State lawmakers are proposing a trio of potential new taxes — including a fee for online package delivery and a surcharge to Uber and Lyft rides — to help fund the Metropolitan Transportation Authority.
Assembly members suggested a trio of new levies that would help pay for the MTA’s proposed $65.4 billion capital plan to maintain and modernize the system between now and 2029. The proposals are sparse on specifics, but float raising the current 0.60% payroll mobility tax on employers within the five boroughs, Long Island and the Hudson Valley, and potential new fees on New Yorkers for ordering package deliveries and for using ride apps.
Some business leaders panned a proposed payroll tax increase as a burden on the region’s employers, and encouraged lawmakers to explore other ideas.
“The MTA payroll tax was increased just two years ago and congestion pricing began in January — it is baffling that Albany is already talking about another tax hike,” said Ashley Ranslow, the New York director of the National Federation of Independent Business. Raising the tax, Ranslow argued, would lead to “more vacant storefronts and a higher cost of living for all New Yorkers.”
Ken Pokalsky, vice president of The Business Council of New York State, said he recognized the “importance of effective mass transit in New York City but we need to look at all options — not just increased taxes — in addressing the MTA’s long term financial challenge.”
Raising the tax and creating new fees would invest in the region’s subway, bus and commuter rail, including with new railcars to replace dilapidated 1980s models, pay for elevators at dozens more stations and would expand service by financing the Interborough Express, a light rail project that would link Brooklyn and Queens along mostly existing freight tracks.
State Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie rejected an MTA proposal in late December for $65.4 billion to invest in mass transit — roughly $33 billion of which did not have identified funding sources. The move set the stage for a contentious legislative session that puts the leaders at odds with Gov. Kathy Hochul, who supports fully funding the MTA’s latest plan to finance mass transit upgrades.
A proposed increase to the payroll mobility tax comes two years after the state budget increased the levy on business (exclusively within New York City) by less than 1%. The fee applies to businesses that are required to withhold state income tax for wages and whose payroll expenses exceed $312,500 in a calendar quarter.
Only 4.6% of the region’s businesses — about 20,600 in the top payroll tier — would feel the impact of raising the tax, according to analysis from Regional Plan Association, a policy nonprofit. About 60% of the businesses that pay the tax are within the city, RPA research found.
Carlo Scissura, president and CEO of the New York Building Congress, in a statement called lawmakers’ lack of specific proposals to finance MTA projects “deeply disappointing.”
“Without the necessary investment,” he said, “tens of thousands of jobs, billions in economic output, and essential infrastructure improvements across New York are in jeopardy.”
