Relates to the definition of the metropolitan commuter transportation district for the purposes of the metropolitan commuter transportation mobility tax

Summary of provisions

Section 1. Legislative finds. The town of Brookhaven, East Hampton, Riverhead, Shelter Island, Southold and Southampton in the County of Suffolk already pay substantial taxes and mortgage recording taxes to the MTA for the minimal mass transit services they receive. As such, the aforementioned towns should be exempt from the newly Metropolitan commuter Transportation mobility tax.

Section 2. Amends subdivision(A) of section 800 of the tax law, as added by Section 1 of part C of Chapter 25 of the Laws of 2009 to exclude the town of Brookhaven, East Hampton, Riverhead, Shelter Island, Southampton and Southold in Suffolk County from the Metropolitan Commuter Transportation District.

Section 3. Amends Section 1266 of the public authorities law by adding a new subdivision 19 requiring the renegotiation of the joint service agreement between the MTA and the state of Connecticut relating to the operation of the Metro-North New Haven line and reducing its services and expenses by March 31, 2015.

Section 4. Provides for an immediate effective date of this act.

Justification

Chapter 25 of the Laws of 2009 implements various supplemental fees and taxes for the 12 county Metropolitan Commuter Transportation District (MCTD) in an effort to financially bailout the MTA. Provisions of this package include a 0.34% payroll tax for all employers in MCTD, which includes the town of Brookhaven and the towns which comprise the Peconic Bay Region located on the east end of Long Island (East Hampton, Riverhead, Shelter Island, Southampton and Southold). The Peconic Bay Region alone has a population of approximately 140,000 and represents 1.1% of the MCTD.

This measure will surely have a devastating effect on every local employer located within the Peconic Bay Region and the town of Brookhaven. This new expense will ultimately have to be passed along by those employers through higher prices and increased property taxes. Residents of these areas already heavily subsidize the MTA through increased fares, additional sales tax and a mortgage recording tax. In return for these onerous taxes and fees, they receive minimal services from the MTA. In fact, the Volpe Study on improved rail/bus service estimates that the east end pays $40 to $60 million more for services

than what is received from the MTA on an annual basis. Despite the fact that this area does not have the same level of New York City commuters, they pay the same as those who benefit from ample services.

This legislation further provides for the renegotiation of the joint service agreement between the MTA and the State of Connecticut related to the operation of the Metro North New Haven line. The monies saved by reducing services and expenses related to the Metro North new Haven lien by an amount which produces recurring savings to the MTA would help to offset the cost of exempting the towns of Brookhaven, East Hampton, Riverhead, Shelter Island, Southold and Southampton from this tax.

It is necessary to avoid any further inequitable taxation on those town undeserved by the MTA which comprise the Peconic Bay Region and the town of Brookhaven. Therefore, enactment of this legislation is necessary to exempt these areas from the MTA's employer payroll tax.

Legislative history

2011-12 S.2871; 2010 S.6311/A.8635B

Fiscal implications

To be determined.

Effective date

Immediately.