Politics & Government

Local Business, School Districts Celebrate MTA Tax Repeal

The repeal, said school officials will go a long way, but more aid is needed to help to meet the new two-percent tax cap.

On Monday, Long Island school districts and many small businesses learned they will have a little more cash in their pockets — New York State reduced, and in some cases completely repealed, the controversial Metropolitan Transportation Authority payroll tax.

The repeal bill, according to officials, cuts the tax entirely for nearly 80 percent of small businesses, and for all private and public elementary and secondary schools.

A new sliding scale, under the repeal reduces the tax for all businesses with annual payrolls under $1.75 million, those businesses with an annual payroll of under $1.25 million, will not be subject to the tax.

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The repeal affects nearly 300,000 employers, who with payrolls ranging from $1.25 million to $1.5 million will see a tax reduction from $0.33 for every $100 of weekly payroll down to $0.11.  For those with payrolls between $1.5 million and $1.75 million, there will be a savings of  $0.23 for every $100 of weekly payroll.

Westhampton Beach business owner Elyse Richman said she was pleased with the repeal.

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"As a small business, and self-employed, I am happy to hear the news about the repeal," she said. "I never thought that this was necessary, of course it was paid, but it was never that much so I didn't really care, but in this economy better back in my pocket than theirs. But I am sure there will be something else down the road."

With the positive note, Richman noted, "So, for now its good news, as I get ready to pay my sales tax payment next week. Ouch, that one hurts."

Local school districts, including Hampton Bays and Westhampton Beach also celebrated.

In Hampton Bays, Superintendent of Schools Lars Clemensen said, "The exemption of public schools in the MTA tax contribution is definitely a win for public schools."  He continued, "Even though the state reimburses a district's payment two years later, it does ease the burden of writing the check and then having to manage the paperwork and oversight to ensure we get the money back.  It is an ease on our bureaucracy."

Mike Radday, superintendent of Westhampton Beach Schools, had similar sentiments. "We are certainly pleased that public school districts have been exempted from the MTA payroll tax," he said. "The tax placed an unfair burden on school districts, as we were essentially being asked to provide interest-free loans to subsidize the MTA."

However, Radday said, "While this is a step in the right direction, it will do little to ease the difficult fiscal challenges local school districts are facing.  Hopefully, the state will provide more substantive mandate relief in the immediate future as we grapple with the impact of the tax cap legislation."


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