Could Court Ruling Cause Extreme Service Cuts to NYC Transit?

This week, a New York Supreme Court Justice declared unconstitutional a tax covering a 12-county area including the city of New York and its surrounding suburbs, creating a $1.26 billion hole in this year's MTA budget.
August 24, 2012, 8am PDT | Jonathan Nettler | @nettsj
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In ruling in favor of a lawsuit brought by Nassau County Executive Edward Mangano and other suburban communities against the Payroll Mobility Tax, which was adopted by the State Legislature in 2009 to rescue the indebted Metropolitan Transportation Authority (MTA), "Judge R. Bruce Cozzens Jr. held the levy violated a so- called home-rule provision in the state constitution," reports Esmé E. Deprez.

In a statement, the MTA claimed that, "Removing more than $1.2 billion in revenue from the Payroll Mobility Tax, plus hundreds of millions of dollars more from other taxes affected by yesterday's ruling, would be catastrophic for the MTA and for the economy of New York state." It continues, "Without the Payroll Mobility Tax or another stable and reliable source of funding, the MTA would be forced to implement a combination of extreme service cuts and fare hikes."

According to Deprez, "Mangano, a Republican who led the plaintiffs in the suit filed in 2010, celebrated today alongside state and county legislators at a news briefing in Mineola. He called the decision as a 'victory for taxpayers and job creators throughout the state.'"

 

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Published on Thursday, August 23, 2012 in Bloomberg BusinessWeek
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