Nonprofits, Public Institutions: MTA Payroll Tax Reduction not Enough

While Hauppauge's public institutions and nonprofits are glad to hear MTA Payroll Tax reductions are coming, they're still holding their breaths for a full repeal.

Gov. Andrew Cuomo signed legislation on Monday that will cut the Metropolitan Transportation Authority's payroll tax for 290,000 small businesses and 414,000 self-employed taxpayers. In addition, both private and public schools have been granted exemptions to the tax.

"The [Hauppauge Public School] district is pleased by the action of the Governor and the legislature because, although later reimbursed by the state, the district was forced to borrow funds to pay the tax. This led to increased costs for our community," said James Stucchio, assistant superintendent of business and operations for the district, in a statement.

Stucchio said the reductions will ultimately have little impact, as the mandates most heavily affecting schools include pension contributions and

Paule Pachter, executive director for in Hauppauge, said his nonprofit food bank saw the MTA tax eliminated since their payroll is under $1.25 million, a big boon to the organization.

Under the legislation, businesses whose payroll is between $1.25 million to $1.5 million will see the tax reduced from 0.34 percent to 0.11 percent. For those with a payroll between $1.5 million to $1.75 million, the MTA payroll tax will be reduced to 0.23 percent.

Pachter said LI Cares employs 37 people and has paid $4,300 annually for more than two years. To date, the nonprofit has paid about $11,000.

"Moving forward, this will allow us to reinvest the $4,300 into our mission," Pachter said.

Yet, LI Cares executive director said the reductions didn't go far enough. He said the reductions fall short of relieving the burden from other local nonprofit organizations.

"There are many nonprofits with payrolls above $2 million. They are just as needy in terms of putting their budget to work on their mission and serving people in need, as opposed to investing it in the MTA," Pachter said. "I hope ... the governor continues to expand the reduction for nonprofit charities that pay the MTA tax."

Janine Logan, spokeswoman for the nonprofit in Hauppauge, said Suffolk County's hospitals are among those who won't feel any relief.

"It's unfortunate that the hospitals were not included in that. We are the communities' largest employers," Logan said. "We are hoping next legislative session that will be brought up."

She said Nassau-Suffolk Hospital Council will continue to support and work with the Suburban Hospital Alliance, formed in 2006 with the Northern Metropolitan Hospital Association, as a voice of advocacy in Albany.

State Sen. Lee Zeldin, R,C - Shirley, was thrilled with the governor's decision, since he sponsored this legislation in 2011, but he also wants to see a full repeal.

"For the 80 percent of people who have had it eliminated, I am thrilled for them. It's a huge victory. Now we will continue to fight to see this payroll tax rolled back," Zeldin said.

Small businesses and self-employed taxpayers affected by the MTA tax will see relief in the first quarter of 2012, Zeldin said.