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MTA Payroll Tax Ruled Unconstitutional

A State Supreme Court justice in Nassau County ruled on Wednesday that the MTA payroll tax is unconstitutional. The tax has been levied on all employees in Orange, Dutchess, Putnam, Rockland, Westchester, Nassau and Suffolk counties as well as the five boroughs of New York City.

Businesses and not-for-profits in the entire MTA region have been screaming bloody murder since the state legislature imposed the tax to help bail the New York City transportation system out of its massive financial woes.

Justice R. Bruce Cozzens, Jr. wrote in his seven page decision that the tax was unconstitutionally passed by the state legislature.

“The MTA payroll tax is a special law, which does not serve a substantial state interest,” Cozzens wrote. “This law should have been, according to the State Constitution, passed with either a Home Rule message or by message of necessity with two-thirds vote in each house. This did not occur, therefore this law was passed unconstitutionally.”

The MTA, meanwhile, issued a statement late Wednesday saying the agency will “vigorously appeal” the ruling. “We believe this opinion will be overturned, since four prior challenges to the constitutionality of the law making the same argument have been dismissed.”

Town of Chester Supervisor Stephen Neuhaus spearheaded the effort to have a number of towns in Orange County join the lawsuit originated by the County of Nassau.

“This is really a slam-dunk for the taxpayers and this really smacks in the face of all of the high taxing, high fees that New York has been famous for and has really been trying to get away from,” Neuhaus said.

The Orange County Chamber of Commerce was also a plaintiff in the case and its president, John D’Ambrosio, called the court decision “a real victory.” He said the Mid-Hudson should not have to subsidize other people’s commutes and he said people who drive to New York City for work should have to pay a user fee, in this case, by placing tolls on the MITA-operated bridges in the Big Apple.

State Senator Stephen Saland (R-Poughkeepsie) said this should be a wakeup call for the MTA to restructure the way it does business.

“They should be looking to find some way within which to restructure in a fashion in which lets the revenue hostages – the Dutchess counties, the Putnam counties, the Orange counties, the Rockland counties – off the hook, providing equity to people who really have little or no participation in Metro-North,” Saland said.

The counties of Putnam and Westchester were also plaintiffs in the case. Westchester County Executive Robert Astorino lauded the decision saying the tax “is essentially an unfunded mandate from Albany.”