NEW YORK (WBCS 880/1010 WINS) – How the MTA should be funded is a question for the state legislature, but the payroll tax is an important revenue source for the transit agency’s existence.

But there is growing tension over the payroll tax — which currently imposes a tax of 34 cents for every $100 of payroll in New York City and seven other counties including Suffolk and Nassau.

William Schoolman says his business — Hampton Luxury Liner — is in direct competition with the MTA. Schoolman filed a lawsuit to put an end to the tax — which he says costs his company over $20,000 per year.

“Why should I subsidize my competition? That’s absurd. I spend over $35 a day per bus to clean the bus and make sure the bathrooms are clean. I’d love to see someone find a clean bathroom on the Long Island Rail Road,” Schoolman told WCBS 880′s Sophia Hall.

LISTEN: WCBS 880 Reporter Sophia Hall talks with opponents of the MTA Payroll Tax

Suffolk County Executive Steve Levy agreed and expressed support for Schoolman’s lawsuit.

“Businesses on Long Island are paying the same amount as would a business in midtown Manhattan and yet the residents of Suffolk barely use the infrastructure of the MTA at all,” Levy told 1010 WINS.

Levy also said that the MTA should stop looking at ways to gain revenues and focus more on making cuts.

“What they need to do is look for more way to cut expenditures,” Levy said, “there’s a need for an overhaul.”