Sources say Gov. Cathy Hochul is considering a formidable business tax hike to shore up the Metropolitan Transportation Authority, which is struggling to fill a massive $33 billion budget hole, but the governor has not yet decided to do so. The plan is kept secret.
Hochul's budget director acknowledges that fees and taxes are needed to pay for the MTA's massive capital expenditures, as the governor introduced a new, harassing but cash-generating $9 congestion charge on Sunday. Nevertheless, it remains the reality.
Democrats are again considering raising the payroll transfer tax, which they proposed last summer to increase funding when they delayed congestion pricing and immediately reinstated it after the 2024 election.
New Yorkers may soon find themselves squeezed by both tolls and the same tax increases that were floated as an alternative to tolls just a few months ago, insiders and commentators say.
“The MTA is operating like a mob,” said City Councilman Joe Borelli (R-Staten Island). “The mastermind of the jam, Jano Lieber, is ready to extort the people the moment they start paying off their first debts. It's a never-ending cycle.”
The MTA desperately needs an infusion of funding to advance the $68 billion capital plan backed by Mr. Hochul, and how to do that will be top of mind as state lawmakers return to Albany this week. According to sources, there is a possibility that a new list of members will be added. Fees and taxes may be determined through private negotiations.
Hochul's office has also declined to say whether he will announce any proposals to fill the massive MTA funding gap, but officials say the mobility tax has just been increased in 2022. , the governor is likely to impose an even larger payroll tax on businesses. Experts say the new fees could apply beyond the five boroughs.
“The only thing that is certain is that this is not a repeat of what happened two years ago, when the payroll mobility tax was increased only to New York City-based businesses,” said CEO of Partnership for New York. said Kathy Wilde, CEO. City is a group representing New York City's largest corporations. “Any additional taxes need to be applied regionally and broadly.”
The Payroll Mobility Tax taxes businesses in the New York City metropolitan area based on their overall payroll size. It is divided into three tiers, with large companies paying higher rates than small businesses.
Follow The Post's coverage of Manhattan's new congestion pricing.
“Currently, businesses pay most of the 44% of MTA revenue that comes from taxes,” Wilde, a professional ally of Hochul’s congestion pricing, told the Post on Tuesday. “Reducing MTA costs will need to be part of the package, no matter what is enacted. Everyone will need to contribute.”
A payroll mobility tax will likely face opposition from the state Legislature, which Hochul flatly rejected when he tried to introduce it during last June's congestion charge moratorium.
In the early stages of the new congestion pricing plan, critics were furious over its uncertainty.
“Kathy Hochul isn't solving the problem of inflation. She's making it worse by collecting endless hidden fees and taxes from working-class New Yorkers.” said Congressman Ritchie Torres (D-New York), who is seeking to
The payroll mobility tax applies to businesses located in New York City, Long Island, and some of the Hudson Valley suburbs.
Currently, New York City businesses with payroll over $437,500 must pay a 0.6% tax on that amount. Companies outside the five boroughs pay slightly lower wages.
Albany raised taxes in 2022 to make up for the MTA's operating funding shortfall at the time, but Hochul touted that she “saved the MTA.”
It's unclear how much taxpayer money will essentially be passed on to employees, but financial experts say it adds to an already dire situation for businesses in the state.
“The more we tax companies, the more we risk not being able to do the business they want to do,” Anna Champenney, vice president of research at the Citizens' Budget Committee, told the Post.
Champeny said Hochul and lawmakers need to consider further cost-cutting measures and other revenue sources.
“Simply raising taxes on New York businesses like New York businesses did a few years ago when we did the stabilization plan is not the right approach,” she said.
Business groups are also firmly opposed to raising the mobility tax.
“Governor Hochul gave free reign to the MTA in order to force New York City taxpayers to subsidize his every irresponsible whim, because to them New Yorkers have no right to a dysfunctional government agency. It is just a piggy bank that provides a cushion every time you fall into financial ruin,” said city councilor Inna Vernikov. he told the Post.
City Councilwoman Joanna Arriola (R-Queens) accused the governor of “digging deep into the pockets of hard-working New Yorkers.”
“The joke is that she’s spouting a mantra about affordability even as she’s making our state and city less and less livable,” Arriola said. “I would like to collect the toll and see Hochul benefit.”
Mr. Hochul is also interested in the idea of not announcing any public plan to raise $33 billion, the person said, his office announced on January 21. He did not say whether any of the proposals would be included in the budget proposal that is scheduled to be submitted.
On Monday, she handed the responsibility to Congress, saying the ball is “in their court.” This has sparked speculation in Albany that a new revenue menu will be created in private negotiations.
“I think that would be the worst outcome,” Champaigny said.
“Clear proposals should be made, published and debated,” she added.
All of this is happening against the backdrop of Hochul desperately seeking support by rolling out an “affordability” proposal ahead of next week's State of the Union address.
In Tuesday's announcement, Hochul requested millions of dollars in grants to equip and build new child care centers before fleeing without taking questions from reporters.
