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Court Strikes Down MTA Payroll Tax; Massive Transit Hikes Possible

Politicians Applaud Decision, But Riders Say They Don't Want To Get Slammed
Long Island Rail Road station - Hicksville, NY - Feb 28, 2012 (credit: Mike Xirinachs / WCBS 880)

Long Island Rail Road station – Hicksville, NY – Feb 28, 2012 (credit: Mike Xirinachs / WCBS 880)

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NEW YORK (CBSNewYork) — Astronomical fare hikes and deep service cuts are possibly on the horizon for suburban commuters. It’s all because a major court ruling against the Metropolitan Transportation Authority has put the agency in a financial bind — and commuters may have to cover the difference.

That has led many to ask if a crisis is coming for subway and train riders, CBS 2’s Marcia Kramer reported Thursday.

WCBS 880 Long Island Bureau Chief Mike Xirinachs On The Story


The screech of a subway rolling into the station is nothing compared to how commuters — bus and subway riders as well as Long Island Rail Road and Metro-North — are going to feel if a ruling by a Nassau County judge striking down the agency’s payroll mobility tax is allowed to stand.

“Without the payroll mobility tax the MTA would be forced to balance its budget with a combination of devastating service cuts and ever-increasing fare hikes,” MTA Chairman Joe Lhota said.

And we’re not talking chump change here. Originally passed in 2009, the tax, coupled with several smaller taxes also struck down, amounts to a whopping $1.8 billion. Businesses and not-for-profits in the 12-county MTA area that have had to pay the employee tax have been screaming for it to die.

Westchester County Executive Rob Astorino was pounding his chest in delight on Thursday.

“We’ve won an important victory with the court’s decision that this unfair burden on taxpayers was unconstitutional,” Astorino said.

Nassau County Executive Ed Mangano celebrated, saying: “This success sends a strong message to job creators that we will not allow residents to be nickeled and dimed to the poor house, nor will we allow job killing taxes to go unchallenged.”

Suffolk County Executive Steve Bellone told WCBS 880 that he was relieved by the ruling.

“This is a tax that many of our residents may have little or no service from the MTA, particularly people on the east end. So that’s a big relief and a big burden off of taxpayers,” he said.

But the MTA, which transports 8.5 million people a day to their jobs, said that if the ruling stands it would be an economic disaster for an already hurting region, taking 15 percent of the agency’s entire budget.

“That would be a catastrophe for the services the MTA provides. It would be a catastrophe for the entire region and the entire state’s economy that depends on it,” Lhota said.

The agency said it will appeal the ruling to the state Court of Appeals.

State Sen. Jack Martins urged the MTA not to appeal the decision.

“I am calling upon [New York State Attorney General] Eric Schneiderman to do the right thing and not appeal this decision and allow this MTA payroll tax to go the way of the dodo,” Martins told WCBS 880 Long Island Bureau Chief Mike Xirinachs on Thursday.

While elected officials applauded the ruling, riders weren’t celebrating. They expect fare hikes to make up for the massive budget gap created by the decision.

“I travel back and forth to White Plains and it costs a lot of money, so I don’t think I should have to foot the bill,” Camille Worrell of White Plains told CBS 2′s Hazel Sanchez.

“There’s a lot of sources to get money. But can’t always go after the payroll or the little guy,” added Bill David of New Fairfield, Conn.

“They always come back to the ridership. They give it to you from one side and take it away from the other side. So, the bottom line is it’s still gonna come out of your pocket,” rider Mike Holzberg told WCBS 880′s Xirinachs.

“I think it will hurt the economy because there’s no trickle-down of funding. People aren’t going to buy their lunches. They’re not going to buy their sodas or whatever, and then mom and pop stores are going to crash,” Nancy Okada of Woodside, Queens, told CBS 2′s Kramer.

“I think everybody’s going to get in shape because I’ll be walking,” another man added.

The subway fare is now $2.25, so CBS 2’s Kramer asked MTA head Lhota how much it would have to go up if the judgment is upheld. She asked if it could go to $2.75, to which Lhota responded “That’s nothing.” But bear in mind that this would be on top of two other fare hikes that are already in the pipeline for 2013 and 2015.

“It’s really sad that we have to keep paying and not get any better service,” said Sandy Joseph of Port Chester.

“We’re hard-working and if all our money goes to commute that’s not going to be good,” Hicksville’s Anamika Soni added.

What do you think? Sound off below.