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MTA payroll tax is upheld - but lawsuit not over

Nassau County Executive Edward Mangano campaigning at the

Nassau County Executive Edward Mangano campaigning at the Merrick Fair. (Sept. 28, 2013) (Credit: Newsday / J. Conrad Williams Jr.)

New York's top court denied an appeal Thursday in a lawsuit seeking to overturn the controversial MTA payroll tax on constitutional grounds. But Nassau County Executive Edward Mangano, who filed the suit, still has 30 days to appeal on other grounds.

The state Court of Appeals dismissed Mangano's claim that a "substantial constitutional" issue is involved in his attempt to overturn the unpopular tax. The high court upheld a mid-level court ruling that the tax, paid by employers in the 12-county region served by the Metropolitan Transportation Authority, is constitutional.

Mangano had argued that the tax violated the state constitution because it changed the tax policies of individual municipalities for a purpose that did not benefit the entire state.

After losing at the mid-level court, Mangano's lawyers argued that because a constitutional question was involved, they had a right to bring the case directly to the Court of Appeals without asking the court's permission. The court Thursday said no.

Court spokesman Gary Spencer said Mangano has 30 days to file a motion asking the court's permission to argue the case on other grounds -- a deadline that will fall after Election Day. Mangano, a Republican, is running for re-election against Democrat Thomas Suozzi, a rematch of their 2009 contest in which Mangano unseated Suozzi.

Nassau County attorney John Ciampoli said Mangano definitely will appeal. Ciampoli said the payroll tax was "fundamentally defective in how it was adopted" by the state legislature.

The MTA hailed the ruling.

"Rejecting the county's appeal summarily, the state's highest court found the appeal raised no substantial constitutional question. We are pleased by the decision," MTA spokesman Adam Lisberg said in an email.

The MTA says the payroll tax provides more than $1.2 billion per year to fund the region's railroads, subways and buses, and that loss of the tax revenue would have a "catastrophic impact on the region's 8.5 million daily transit riders."

Then-Gov. David A. Paterson and the state legislature enacted the MTA payroll tax in 2009 after the stock market meltdown triggered a recession. The unpopular tax helped Republicans regain control of the State Senate in 2010. Since then, the state has partially rolled back the tax.

Numerous other local and county governments, including Suffolk, had joined the Nassau lawsuit, filed in 2010.

Tags: Edward Mangano , MTA tax , David Paterson , Dean Skelos , Court of Appeals

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