Under Gov. Paterson's plan to rescue the MTA from a $400 million budget shortfall, New York City businesses would see a payroll tax increase by 59 percent, surging from .34 percent for every $100 of payroll to .54 percent. Meanwhile, the payroll tax in suburban areas would be cut in half.
After politicians and residents from Suffolk, Nassau, Putnam, Westchester, Orange, Dutchess and Rockland counties complained about the tax, which was implemented last year in an MTA bailout, Paterson proposed cutting the tax in suburbs to .17 percent. Paterson says the new tax is fairer, but Mayor Bloomberg told the Post it's "wrongheaded," and added in a statement: "The idea that the state can spare the suburbs while sacking the City is terrible economics, grossly unfair and contrary to every principle of good regional development."
The Daily News notes that the change would plug between $230 and $240 million of the MTA's $400 million budget gap, though it would do nothing to prevent widespread service cuts that were already approved. An MTA spokesman said it would "lessen the need for additional cuts," but "[i]t would not eliminate the need for the service cuts and administrative reductions included in the MTA budget passed in December."