By ALEX COSTELLO and MIKE RUSSO
School districts are expected to pay the tax, but could be reimbursed by the state for their cost. The 0.34 percent Metropolitan Commuter Transportation Mobility Tax — $3.40 per $1,000 of an employer's payroll — is expected to raise $1.53 billion annually.
It remains unclear exactly how school districts will be reimbursed. "The whole thing seems silly to us," said Dr. James Mapes, superintendent of Baldwin schools, questioning why the state wouldn't give the money directly to the MTA instead of levying a tax through the school districts. "We're always suspicious of things like that. It's easy to make promises about covering the cost, and it's not atypical that taxpayers will be left with another burden that they have to bear."
Board of Education Vice President B.A. Schoen also objected to the tax, citing the damaging effect it will have on the municipalities of the 12 counties. At a recent school board meeting, Schoen made the point that Nassau County is one of the few counties in the state that sends more money to Albany than it gets back. Similarly, New York sends more money to Washington, D.C. than it receives. The MTA tax, he said, would essentially put a tax on L.I. business, and have negative repercussions for the rest of the state.
"[Politicians] should be careful about killing the golden goose," Schoen said. "The downstate economy is the engine that drives the coffers of New York State, but business can be mobile. It can move out."
District officials said that the payroll tax would have no effect on school budget expenditure or the property tax levy, but that portions of the budget may have to be altered mid-year to make up the difference.
Senate Minority Leader Dean Skelos (R-Rockville Centre) echoed similar thoughts in a recent news release, stating that the governor should have simply exempted school districts if his true intention was to provide them with relief from the MTA tax.
Said Skelos: “Since Governor Paterson and others before him have sought to cut state aid to suburban school districts, there is no guarantee that they will ever get the reimbursement money from the state, and that means people paying the highest property taxes in the country will pay even more.”
Not only are school districts directly affected by the payroll tax, but so is Nassau BOCES, which is funded by the 54 school districts in Nassau County. According to Assemblyman Harvey Weisenberg (D-Long Beach), BOCES would face its own payroll tax, a cost that would be passed on to school districts across the county. And there are still questions about whether BOCES, which is not technically a school district, would be reimbursed by the state. If not, schools would have to absorb their portion of the BOCES payment —meaning higher taxes for residents in the future.
As Baldwin is not an incorporated village, it falls under the jurisdiction of the Town of Hempstead, which will have to pay $556,000 in new taxes to the MTA. Supervisor Kate Murray said the MTA tax will "kill jobs" and effectively drive businesses from the region, resulting in a worsening recession for Long Islanders.
"How is it that everyone else sees that the answer to a struggling economy is to free up resources and reduce the tax burden?" asked Murray, "but Governor Paterson, Senator [Malcolm] Smith and Assemblyman [Sheldon] Silver think that increasing taxes on government and businesses, which are already struggling to cope, is a positive step?"
Baldwin Chamber of Commerce Co-President Ginny Foley, who has worked tirelessly to bring businesses to Grand Avenue for the downtown revitalization project, said the tax will hit Baldwin especially hard, as the town is made up almost completely of small businesses.
"It's just another blow to small businesses and the people who work here," Foley said. "If you're selling something, it trickles down to your customers. If you have less in your paycheck, it trickles out to the businesses."
Baldwin Public Library officials estimate having to pay close to $7,000 in MTA payroll taxes. The library has proposed zero-percent budget and tax levy increases in each of the past two years, but officials anticipate there being less flexibility in spending during the upcoming year.
"Before I would have even started expecting the taxpayer to pick up the bill, I would have had a team of outside efficiency experts go over the way the MTA is being run," said library Director Maria Sysak,"because I am still not convinced they couldn't have done some trimming."
The Diocese of Rockville Centre, which operates 53 elementary schools, will also be affected by the tax. "Catholic education ... cannot continue to absorb the increasing burden placed on it by New York state when we are providing a great benefit to our society," Sean Dolan, the diocese's director of communications, wrote in an e-mail. "While we understand the need to keep the mass transit system solvent and affordable, there must be a sense of fairness to this payroll tax."
Republicans in both the Senate and Assembly unanimously voted against the bailout package, calling the payroll tax a “job killing tax hike.” “We were rewarding incompetence, as far as I’m concerned,” said Assemblyman Robert Barra (R-Lynbrook). “This is a group that has not done a good job. And now the taxpayers and the riders are going to take it right on the chin.”
The bailout plan reduces the fare hikes the MTA approved earlier this year, but does not eliminate them. The MTA initially planned to raise the price of a monthly ticket from Baldwin 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.
While no one is pleased with the most contentious aspect of the bailout plan — the payroll tax — some see it as an additional burden for Long Island, which is involved in its annual fight for its "fair share" of state school aid.
"Once again," said Barra, "[it] gives Long Island a sock right in the kisser."
Comments about this story? MRusso@liherald.com or (516) 569-4000 ext. 283.
