NY Building Congress Announces Voluntary Payment of Payroll Mobility Tax

All things considered, it’s been a good couple of weeks for the MTA. They’ve been called “magical.” Newspapers are lining up to support more funding for the agency. The Governor is going to Washington to plead for more cash. And now, the once-reviled Authority has another ally going to bat for it: the NY Buiding Congress (NYBC).

As a result of last December’s Payroll Mobility Tax (PMT) rollback NYBC, and similar groups like Tri-State, are exempt from the mobility tax payment because their payrolls are less than $1.25 million a year. In a press release today, however, NYBC called for the reinstatement of the PMT, and announced they are putting their money where their mouth is: the non-profit will now voluntarily pay the tax they no longer have to pay.

Since its adoption, the PMT, which in 2011 brought in $1.5 billion for the MTA, has faced repeated attacks from suburban legislators, and most recently, from a Nassau County judge that declared the 2009 law authorizing the tax “unconstitutional.” His rationale? He argued the MTA “does not serve a substantial state interest,” and therefore the state legislature did not have the authority to enact the tax.  This claim is proving particularly false now that the State Comptroller’s Office is calculating that a briefly shuttered transit system resulting from Hurricane Sandy will add up to large losses in state revenue.  In fact, according to the MTA, every day the system was down they lost $18 million in revenue and Governor Cuomo estimated that the downstate region alone lost $6 billion in economic revenue as a result of the storm.

In today’s press release, the president of NYBC, Richard T Anderson, stated:

By seeking to eliminate the PMT, public officials advocating repeal are playing with fire. As the impact of the hurricane on our system so amply demonstrated, the State—indeed, the whole region—simply cannot survive economically without a well-functioning mass transit system. It is too important to our economy to be the subject of political brinksmanship, and it must have the funding it needs to rebuild and carry our economy forward.

As NYBC also highlights, even before the storm, the Authority’s precarious financial balance is already teetering on the cusp of three key assumptions:

  1. Labor costs will be controlled through a proposed “three zeros” contract for 2012-2014, where salary increases will be offset by higher productivity or concessions.
  2. The plan does not project any new debt after the end of the 2010-2014 capital campaign, meaning the next capital program will require a new source of revenue over and above any revenues now collected by the MTA.
  3. A series of already-scheduled, 7.5 percent fare and toll hikes will be approved by the MTA board in early 2013 and 2015.

NYBC’s voluntary PMT contribution can’t fund the authority alone.  In addition to calling for more funding from Albany, they are urging others to join their campaign. Tri-State will be doing just that.


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