By ALEX COSTELLO and AMANDA HOFFMANN
The MTA bailout and reform package, passed by the state Senate and Assembly last week, prevents massive fare hikes, but adds a payroll tax that could be a burden to many Long Island businesses and school districts, which are expected to pay the tax, but could be reimbursed by the state for the cost. The .34 percent Metropolitan Commuter Transportation Mobility Tax — $3.40 per $1,000 of an employer’s payroll — is expected to raise $1.53 billion annually.
The problem is, it remains unclear exactly how school districts will be reimbursed for the payroll tax. “School districts should not be used as an ATM to fund the MTA,” said Dr. Herb Brown, superintendent of Oceanside Schools. Brown is concerned that while the state says now that it will repay school districts, there is nothing to stop it from reneging in the future. “Whether or not they continue to reimburse us is an issue I think needs to be confirmed,” he said.
The payments that schools have to make, nearly $230,000 in Oceanside and more than $46,000 in Island Park, will not cause a delay in the districts' budget votes, which take place on Tuesday. “This will have no impact on the Oceanside budget and our kids,” said Brown, “and we will fight to make sure the state reimburses us.” In Oceanside, the money will be redirected from other parts of the budget. The Island Park school budget, in contrast, accounted for the possibility of the tax, and funds set aside for that purpose will be used to pay it.
“We have the resources available to take care of this,” said Dr. Edward Price, superintendent of Island Park Schools. “If we get the reimbursement, that would be terrific.”
Nassau BOCES, which is paid for by the county’s 54 school districts, will also be directly affected by the payroll tax. According to Assemblyman Harvey Weisenberg (D-Long Beach), BOCES will face nearly $1 million in taxes, which would be distributed among school districts across Long Island. And there are still questions about whether BOCES, which is not a school district, will be reimbursed. If it is not, schools would have to absorb their portion of the BOCES payment — which would mean higher taxes for residents in the future.
“BOCES is part of this — they have to pay their share, then they bill back the school districts,” said Brown. “They don't exist without us paying them.” The question, Brown said, is whether the school districts will get any of that money back.
Libraries are also taking a hit with the payroll tax, which will ultimately be passed down to the users — taxpayers. The Oceanside Public Library is facing a cost of about $6,500 from the payroll tax, which won't create a spike in taxes this year, but will likely be built into future budgets. The Island Park Public Library is paying less, just under $2,000, but with no budget increase to taxpayers in its proposed 2009-10 budget, the facility is already tightly accounting for every dollar spent.
“It wasn't figured into the budget because we didn't really expect it to happen,” said Ronnie Swett, director of the Island Park Library. “Our budget has been approved by the board. We'd have to take it away from some other area or category in the budget.”
The bailout plan reduces the fare hikes the MTA approved earlier this year, but does not eliminate them. The MTA originally planned to raise the price of a monthly ticket from $211 to $267. Under the bailout plan, ticket prices will go up about 10 percent, meaning that a monthly ticket should cost about $232.
Barbra Rubin, president of the Island Park Chamber of Commerce, said that raising fares, on top of the additional taxes, is just taking more money away from local businesses. “If people are spending more money on the train,” Rubin said, “then that's less they have to spend at local businesses.
“If they were raising rates to give us really phenomenal service, I would say yes,” she added. “But the service is going to be worse, because it continually gets worse.”
While no one is pleased with the most contentious aspect of the bailout plan — the payroll tax — some people and institutions have already accepted that they are going to have to pay it. “Are we pleased? No,” said Price. “But what are you going to do? It's done.”
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