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MTA payroll tax due date bad timing for Democrats

October 7, 2009
By RICK BRAND rick.brand@newsday.com

After top Albany Democrats saddled their suburban senators with the new MTA payroll tax, they inadvertently spread the pain to Long Island Democrats in tight races by inadvertently making the first tax bill due Nov. 2 - Election Day eve.

"It couldn't have been the fourth?" asked Jay Jacobs, state and Nassau Democratic chairman, who had been unaware of the billing date.

"It's never a good idea to remind people about taxes the day before an election," said Jacobs, who is battling to keep Democrats' one-seat edge in the Nassau Legislature in the face of stiff challenges to incumbents including Joseph Scannell.

Local Republicans vowed to take full advantage. "We can absolutely use it and we will," said Nassau GOP chairman Joseph Mondello, who also had been unaware of the tax deadline. "It's just another example of the ineptitude of the Democratic administration . . . and a reason voters need to put Republicans back in power."

The state Department of Taxation and Finance has sent 700,000 notices since June, but many of the 287,000 self-employed businesspeople have gotten them only in recent days. A state tax spokesman said the law originally made payment due Oct. 31, but that falls on Saturday, so the deadline became Monday, Nov. 2.

The tax, retroactive to Jan. 1, requires employers in 12 downstate counties - including businesses, government, nonprofit groups and the self-employed - to pay 34 cents on every $100 of payroll. Critics have lambasted the $1.5-billion tax, a bailout for the troubled Metropolitan Transportation Authority, as the work of New York City lawmakers that soaks Long Island and other suburbs.

"Small businessmen are up in arms because it's a lump sum, retroactive to January and couldn't come at a worse time in the middle of a recession," said Matthew Crosson, Long Island Association president. And many Suffolk employers "are upset they are paying the same tax as the city and get almost no benefit from the MTA."

Aides to Democratic Gov. David A. Paterson and the Senate and Assembly Democratic majority said the due date was meant to match the deadline for payment of withholding taxes, and to give tax officials time to get the new levy up and running.

Matt Anderson, a spokesman for the governor's budget office, said that while "there might be some who want to play politics rather than address serious issues, the reality is that Gov. Paterson rolled up his sleeves, worked with the legislature and made the tough decisions necessary to mitigate severe fare hikes and service reductions for LIRR riders."

But Desmond Ryan, a veteran lobbyist, said city-based Democratic leaders failed to see a political impact because city Republicans rarely wage competitive races. "Election Day is irrelevant to them," he said. "Whoever wins the [September] primary wins the election."