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Albany says no bailout for MTA after payroll tax fails

ALBANY - Don't expect another bailout.

That's what lawmakers told the Metropolitan Transportation Authority on Tuesday after learning that a controversial payroll tax adopted in May hadn't produced the expected revenue.

The operator of the Long Island Rail Road, New York City Subway, Long Island Bus and other mass transit has warned of service cuts to close a $343-million gap in this year's budget, but ruled out a fare hike in 2010.

Much of the deficit stems from a $200-million shortfall in payroll-tax collections due to the economy and noncompliance. The levy remains a flash point on Long Island, with lawmakers still facing criticism for having supported it.

"None of us is going to agree to any additional funding for the authority . . . they need to put their house in order," said State Sen. Brian X. Foley (D-Blue Point).

He and others called on the MTA to cut costs through elimination of administrative functions and consolidation of support services for its divisions. The agency's budget this year totaled more than $10 billion and its board is expected to roll the deficit into the 2010 spending plan due for approval next week.

The MTA isn't seeking more money from Albany, given the state's multiyear budget deficits, said spokesman Jeremy Soffin. But he said service cuts "were part of the discussion" as the MTA considers its new budget.

Foley also has introduced a bill to scale back the payroll tax for employers farthest from New York City. It would lower the 34-cent levy on every $100 in salaries to 11 cents in Suffolk, Dutchess, Putnam, Orange and Rockland counties, and 23 cents in Nassau and Westchester. If the bill becomes law, the MTA would receive $1.3 billion, $187 million less than it originally anticipated.

Foley said, "there needs to be a proportional payroll tax for different areas."

The bill has bipartisan support in the Senate and was introduced in the Assembly by Assemb. Fred Thiele Jr. (I-Sag Harbor).

Still, the tax change faces resistance in the Democratic-controlled lower chamber. Assemb. Charles Lavine (D-Glen Cove) said he opposed the bill because the MTA serves as an "economic driver for the entire downstate region."

Lavine was one of three assembly members from the Island's 21-member delegation to back the $2.9-billion MTA bailout in May. Only two of the area's nine senators voted yes, Democrats Craig Johnson of Port Washington and Foley.

Johnson said Tuesday the bailout had provided "unprecedented resources" to the MTA, which now "must learn to live within its means." Johnson, who has veto power over transit projects as a member of the MTA Capital Program Review Board, said the agency wants a building program that costs billions of dollars more than it has.

Senate Republicans, seeking to regain the majority, have stoked criticism of the payroll tax. "It was perhaps the single most destructive thing that happened in Albany this year," said John McArdle, a top aide to Minority Leader Dean Skelos (R-Rockville Centre). "It's a tax on jobs and inhibits job creation."


The State Legislature in May approved a $2.9-billion bailout plan for the  Metropolitan Transportation Authority, averting scheduled service cuts and lowering fare hikes. A key  component of the plan, a payroll tax on employers, has failed so far to produce the needed revenue, the MTA said Monday.

State Senate
John Flanagan (R-East Northport)
Charles Fuschillo  (R-Merrick)
Kemp Hannon  (R-Garden City)
Owen Johnson (R-West Babylon)
Kenneth LaValle (R-Port Jefferson)
Carl Marcellino (R-Syosset)
Dean Skelos (R-Rockville Centre)
Brian X. Foley (D-Blue Point)
Craig Johnson (D-Port Washington)



Marc Alessi (D-Shoreham)
Robert Barra  (R-Lynbrook)
Phil Boyle (R-East Islip)
James Conte (R-Huntington Station)
Patricia Eddington (D-Medford)
Steven Englebright (D-Setauket)
Ginny Fields (D-Oakdale)
Michael Fitzpatrick (R-St. James)
David McDonough (R-Merrick)
Tom McKevitt (R-East Meadow)
Andrew Raia (R-East Northport)
Philip Ramos (D-Central Islip)
Joseph Saladino (R-Massapequa)
Robert Sweeney (D-Lindenhurst)
Fred Thiele Jr.  (R-Sag Harbor)
Rob Walker (R-Hicksville)
Harvey Weisenberg (D-Long Beach)

Earlene Hooper (D-Hempstead)
Charles Lavine (D-Glen Cove)
Michelle Schimel (D-Great Neck)

Thomas Alfano
(R-North Valley Stream)


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