MTA makes case for keeping payroll tax

A new report says LIRR has untapped potential

A new report says LIRR has untapped potential to transform the economies of Nassau and Suffolk. (Credit: Chris Ware)

Calling a court's repeal in August of the MTA payroll tax an "error," the MTA has filed a legal brief saying the tariff passes constitutional muster and must be reinstated.

"This error must be corrected," read the argument presented before New York Supreme Court, Appellate Division, which will decide Mangano v. Silver, referring to Nassau County Executive Edward Mangano and state Assembly Speaker Sheldon Silver (D-Manhattan) as litigants.

"The Legislature and decades of judicial precedent have conclusively established that funding for the MTA is a matter of substantial state concern," the 52-page brief continued.


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It invokes the state legislature's exclusive power to tax without implicating the home rule provision of the state constitution -- language that targets the linchpin of the lawsuit that overturned the tax.

Mangano could not be reached for comment.

The payroll tax, which many legislators and employers on Long Island found onerous, was enacted in 2009 to close the Metropolitan Transportation Authority's $1.8 billion budget gap.

It charges employers in the 12-county MTA service area 34 cents on each $100 of payroll. In 2009, Long Island's 13 towns and two counties paid more than $7.2 million. For instance, the Town of Hempstead paid $476,839 and Brookhaven Town $270,000.

Employers and legislators in Nassau, Suffolk and several other counties launched a lawsuit to repeal the tax, arguing it was unconstitutional because the state needed home rule messages from municipalities or a two-thirds vote in both houses of the State Legislature, neither of which occurred.

In August, a State Supreme Court judge sided with the plaintiffs, and MTA officials appealed the ruling despite some Republicans' pleas to let it stand.

But the MTA's response said the tax has nothing to do with the "property affairs or government" of the local municipalities. It argued that the home rule provision used in cases where the state and local legislatures share legislative power does not apply to the payroll tax.

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