State pols, MTA chief spar over funding

Republican state senators sparred with the head of the MTA Thursday on how to finance the agency if the state repeals the MTA payroll tax that went into effect in summer 2009.

"In some way, shape or form, that tax is going to go," state Sen. Carl Marcellino (R-Syosset) told MTA chairman Jay Walder at a public hearing at SUNY Old Westbury.

Walder said any long-term financing solution to capital spending rested with the state. Marcellino rejected that notion but did not suggest any alternative funding sources.

The forum was a meeting of the State Senate Committee on Investigations and Government Operations, which Marcellino chairs.

It was billed as a hearing on "the finance, policies and practices" of the MTA, but Marcellino and two other Republican senators, Jack M. Martins of Mineola and Lee Zeldin of Shirley, pressed Walder to find a replacement for the payroll tax.

Walder said it would be difficult to make up for repealing the tax, which raises $1.4 billion annually. For example, severe service cuts imposed last year saved $82 million, he said, and a 7.5 percent fare increase generated $400 million.

"The decision where to place the burdens . . . the decisions about how to fund the MTA, senator, I believe are the legislature's question, not the MTA's question," Walder said. "The MTA cannot answer that question."

Marcellino gave no indication of how he would fill the gap if the tax were repealed but told Walder: "You have to find an alternative, and I take issue with it's not your problem to find the answer. . . . If you don't help us, we'll find an answer, and you might not like our answer."

Walder said he would be happy to work with the legislature and the governor on finding other funding sources.

After Democrats in the State Legislature passed the payroll tax in 2009 to help bail out the MTA, Republicans Zeldin and Martins defeated incumbent Democrats last fall to help the GOP regain control of the State Senate.

The Republican majority has made repeal of the payroll tax a priority, and Democratic Gov. Andrew M. Cuomo has said he is open to suggestions on how to replace it.