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Whither the MTA payroll tax repeal?

Senate Democrats are seizing on the absence of the MTA payroll tax in the budget deal as a sign the GOP is breaking a campaign promise to repeal the levy.

While debating budget bills on the Senate floor, several Democratic senators have questioned their Republican colleagues about why they didn’t push for repealing that tax while taking a hard line on allowing the millionaires tax to expire. The MTA payroll tax affects businesses and non-profits in 12 downstate counties and raises about $1.4 billion for public transit.

The Democrats’ point? While Republican challengers last year such as Jack Martins (R-Mineola) and Lee Zeldin (R-Shirley) effectively campaigned on repealing the tax in hard-fought elections, the Senate leadership did not push for eliminating the levy in the budget deal. That’s the arena where they would have the most leverage over the Democratically-controlled Assembly, which supports the levy.

Should Senate repeal the tax after the budget, it almost surely will be a one-house bill without support from the Assembly. “That’s nothing but an empty promise to hide the broken promises,” said Austin Shafran, a Senate Democrats spokesman.

Sen. John DeFrancisco (R-Syracuse), chairman of the Senate Finance Committee and the GOP point man on the budget, said the economy had not recovered enough to yank revenue from the MTA.

“Right now, we can’t do it. The revenue is not there,” DeFrancisco said. “We’re hoping in the future it can be done when the economy kicks in.”

At one point, Senate Majority Leader Dean Skelos (R-Rockville Centre) rose on the Senate floor to point out that the millionaires tax and MTA payroll tax were different -- one was set to expire, the other is not. DeFrancisco also said the revenue goes to different places -- millionaires tax directly to the general fund, payroll tax to the MTA.

Skelos noted that both taxes were “imposed on the MTA region when the Democrats controlled every branch of government.”

Sen. Charles Fuschillo, (R-Merrick), suggested Democrats were being hypocritical.

"I'm a little confused. You're for the tax and then you're against the tax," Fuschillo said. "Don’t tell us you’re against it today when two years ago … you voted for it."

Sen. Liz Krueger (D-Manhattan), ranking Finance Committee member, responded: “This body could enact an expiration date on the MTA payroll tax but I don’t believe it does.”

GOP spokesman Scott Reif points out the Senate included an MTA payroll tax exemption for school districts in its one-house budget bill, but the provision did not survive in the compromise package with Gov. Andrew M. Cuomo, a Democrat, and Assembly Speaker Sheldon Silver (D-Manhattan).

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