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Nassau Republicans Slam Payroll Tax

Emphasize Burdens on Local Municipalities

On Thursday morning, May 14 at the County Executive Building in Mineola, numerous local officials, including county legislators, village mayors, town supervisors, city managers, council members and other municipal officials joined the Long Island State Senate Republican contingent to denounce the $1.5 billion MTA Payroll Tax and what they termed as its “devastating” effect on municipalities and taxpayers.

Among the state senators in attendance were Minority Leader Dean Skelos, plus Kemp Hannon, Carl Marcellino and Charles J. Fuschillo, Jr.


Based on the state comptroller’s most recent report on Financial Data for Municipal Governments, Nassau County expects to hand over more than $3 million while the payroll tax’s impact on the county’s 64 villages will be close to $1.9 million.

The Village of Massapequa Park, the senators said, will see taxes at around $6,074. The Town of Oyster Bay is expected to be billed at around $314,901.

School Districts in Nassau County will see an initial $13.3 million tax. The Massapequa School District, the senators said, will pay up to $445,978 in taxes. The senators claimed that while there is intent to reimburse the schools, the law does not guarantee it.

In all, the senators criticized the bill, declaring that it would raise taxes, cost jobs, close businesses and the school tax reimbursement is not guaranteed. They added that there is no sunset provision in the law and that the payroll tax is retroactive to March 1, 2009 for municipalities and all others required to pay it, except for school districts which must begin in September, 2009. The first payment, the senators said, is due with the year’s 2nd quarterly filing in June unless the municipality or business pays electronically which is monthly.

“It’s the taxpayers who will be picking up the biggest mandated cost local governments have seen since Medicaid,” said Senator Skelos (R.-Rockville Centre). “In these difficult economic times, local governments are already scraping the bottom of the barrel to avoid layoffs and raising taxes – and then a payroll tax comes along making that impossible to do.”

“While it is crucial that we support our mass transit system, this MTA bailout plan fails everyone on Long Island,” added Senator Fuschillo (R.-Merrick), who represents much of the Massapequa area in Albany. “The payroll tax amounts to a costly unfunded mandate on every Long Island business, non-profit, local government, library, hospital, and school. Ultimately, this tax will be passed onto Long Island’s families who are already overburdened with high school taxes and a bad economy.”

Municipal officials in Long Island, the senators claimed, have said that the payroll tax will force them to cut more services and/or raise property taxes to pay for the new costs. And so, the senators were joined at the press conference by Nassau County Legislative Minority Leader Peter J. Schmitt, East Williston Mayor Nancy Zolezzi, Long Beach City Manager Charles Theofan, plus Town of Hempstead Supervisor Kate Murray, and Town of Oyster Bay Supervisor John Venditto. All took turns lambasting the payroll tax.

“This tax will cost the County over $3 million. That money should be used to restore the funding for youth and senior programs being cut or eliminated in Nassau due to the current fiscal crisis. Additional taxes will only worsen the economic situation here in Nassau and intensify the burden on our small businesses,” said Legislator Schmitt, who, too, represents a large slice of Massapequa in the county legislative chambers.

“In a time of great economic stress when people have lost their jobs and companies are looking to cut costs, it makes no sense to enact a tax on jobs,” added Mayor Zolezzi, who is currently serving as president of the Nassau County Village Officials. “The MTA bailout plan taxes jobs, and by including the payrolls of local governments, the MTA bailout plan places an additional tax burden on every real property taxpayer on Long Island.”

“We are a small City of 36,000 residents,” noted City Manager Theofan. “After having prepared my budget for 2009-2010, with budget hearings next week, I am informed that I must find an additional $100,000 to pay this inequitable payroll tax. Municipalities across this state will have no choice but to raise taxes or factor it into collective bargaining agreements with our municipal employees. Why should only school districts be reimbursed and not local government? This is the wrong solution to the MTA’s problem.”

“The MTA Payroll Tax is a ‘job killer’ in a time when we should be creating opportunities for our working families,” said Supervisor Murray. “During these tough economic times, this tax will push companies out of our region to more business friendly locations.”

“The impact of the payroll tax is nothing short of devastating to Long Island’s economy,” said Supervisor John Venditto. “In the current fiscal climate, it places an unnecessary additional hardship on already hard-pressed businesses, municipalities, school districts, charitable and non-profit organizations, the self-employed and, ultimately, on taxpayers, because the cost will be passed on to them in the form of higher taxes and prices for goods and services. No good will come of this tax because it does not address the long-term viability of the MTA and threatens the financial viability of those employers forced to pay it. Making the tax retroactive to March 1 only adds insult to injury. This oppressive tax should be repealed immediately!”

In response to the press conference, the offices of State Senator Craig M. Johnson (D.-Port Washington) issued the following statement.

“Senator Johnson stood up and successfully fought for a plan that protects schools and taxpayers whose school taxes make up roughly two thirds of their property tax bill, preserves mass transit on Long Island, and puts the MTA under unprecedented scrutiny.

“The Senate Republicans had no problem burdening local governments with unfunded mandates over the last 40 years, and had no problem sitting on their hands throughout this most recent process.

“They refused to offer any solutions to a very real problem they helped create by giving the MTA a credit card, but never enough money to pay it off,” the statement concluded.

(Ed.’s Note: School District Data: School district analysis is based on NYS Education Department [NYSED] data from 2006-07. On average school district expenditures have risen approximately five and one-half percent annually over the last several years, which would make the total estimate of salaries and benefits in these counties roughly $28.8 billion (the 2006-07 data totals $25.9 billion). The proposed payroll tax would generate an estimated $98 million in revenues from school districts before non-guaranteed reimbursements. Municipal Data: The source of municipal data is the New York State Comptroller’s office website – Financial Data for Municipal Governments for fiscal year 2007. In place of actual payroll data, which is not available, expenditures for personal service was used to calculate the tax liability of each county. Expenditures for each county total are calculated by totaling expenditures for each village, town and city within the county and adding county expenditures. Non-payroll fringe benefits were not included because taxability is unclear at this time. The above information was supplied by the Senate Finance Committee.)