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Long IslandNassau

Foley plan would lower MTA payroll tax on LI

State Sen. Brian X. Foley announced a plan Tuesday to lower the MTA payroll tax by 68 percent in Suffolk County and 34 percent in Nassau County.

The payroll tax, which the state adopted to help the MTA plug a $1.8 billion budget gap, charges 34 cents for every $100 in payroll to employers in the counties served by the transportation authority.

Foley's proposal would lower the tax to 11 cents per $100 in Suffolk and four upstate counties and 22.5 cents per $100 in Nassau and Westchester counties. The legislation has been proposed in the Assembly and Senate, and will likely be up for debate early next year, he said.

"None of us would like to pay any taxes, but this would be a significant reduction," said Foley (D-Blue Point). "We need to bring some relief to our business owners."Foley said the reduced payroll tax can continue to provide a healthy revenue stream for the MTA if the agency cuts costs internally.

Foley's proposal drew criticism from Republicans, who faulted the senator for voting in favor of the tax earlier this year. Foley responded that the payroll tax was approved as an emergency measure.

The payroll tax was the foundation of the State Legislature's $2.3 billion rescue of the struggling transit authority in May. But earlier this month, MTA officials announced that revenue from the tax had fallen 20 percent short of projections.

The shortfall, combined with cuts in state aid and an unfavorable arbitration ruling with a transit union, led the MTA to propose widespread service cuts earlier this week. The MTA board will vote on those cuts Wednesday.

The payroll tax has drawn the ire of many business owners on Long Island, including William Schoolman, owner of the Hampton Luxury Liner bus company, based in Bohemia.

At a news conference Tuesday Schoolman filed a lawsuit against the state Department of Taxation & Finance, the MTA and Gov. David A. Paterson, seeking to halt the tax altogether on grounds that it is unconstitutional and unfair. The suit looks to have the tax overturned on several grounds, including that it violates state law dictating that public authorities must be self-sustaining.

"I am outraged that I am forced to subsidize my competitors," said Schoolman, adding that his commuter coaches, which travel to destinations on Long Island and upstate New York, are a viable alternative to the MTA's commuter railroads.

"You can imagine my anger? When is enough, enough?" said Schoolman, who paid $18,000 in his first MTA payroll tax bill, "under protest."

Paterson and MTA officials declined to comment on Foley's proposal and Schoolman's lawsuit.


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