Westchester County Business Journal Fed Stimulus Funds to Derail MTA Payroll Tax?
Fed Stimulus Funds to Derail MTA Payroll Tax?
It’s a welcomed measure of financial relief coming from Congress, but opponents of the Metropolitan Transit Authority’s regional payroll tax hold scant hope that federal stimulus funds will be used by the MTA to reduce its operating deficit and derail the newly enacted state levy on employers before it gathers steam out of Albany.
The U.S. House of Representatives and Senate recently passed a supplemental appropriations bill that included an added provision to allow public transit agencies nationwide to use up to 10 percent of their American Recovery and Reinvestment Act funds for operating expenses. Previously those funds were restricted to capital improvement projects.
Rep. John Hall, the Hudson Valley Democrat, was among the letter-writers in Congress who pushed for the change and helped insert the provision in the spending bill that this month went to President Barack Obama for signing. Hall noted the provision will allow the MTA to use $110 million of its federal stimulus money for operating costs.
The 12-county payroll or mobility tax, expected to generate about $1.5 billion annually over the next two years, was approved by state legislators last month as a means to reduce the agency’s operating deficit and avert drastic service cuts and more severe fare and toll hikes. The first payment is due from employers and self-employed individuals within the MTA service region on Nov. 2. Those taxpayers, including nonprofits, small businesses and school districts, will pay 34 cents for every $100 of payroll expense.
Hall has asked the MTA to use the newly available stimulus funds to offset the payroll tax, specifically in the Hudson Valley counties included in his 19th congressional district – Westchester, Dutchess, Putnam, Orange and Rockland. With those counties slated to pay almost $90 million in the new levy, the MTA’s share of federal funds is “more than enough to end the payroll tax on Hudson Valley counties,” he said.
"The Hudson Valley is being disproportionately and unfairly hit by this tax," said Hall. "We need to take actions that will create jobs, not impose new taxes on payroll that will cut jobs."
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