Judge Ruled Last Month To Strike Down Payroll Mobility Tax

NEW YORK (CBSNewYork) – There could be huge fare hikes coming as a result of a ruling on a controversial tax imposed by the Metropolitan Transportation Authority, the agency’s chairman said.

A Long Island judge ruled last month to invalidate the suburban payroll mobility tax.

If the judge’s ruling stands, the fare hikes could be as much as 46% for the Long Island Rail Road and 32% for Metro-North trips, according to an analysis by the fiscal watchdog group Citizens Budget Commission.

WCBS 880’s John Metaxas reports

The tax, which is imposed on employers in seven counties around the city, could help the city raise $1.8 billion this year, according to the MTA.

“The payroll mobility tax is a very important funding source for our transit system, particularly the commuter rail. The revenue from the tax generates about 15% of the operating budget for the agency, so we’re talking a significant amount of money,” Veronica Vanterpool of the Tri-State Transportation Campaign told WCBS 880’s John Metaxas.

The MTA said it is planning to appeal the judge’s ruling.

1010 WINS’ Stan Brooks reports

MTA Chairman Joe Lhota said he thinks the ruling will be overturned on appeal, but issued a stark warning for what could happen if the ruling stands.

“If it’s not overturned, we’re going to be forced to implement a combination of severe and extreme service cuts and fare hikes. And the impact to our region’s economy will be catastrophic,” Lhota said.

Lhota said even if the ruling is overturned, the transit authority is mulling possibly ending the discount riders get when putting money on a MetroCard.

“Even if we eliminated the discount, we’d still hit our target of a $450 million increase in the total amount of net revenues that we will receive. The discounts aren’t enough not to have a fare increase,” Lhota told 1010 WINS’ Stan Brooks.

Riders currently get a 7% discount when adding at least $10 to a MetroCard.

“What commuters are going to see is a higher rail ticket for less service that’s less frequent, that’s less reliable and, quite frankly, maybe just less comfortable. It is not an even trade-off,” Vanterpool said.

Lhota said the agency will release a list of possible revenue-generating options in mid-October.

There are already two planned MTA fare hikes scheduled to take effect in 2013 and 2015.

How do you think this issue will get resolved? Are you already bracing for big fare hikes? Share your thoughts below…