Payroll Tax No More, Officially

Gov. Andrew Cuomo is out on Long Island today where he is signing into law the official expiration of the MTA payroll tax, a tax cut that was part of the budget and jobs package passed last week.

The governor held the official bill signing in West Hempstead, in Nassau County, exactly the kind of suburban town that has been hit hardest by the tax, and where voter anger over it was at its most pitched, to the point where some Democrats have been arguing that it was the primary reason they lost the State Senate.

“Small businesses are New York’s growth engine and this tax reduction will help create jobs and get our state’s economy back on track without jeopardizing funding for the MTA,” Governor Cuomo said. “I thank the leadership as well as the members of the legislature for their dedication in seeing the MTA tax reduced and working to get our economy moving again.”

Since the budget deal was signed, Republicans have been crowing that because they raised taxes on the wealthy, they have taken one of the Democrats biggest arrows out of their electoral quiver; but the reverse could be said of the Democrats and the payroll tax.

According to the governor’s office, the tax will be eliminated for 289,000 small businesses, defined as those having an annual payroll between $10,000 and $1.25 million, in the MTA region. Additionally, more than 6,000 businesses with payrolls between $1.25 and $1.75 million will see their payroll tax cut by either one third or two-thirds. The MTA payroll tax cut will also benefit approximately 414,000 self-employed taxpayers. All elementary and secondary schools, public or private, are exempt from the payroll tax under the new law.

The cut though has worried transit advocates who fear that it will leave the cash-strapped MTA without the necessary funds, although in a scrum with reporters in Brooklyn last week, Gov. Cuomo reiterated his support for mass transit and said that all of the money lost will be replaced in the regular budget.

“Obviously the MTA is very important to the region’s economy,” he said. “I’m very excited about my appointee to the MTA, Joseph Lhota — all reports are he’s doing a great job and this will not cost the MTA one penny.”


Payroll Tax No More, Officially