PINE BUSH � It wasn't unexpected, but it wasn't welcome nonetheless. The threatened "Mobility Tax," designed to raise money for the cash-strapped MTA, was passed 32-30 by Senate Democrats on May 5, on a party line vote. The tax will be on the payrolls of Orange County small businesses, not-for-profits, and local governments.

After days of behind-closed-doors wrangling, the legislative leaders set the payroll tax at the same level in all 12 counties that contribute to the MTA. That means a tax of 34 cents for every $100 of payroll. Earlier, however, there had been hope that a senate proposal for a lower rate in the three outermost counties, including Orange, would have reduced their tax to 25 cents per $100 of payroll. The payroll tax is slated to produce $1.53 billion a year.

State Senator John Bonacic's reaction was not unexpected, either.

"This tax will take millions out of the collective small businesses of the Hudson Valley. Those millions of dollars would have circulated throughout the Hudson Valley in terms of employee salaries, job creation, and investment. Now that money will be taken and put into New York City's subway and bus system."

The MTA is facing a projected $1.2 billion deficit this year, and the "Mobility Tax" was recommended to Governor David A. Paterson last December by the Commission on Metropolitan Transportation Authority Financing, headed by former MTA chairman Richard Ravitch. The tax would amount to one third of one percent of both wages for employees and net earnings for the self-employed. It is hoped to raise $1.5 billion a year this way.

Without the tax, or state funding to cover the MTA's deficit, services would have to be cut and fares and tolls would rise 25 to 30 percent.

"The New York City Democrats," said Senator Bonacic, "who control state government, obviously know nothing about transportation in the Mid-Hudson Valley. The MTA is the city and suburban version of the Thruway. Thruway drivers pay to operate the Thruway. We don't get to tax the people of Manhattan to keep tolls down. Yet we are being asked to subsidize the MTA even more whether we use it or not.

"The MTA offers very limited service in Orange County now," said Bonacic. "Less than 4 percent of Orange County residents use it, yet 100 percent of Orange County businesses will pay the payroll tax."

Asked whether this tax on Orange County was just the beginning of something that could expand, Bonacic said, "Yes. That is why even though the MTA payroll tax is hitting Orange County today, people in Ulster and Sullivan should be concerned. What starts as a tax on Orange County can quickly move to a tax on Ulster and Sullivan Counties, too."

That should be borne in mind when considering the projections on the MTA deficit. Because of the loss of revenues from other sources due to the weak economy, the MTA has projected deficits of $2.4 billion in 2010, $2.6 billion in 2011, and nearly $3 billion in 2012.

Dan Depew, Representative of the 18th district in Orange County, pointed to issues that disturb him about the MTA.

"How about controlling expenditures there?" he said. "MTA management wastes money like they think they grow it or something. They need to look at cutting their costs. They need to look at their legacy benefit plans, at their deals with the unions � everything. There's a lot of waste there, and in this economic climate, that's got to go."

Depew added, "The other side of this is that the subsidies for mass transit should be reconsidered. If user costs were to reflect real costs, then perhaps a lot of people would stop commuting and work from home more. Having to pay the real cost of something gives people real incentives to save."

Andrea Nilon of the Town of Crawford Democrats said, "As a candidate for the 18th Legislative District, I am strongly opposed to any new MTA tax. A tax of 34 cents for every $100 of payroll here in Orange County is unacceptable. Orange County has only a one-quarter share of one representative on the MTA Board and pays more than our fair share of the MTA budget in other MTA taxes levied through several methods of taxation (sales, transfer, phone, etc.) With only a very small population served by the system � particularly in the northwestern area of Orange County � residents are paying disproportionately to the service provided.

"This tax will affect local and county government as well, including employees in the state prison system � a large employer in our area � effectively increasing the already overburdened property tax. In addition to the effect on government, small businesses � already struggling � will suffer and downtown will see additional empty storefronts."

Meanwhile, Senator Bonacic concluded that, "We always said if the senate was taken over by New York City based Democrats, they would push through a tax and spend agenda that hurts our region and helps the city. Senate Democrats have lost any argument [that] they speak for anyone but New York City and the immediate suburbs. They claimed we are "One New York," but apparently we are "Their New York."

COMMENTS about this article (8)