstate counties surrounding New York City. Towns, villages and cities were also left out in the cold.

While the MTA payroll tax was supposed to be collected for those who benefit from MTA transit services, those who work in county and town governments typically have no need to commute by trains or subways. The controversial tax was imposed two years ago when Mayor Bloomberg's bid for congestion pricing fell through, raising suburban protests.

For the counties alone, the tax totals $9.5 million, with Suffolk leading the way with a $3.5 million tab and Nassau next at $2.9 million.

As state lawmakers debated the measure in special session last week, county executives from five of the downstate counties made a last-minute appeal to be spared from the "egregious" and "ill-conceived tax."

"Our counties represent nearly 5 million people; together we pay $9,503,794 in taxes to support the MTA," their letter stated. "This figure grows by leaps and bounds when you add in the MTA payroll tax paid by villages, towns and cities . . . In these tough economic times, the MTA payroll tax is a hardship we cannot afford to bear for even another day."

The state traditionally has had little sympathy for counties. That's because the large ones, such as Nassau and Suffolk, with extensive property tax bases and the ability to levy sales taxes, often are seen as deep pockets that can be tapped to help cover the cost of programs like Medicaid and services to preschool children with disabilities.

Suffolk County Executive Steve Levy, who signed the protest letter, said that when the state imposes charges on counties or cuts state aid to programs such as county health centers, the local governments have to deal with the consequences. "When the state slashes aid, it's the county that has to cut services, so people come to us to complain, not the state," he said.

Levy said county and town officials have far less clout than school districts, which can rally widespread support from PTAs, teacher unions and school board groups. "They just have more muscle," he said.

Desmond Ryan, a veteran Albany lobbyist, said local governments often take the hit because the state "takes the path of least resistance."

One county executive who did not sign the letter was Nassau's Edward Mangano, who is facing some of the most difficult fiscal problems of any county official in the state. A Mangano spokeswoman, Katie Grilli-Robles, said Mangano was "not available for comment."

Ryan said Mangano's reluctance probably is tied to the ongoing oversight of the Nassau Interim Finance Authority, the state board that took control of the county's finances in January. "Mangano has a sword hanging over his head," Ryan said.

Paul Sabatino, a former Levy aide and Suffolk legislative counsel, said state lawmakers often see local elected officials "as potential rivals" in future elections so there's little interest in helping them.

Charles T. Theofan, Long Beach city manager, called the state action on the MTA payroll tax "absurd," because in the end "local municipalities just have to pass along the cost to our taxpayers."

The Suffolk legislature's presiding officer, William Lindsay (D-Holbrook), said the state is squeezing local governments with aid cuts and the MTA tax, while capping property tax hikes at 2 percent per year, which prevents them from raising revenue to pay bills.

"I don't know the answer, but if local governments don't start getting relief pretty soon, we're not long for this world," Lindsay said.