The proposed reinstatement of a commuter tax on Long Island residents who work in New York City was the topic of discussion at a recent hearing sponsored by Suffolk Assemblyman Thomas F. Barraga, the ranking Republican on the Assembly Ways and Means Committee, and his colleagues in the Assembly Republican Long Island Delegation. The hearing was held in Northport on Jan. 23 and was attended by several local elected officials.

The commuter tax was originally instated in 1966 as a temporary tax on New York State residents who work in New York City but live outside the five boroughs. Back then, the tax was .025 percent on wages and .375 percent on net earnings for the self-employed. The "temporary" set of rates were increased to .45 percent on wages and .65 percent on net earning from self-employment in 1973. In 1999, over 30 years after the tax was instated, Governor George Pataki signed into law legislation which eliminated the tax, saving commuters from Nassau County approximately $77 million a year and the total of all New York commuters about $210 million. Nassau County commuters were paying approximately 21 percent of the tax revenues and Suffolk was paying about eight percent.

Last year, New York City Mayor Mike Bloomberg, in figuring out his budget, proposed to not just reinstate the commuter tax, but to increase it to 2.7 percent for city non-residents. At the same time, which puzzles many officials, he said he planned to lower the income tax for city residents.

Included on the hearing panel with Assemblyman Barraga (R,C,RTL-West Islip), were Assemblymembers James D. Conte (R-Huntington), Steve Labriola (R-Massapequa), David McDonough (R,C,I-Merrick), Maureen O'Connell (R,C,I-East Williston), Andrew Raia (R,C-East Northport), Michael Fitzpatrick (R,C-Smithtown), Patricia L. Acampora (R,I,C-Mattituck) and Fred W. Thiele, Jr. (R,I,WF-Sag Harbor).

"Before any decisions are made, we must seek comment from the commuters, business owners and local public officials who will most be affected by reinstating the commuter tax," McDonough said. "Today's hearing is only the beginning of the long process that will help determine how this issue develops in the state Capitol."

"This public hearing concerning the reinstatement of the New York City commuter tax is an important issue for this 2003 Legislative Session. The reinstatement of this piece of legislation will negatively affect many of the families who call Long Island home," said Labriola.

McDonough stressed that the reinstatement of the commuter tax would be extremely detrimental, both to non-resident commuters and city businesses.

"It would bring an overwhelming burden to the average suburban commuter because obviously property taxes in Nassau, Suffolk [and other counties] have been rising; there's a strong possibility that MTA is going to be raising fairs; and I think that what we, as non-city residents, contribute to the City of New York is rather substantial in the dollars that are spent there. If they drive businesses out because of taxes, then they're going to lose those corporate taxes too."

McDonough said that commuters already contribute a large cash flow to New York. He said that while the mayor is correct in saying that there are many services provided in the city, such as medical emergency, fire and police; that there is also a large income that flows into New York City from people's pockets who live in outline counties. He noted that if, for example, everybody who worked in the city brown-bagged their lunches for just one day, there would be a great loss in both tax revenue and business revenue.

"Think of the amount of money commuters pour into New York City at holiday time, Christmas shopping, the Broadway shows [and] dinners. So they are already contributing greatly," he said. "To me it would be the same as asking tourists to pay a tax. We want them to bring their money in, and the city provides tourists with the same protection."

If the tax were to be enacted at the proposed 2.7 percent rate, a person with an annual income of $30,000 would pay $810 a year. A person with an annual income of $50,000 would pay $1,350, and a person with a $70,000 yearly income would pay $1,890 in taxes.

Overall, McDonough said that the hearing basically affirmed that residents and public officials alike are against the tax. Many local public officials gave testimony during the hearing, including representatives for Suffolk County Executive, Town Councilmembers from Suffolk County, Nassau Deputy Presiding Officer Roger Corbin, and a representative for Senator Carl Marcellino. Representatives from numerous local businesses also provided testimony, including Mitch Pally of the Long Island Association and Warren Tackenberg of the Village Association of Nassau County. McDonough noted that most of the testimony was given by members of Suffolk government, who talked about the fact that the tax would just be an additional cost on top of taxes that they have to impose locally.

"These things not only can drive people away, they can drive them right out of the state," he said.

"We voted to repeal the commuter tax in 1999 because it unfairly penalized Long Island taxpayers for not living in New York City," Barraga said. "I expect this to be a big issue this upcoming session, and as the ranking member of the Assembly Ways and Means Committee, I will have considerable input during the debate process that takes place before the bill is sent to the Assembly floor for a vote. This hearing will give me the opportunity to obtain first-hand evidence of how this tax will affect local governments, businesses and organizations."