ALBANY - New York's top court upheld the controversial MTA payroll tax Tuesday, dismissing an appeal by Nassau County Executive Edward Mangano.
The Court of Appeals sustained a midlevel court decision that the tax, paid by employers in the 12-county region served by the Metropolitan Transportation Authority, is constitutional.
Without comment, the court declined to hear a Mangano lawsuit that sought to declare the tax unconstitutional.
Adopted after the 2008 financial meltdown, the MTA payroll tax provides more than $1.2 billion annually to fund the region's railroads, subways and buses, according to the authority. The state enacted the tax in 2009 when Democrats controlled both the Senate and Assembly.
Republicans in the New York suburbs successfully used the tax as 2010 campaign fodder when they regained Senate control. On Long Island, Sens. Jack Martins (R-Mineola) and Lee Zeldin (R-Shirley) unseated Democrats, in part because of anger about the tax. Since then, the state has partially rolled back the levy.
Mangano, a Republican, filed the lawsuit claiming the tax violated the state constitution because it changed the tax policies of individual municipalities for a purpose that didn't benefit the entire state.
The midlevel Appellate Division in June had rejected Mangano's claim, triggering his petition to the Court of Appeals.
The Appellate Division ruled that the legislature didn't need permission from Nassau and other suburban counties in the form of a "home rule" message to enact the tax. It said the tax "serves a substantial state concern. As such, it was not unconstitutionally passed without a home rule message."
Despite the court loss, a Mangano spokesman claimed victory -- saying the lawsuit helped spark the partial rollback of the tax for small businesses.
"County Executive Mangano's lawsuit to protect Long Islanders against the MTA payroll tax was victorious in 2011 as it resulted in Gov. Cuomo and the State Legislature eliminating the burden of the MTA payroll tax for thousands of small businesses," Mangano spokesman Brian Nevin said in an email.
The MTA had said the loss of the payroll tax revenue would have "catastrophic impact" on service for commuters.
"This concludes a series of court rulings confirming that the [payroll tax] is constitutional, and that funding the operation and improvement of essential transportation services provided by the MTA is a matter of substantial state concern," MTA spokesman Adam Lisberg said.
Martins and Zeldin said they would push for a full repeal of the tax.
"I'm disappointed at the decision, but just because the court found the MTA Payroll Tax to be constitutional, it doesn't make it right," Martins said in an email. "The Democrats pushed this tax onto the backs of our residents and businesses in 2009, and we're going to keep working toward its full repeal."
"The MTA payroll tax should have never been passed in the first place," said Zeldin, who is now campaigning for Congress. "Long Islanders should take notice of the consequences when one, New York City-centric party takes control of all branches of state" government.