MTA Payroll Tax Stifling Economic Growth

Editorial by Assemblywoman Nicole Malliotakis (R,C-Brooklyn, Staten Island)
October 24, 2011

Coming off an extremely successful legislative session that closed a $10 billion budget deficit without any new or increased taxes, Governor Cuomo has turned state government’s attention to job creation as our number one priority. Our main goal is to send a signal to job creators and business owners around the world that New York is open for business, furthering our efforts to attract the employment we need to turn our economy around. Yet, among the miles of red tape we heap on business owners in New York, one tax is so onerous that it is directly discouraging businesses from hiring new employees. The levy in question is the MTA Payroll Tax.

The message that the MTA Payroll Tax sends to business owners, non-profits, and job creators is that we will penalize you for every single job you create, and every single dollar you pay in salary. This fee hits businesses right where it counts, taking a chunk out of their ability to hire employees. In a time of fiscal crisis, state government needs to cut costs wherever possible. By preventing businesses from meeting their full hiring potential, we are driving up unemployment and adding a gigantic burden to the state’s coffers. No matter how you slice it, this is a regressive tax hitting job creators at the worst possible time – a prolonged, economic slump.

While the tax takes a heavy toll on our economy, it strikes our schools as well. Both public and private schools face this levy, forcing them to choose between eliminating curriculum and programs, and eliminating faculty. As Mayor Bloomberg proposes massive layoffs across the city’s school system, now is not the time for state government to pinch our school budgets any further. Public schools are reimbursed for their payments, but there is not enough money in the coffers to cover the cost even temporarily. Furthermore, private schools receive no refund, and when private schools are forced to close, the students have to transfer into public schools at a higher cost to taxpayers.

The MTA is one of the linchpins that make our city function. It is a critically important agency that millions of New Yorkers rely on every day to get to work, see their doctor and visit their loved ones. We certainly need to support the MTA. However, the payroll tax is the wrong way to do so.