4 hours ago
1
The MTA’s money train will drive companies straight outta town.
Big Apple businesses are fuming over Gov. Kathy Hochul’s plot to hike their payroll taxes to pay for the Metropolitan Transportation Authority’s record-breaking $68 billion capital plan.
Business owners and industry reps warned the looming tax increase — coming in the state budget deal reached by Hochul and Albany Democrats Monday — will cause bigger companies to leave the state and make cuts that’ll hit workers in the pocketbooks.
“The exit from New York state will be greater. It will lead to fewer investments from business people in New York,” predicted billionaire business mogul John Catsimatidis, who owns the Gristedes and D’Agostino’s grocery chains.
“Things will be run tighter, possibly with fewer raises,” the staunch Republican said. “Will there be fewer hires? Absolutely!”
The handshake budget deal announced by Hochul calls for companies in New York City with payrolls of $10 million a year or more to shell out nearly 1% more in taxes, while those in Long Island, Westchester and upstate will see a 0.6% spike.
Catsimatidis added he doubted the plan would feed the cash-hungry MTA’s “bottomless pit.”
The payroll mobility tax hike was hatched as lawmakers grappled with the MTA sending the mammoth five-year capital plan that didn’t account for $35 billion in revenue to carry out its sweeping transit improvements, including modernizing its decrepit trains, stations and infrastructure.
Hochul pitched raising the tax, despite it being particularly hated by many lawmakers and businesses outside New York City.
They contend the MTA provides too little service to their areas to justify hitting them with another tax.
“Ridiculous. Stupid jackasses,” said former Sen. Al D’Amato, who’s now a lobbyist representing large firms in real estate and financial services.
“They’re going to force firms to leave New York. The MTA has been mismanaged for years under Republicans and Democrats. They’re throwing money down the drain.”
Rep. Mike Lawler (R-NY), whose district includes lower Hudson Valley and who is believed to be mounting a possible GOP challenge for governor next year, railed against proposal to raise the payroll tax to “bail out Kathy Hochul’s corrupt MTA.”
“The MTA is the worst-run public authority in the nation and can’t even keep commuters safe, with felony assaults rising 9% this year,” he said.
Nassau County Executive Bruce Blakeman, another rumored Republican gubenatorial hopeful, added: “The MTA tax hurts economic development in the region and increasing it will put a terrible burden on the businesses that provide jobs and economic security. This increase makes no sense.”
The quarter-trillion dollar handshake deal ultimately reached by Hochul and the Dems restructures the payroll mobility taxes on businesses in New York City and the MTA service region, including Long Island and Dutchess, Orange, Putnam, Rockland and Westchester counties.
Businesses in these counties with $10-million-and-up payrolls will have to pay more — 0.895% for NYC businesses and 0.635% for those outside the city — under the scheme.
Meanwhile, smaller businesses with payrolls under $1.75 million will have their payroll tax rate cut in half.
The hike will cover most, but not all, of the the MTA’s funding hole for the plan.
Altogether, the MTA will have $65 billion — still leaving the plan $3 billion short of officials’ original ask.
“The MTA itself will find savings for the final $3 billion of this plan,” Hochul said.
MTA officials didn’t return requests for comment as where these savings will be found.
Senate Majority Leader Andrea Stewart-Cousins (D-Westchester) said she expects the transit agency will slim down its capital plan.
“Everyone has to give in order to get the premier kind of system that we want,” Stewart-Cousins said.
Heather Mulligan, president and CEO of The Business Council of New York State Inc., argued that businesses cannot continue to shoulder tax increases when there are state budget problems.
She then floated another group that should pay more: straphangers.
“The MTA and the state need to consider a fairer approach to funding, one that raises revenues more broadly, including from those who regularly utilize the system,” she said.
Not all business leaders and reps were against the tax.
The Partnership for the City of New York is not opposing the payroll mobility tax increase because it doesn’t just hammer large firms in the city, said its powerful CEO Kathryn Wylde.
“This budget agreement reduces the payroll tax on smaller companies by 50% and requires that the state, city and MTA all contribute,” she said. “There is also additional funding that the state is redirecting to deal with fare evasion and subway safety. So, among the options for funding the repair and upgrading of the transit system, this budget is probably the best we could have hoped for.”
Long Island Association president and CEO Matt Cohen was cautiously hopeful.
“Small businesses have absorbed one gut punch after another and will welcome this tax relief,” he said, “but we’ll have to wait and see how this mixed bag will impact larger companies now facing increased costs.”
— Additional reporting by Lisa Fickenscher
English (US)