Requires the MTA to renegotiate the joint service operating agreement with the state of Connecticut

Summary of provisions

Section one provides the legislative intent, recognizing that under Chapter 25 of the laws of 2009, Dutchess, Orange, Putnam and Rockland contribute an excessive amount to support the Metropolitan Transportation Authority (MTA) and provides a mechanism to relieve taxpayers of these four counties of the metropolitan commuter transportation tax, also known as the MTA payroll tax, to create a more equitable solution without compromising revenues collected for the support of the MTA.

Section two amends Section 1266 of the Public Authorities law requiring the MTA to:

(1) renegotiate the joint service agreement between the authority and the state of Connecticut to require equitable Connecticut fare levels and require that the Connecticut operating deficit subsidy payments be based on Connecticut resident utilization of the MTA; or, (2) reduce services and expenses related to the Metro-North New Haven line operation by a recurring MTA savings amount which is equivalent to the increased joint service agreement payments which would otherwise be determined under renegotiation; or, (3) terminate the Amended and Restated Service Agreement dated June 21, 1984, and any amendments or modifications thereto, including but not limited to any and all arbitration opinions and awards, notwithstanding any provision of this section or any other law to the contrary.

Section three amends Section 800 of the Tax law excluding Dutchess, Orange, Putnam and Rockland from contributing to the MTA payroll tax established in Chapter 25 of the laws of 2009 and requiring that tax revenues previously collected under this section from within the Counties of Dutchess, Orange, Putnam and Rockland be reimbursed to each payor by March 31, 2013.

Section four sets an immediate effective date.

Justification

Chapter 25 of the Laws of 2009 imposed a payroll tax on virtually all employers in the Metropolitan Transportation Authority 12 county

region. Transit riders in the Counties of Dutchess, Orange, Putnam and Rockland, however, comprise only one percent of the combined population of these counties. While these four counties are only allowed a one-quarter vote on the MTA Board due to their low system utilization, this same level of minimal utilization was not recognized when Chapter 25 was enacted imposing the same 34 cents per $100 of payroll on employers throughout the MTA region.

As a result of Chapter 25 of the laws of 2009, the counties of Dutchess, Orange, Putnam and Rockland have been forced to contribute more than $90 million in added revenues to the MTA. The full amount contributed from the four counties is in excess of $365 million or $32,000 per transit rider.

In an effort to eliminate the payroll tax in the counties of Dutchess, Orange, Putnam and Rockland and maintain revenue neutrally, approximately $7 million would be additionally required resulting in an estimated 13% fare increase among transit riders in the four counties.

Given the unfair and excessive burden placed on taxpayers in Dutchess, Orange, Putnam and Rockland counties, this legislation would also require that tax revenues previously collected from each payor be reimbursed by March 31, 2013.

This bill is revenue neutral and does not negatively impact the level of funds flowing to the MTA. Commuters in New York State outside of Dutchess, Orange, Putnam and Rockland counties are not affected by this legislation.

This legislation recognizes that 26% of the Metro-North transit riders are Connecticut residents, who were not required to contribute to the Metropolitan Transportation Authority operating deficit bail-out. Currently, Connecticut's ridership is estimated at 26,000, providing a subsidy of $4000 per transit rider. This legislation requires the MTA to renegotiate the joint service operating agreement between the Authority and Connecticut to reflect increased fare and subsidy equity payments based on utilization. If an agreement does not produce an equitable fare increase and subsidy payments from Connecticut, the MTA is defected to reduce services to the New Haven line operation by an amount that produces recurring savings equivalent to that which would have otherwise been collected through an equitable agreement.

Legislative history

2010: S.6267 - Referred to Transportation 2009: S.6267 - Referred to Rules

Fiscal implications

None to the State or the Metropolitan Transportation Authority. Dutchess, Orange, Putnam and Rockland counties will benefit from the elimination of the MTA payroll tax.

Effective date

Immediately.