Friday, February 13, 2009

MTA Payroll Tax Plan Faces Resistance Upstate

Business leaders and public officials from the northernmost counties in the New York Metropolitan Transportation Authority are voicing opposition to a proposed payroll tax intended to moderate fare increases proposed for the agency's trains and buses. The tax, which would raise $1.5 billion, was a cornerstone of Richard Ravitch's plan to keep the fare hikes at eight percent rather than 23 percent authorized by the MTA board.

Officials fear the tax would be detrimental to area schools and hospitals since all employers - public, private and nonprofit - would be subject to it. That means hospitals would have to raise fees and school taxes would rise to cover the extra cost, pegged at 33 center per $100 in salary.

Middletown school superindent Kenneth W. Eastwood told The New York Times the payroll tax would cost his district about $225,000, roughly equivalent to three and a half teacher salaries. “The thing that irks us is we’re really paying for somebody else’s problem,” he said. Only a small percentage of residents of Orange and Dutchess Counties use MTA's Metro North railroad to get to work.

Added State Sen. Steve Saland, R-Poughkeepsie: "At a time when local taxpayers are at the breaking point trying to pay their ever-increasing property taxes, the governor and the MTA want to increase that burden by instituting a payroll tax. It's ludicrous and blatantly unfair." According to Sen. Saland the tax would add a $3.3 million burden on school districts and governments in Dutchess County that would ultimately be borne by homeowners through property taxes.

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