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MTA: Suits over tax could spur more cuts, fare hikes

Nassau County Executive Ed Mangano announces the county

Nassau County Executive Ed Mangano announces the county has filed a lawsuit against the MTA, Thursday. (July 29, 2010) Photo Credit: Howard Schnapp

If any of the lawsuits aimed at the MTA's unpopular payroll tax are successful, Long Island Rail Road riders and other commuters could be hit with fare hikes of more than 30 percent and service cuts far deeper than those already adopted, transit officials said Friday.

Nassau County on Thursday became the latest disenchanted taxpayer to file a lawsuit looking to have the tax declared unconstitutional. The tax, adopted by the State Legislature last year as part of a nearly $3-billion MTA rescue package, charges employers in the 12 counties served by the MTA 34 cents for every $100 of payroll.

The towns of Southampton, Southold, Brookhaven and Smithtown also have filed suits against the state and the Metropolitan Transportation Authority, as have the William Floyd School District and Long Island businessman William Schoolman. Four other Suffolk towns say they also plan to sue.

Although the tax has fallen significantly short of state projections since it was enacted more than a year ago, MTA spokesman Jeremy Soffin said Friday that it remains an integral part of keeping the region's transit system moving.

Without the $1.2 billion the payroll tax generates annually, Soffin said the MTA's only move would be to further cut service and hike fares. He noted that the 7.5-percent fare revenue hike that the MTA proposed this week would generate $400 million - a third of what the tax does. The widespread service cuts the MTA approved this year saved just $100,000.

"It's the legislature's responsibility to determine what taxes are levied . . . we desperately need those funds to provide the service that we provide," Soffin said.

But public officials from the outskirts of the MTA's service area say the agency's financial woes are not their problem. Southampton typically gets five LIRR trains on a weekday and no MTA bus service, but town government pays $130,000 in the payroll tax each year, town attorney Michael Sordi said.

"It's an onerous tax, not just on the municipalities, but on all businesses," said Sordi, adding that it is important that local governments stand together against the tax in court. "And hopefully the court of public opinion will take heed come Election Day as well."

Smithtown Supervisor Patrick Vecchio said the tax is "totally unfair" because it asks "suburbanites to pay for a service that most of them don't use."

MTA board member Mitchell Pally, of Stony Brook, said that while he understood the anger voiced by suburban counties, the MTA was created under the philosophy that everyone benefits from a robust transit system - not only those who use it. And so everyone should pay for it.

"It's a question of the responsibility of those who don't use the system to help those who do use the system," Pally said. "For every dollar you make somebody not pay, somebody else has to pay more."

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