A state Supreme Court justice recently ruled that the Metropolitan Transportation Authority payroll tax, which took effect in 2009, is unconstitutional. Officials in the suburban counties of New York City hailed the decision on the unpopular tax, which was implemented to help reduce a projected shortfall for the authority. The MTA is appealing the ruling.
The New York City-based Citizens Budget Commission estimates that removing the tax of 34 cents per $100 of payroll for employers in the Metropolitan Commuter Transportation District would require a 32 percent increase in Metro-North Railroad fares and a 46 percent hike in Long Island Railroad tickets. A monthly ticket for someone who commutes from White Plains to Grand Central Terminal would jump from $229 to $302, according to the group. That would be in addition to the scheduled 7.5 percent fare increase for all MTA riders in 2013.
The payroll tax raised more than $1.4 billion for the MTA in 2011, according to the Citizens Budget Commission. An estimated 70 percent came from New York City employers. Nearly 13 percent—$178 million—came from the five counties north of New York City. If the MTA didn’t collect the tax in the suburban counties, there would be a $459 million gap in the MTA budget, the CBC said.
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