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Statement by NYS Tax Relief Now For Senator Carl Marcellino
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Hearing on MTA Finances May 5, 2011
NYS Tax Relief Now is a 501(c) 3 not for profit organization whose mission is to identify,
educate and legally challenge, if necessary, any improper or unnecessary tax imposed
upon New York State taxpayers. Currently, Tax Relief Now is educating the public
regarding the onerous MTA Payroll Tax and challenging it as irrefutably unconstitutional,
detrimental and completely unnecessary.
This bill, which was passed in 2009, is in violation of the New York Constitution:
Article IX, Section 2-b-2-a “Home Rule Message” required for passage of special
law affecting property affairs, or government of local government.
Article IX, Section 2, two-thirds vote required for passage of special law affecting
property, affairs, or government of local government (including court imposed test:
is this properly a matter of state concern). Two-thirds vote required for bill
appropriating money for local or private purposes.
Article III, Section 20, Part G-1, Section 1.
Article VII, Section 6, no appropriations may be made except by separate bills for a
single object or purpose.
Article X, Section 5, prohibition on state‟s acceptance of liability for indebtedness
issued by public corporation.
Essentially, a two thirds majority was required in both the Senate and the Assembly
in order to impose this tax. That was not achieved. In addition, the MTA Payroll Tax
is in violation of the NY Public Authorities Law §1266, which states that the MTA must
be self- sustaining. As the law did not meet these criteria, it is unconstitutional.
Also, and as important, the MTA is a failed business model, which no bailout could
ever save. For 45 years, the threat of the „sky is falling‟ has resulted in enormous
fare increases, drastic service reductions and fiscal irresponsibility. More specifically,
the MTA claimed that the projected $800 million shortfall in 2009, justified these
service cuts and fare increases, while at the same time they were reporting
$3.7 billion in investments “not needed for operations”. Consistently investing in
non-transportation assets has allowed the MTA to accumulate $59.7 billion in total
assets. For these reasons, the Payroll Tax, which is regarded by many as one of the
worst job-killers in NYS history, was not needed in the first place.
In order to resolve these critical issues, NYS Tax Relief Now is proposing the following
course of action:
1. We are calling on the MTA to immediately begin liquidating all non-transportation related assets.
2. Next, we are calling on the NYS Senate to oversee the selling off of said assets and to appoint a non-partisan commission, comprised of at least half business people, to explore public-private partnership options. Restructuring the authority, as a whole entity, is essential in any viable plan and that can surely be accomplished through partial privatization and free market solutions.
3. Lastly, and most importantly, we are calling for a complete and unconditional repeal of the MTA Payroll Tax. We are certain that these actions will not only assist in relieving the incredible tax
burden imposed upon New York taxpayers, but will also keep much needed cash and jobs in the
affected area‟s economies, where it rightfully belongs. One astute taxpayer succinctly stated
that “the problem should be Fixed, not Funded”.
We look forward to working with any and every elected official who is willing to prioritize this issue and is in agreement with our recommendations designed to help bring New York back to the innovative powerhouse that it
once was.
Respectfully Submitted,
Karen Pope, Executive Director
NYS Tax Relief Now
P 631-921-2715
E kpope@nystaxreliefnow.org
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