New York’s top court upholds MTA payroll tax

JENNIFER GUSTAVSON FILE PHOTO | A state Supreme Court ruled Wednesday controversial Metropolitan Transit Authority payroll tax is unconstitutional.
JENNIFER GUSTAVSON FILE PHOTO | The state Court of Appeals upheld a controversial Metropolitan Transit Authority payroll tax as constitutional Tuesday.

The MTA payroll tax is constitutional, according to the state’s highest court.

The New York Court of Appeals upheld a lower court’s ruling in June backing the controversial tax, which has long been opposed by Republican lawmakers and fiercely defended by Metropolitan Transit Authority officials.

Nassau County Executive Ed Mangano had sought to have the tax declared unconstitutional, and filed an appeal against the lower court’s ruling. But without comment, the Court of Appeals declined to hear the case Wednesday, dismissing the suit.

The tax was approved in 2009 and imposed a .34 percent levy on payroll for all employers, including schools and governments, in New York City and the seven surrounding suburban counties.

“This concludes a series of court rulings confirming that the [tax] is constitutional, and that funding the operation and improvement of essential transportation services provided by the MTA is a matter of substantial state concern,” the MTA wrote in a statement.

Mr. Mangano had claimed that the tax was unconstitutional because it altered tax policies of municipalities to fund something that wasn’t state-wide.

In a statement, Mr. Mangano’s office didn’t comment on the dismissal, choosing to claim victory for a partial rollback of the tax it said was inspired by the suit.

“County Executive Mangano’s lawsuit to protect Long Islanders against the MTA Payroll Tax was victorious in 2011 as it resulted in Governor Cuomo and the State Legislature eliminating the burden of the MTA Payroll Tax for thousands of small businesses.” said spokesman Brian Nevin in an email.

Then-County Legislator Ed Romaine and State Assemblyman Dan Losquadro, both Republicans, had also opposed the tax.

“I strongly disagree with the decision of the court,” said Mr. Romaine, now Brookhaven’s Town Supervisor. “I think there were constitutional grounds to challenge [the tax].”

Mr. Romaine said the tax would “make New York uncompetitive” in attracting new businesses, saying the levy was an unfair burden on local government, schools and taxpayers.

“We don’t see the dollar that we send to the MTA come back as investment in public transportation in Suffolk County,” he said. “We’re being taxed to provide services to New York City.”

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