Hochul MTA Payroll Tax Hike Ignores History and Endangers Democrats

When I started working as a community organizer in Suffolk County in 2011, there were two truisms shared with me by virtually every politically minded Long Islander I met. First, to avoid being seen as a stranger, say “in,” not “in” Long Island. Second, the Democrats’ passage of an MTA payroll tax in 2009 had cost them two seats in the Long Island State Senate and their majority.

Fast forward 12 years, and Governor Hochul is trying to boost the MTA by raising the payroll tax. Ignoring much wiser calls to raise taxes on the ultra-rich, measures supported by most New Yorkers, including on Long Island, he is ignoring recent political history and handing Republicans a club with which to attack their own party. She should reconsider.

Flash back to 2009, when Democrats won a majority in the state Senate for the first time in decades, including two seats on Long Island. The MTA faced a large budget gap, and leaders offered competitive proposals to fill it. In the end, they passed a modest payroll tax to ensure employers in the metro region shared the burden of funding the MTA.

Whatever you think of the tax, it quickly became a political lightning rod in the suburbs. In the election that followed, the Republicans criticized their opponents for it. Lee Zeldin, then an upstart running for the state Senate, referred to his current opponent in press releases as “Brian ‘MTA Tax’ Foley,” making this his main campaign theme. Thanks to victories by Zeldin and Jack Martins on Long Island in 2010, Republicans regained their majority in the Senate and held it for nearly another decade.

The issue served as the perfect tool for Republican scaremongering about the prospect of Democratic government. His central argument has always been that if he allows the Democrats (mostly from New York City) to take over, they will threaten the “suburban way of life.” Nothing exemplifies this better than a tax on employers to fund public transportation, which, since the Robert Moses era, was seen by many on the island as a threatening tool for New York City to encroach on their idyllic communities.

Fast forward to 2023, a few months after Zeldin nearly defeated Hochul, who ran a lackluster campaign, failed to energize Democrats, and was defeated on Long Island.

The MTA again faces a huge budget gap. Full funding of the MTA is vitally important to New Yorkers throughout the metropolitan area, including commuters. It should be a top budget priority, with all options on the table. But raising the payroll tax is a political gift to Republicans, who will present it as an assault on the suburbs, and whose billionaire backers like Ronald Lauder are keen to spend big on divisive campaigns. Well-funded Republican attacks are even more likely given that suburban congressional seats are crucial to any Democratic hope of retaking the House of Representatives.

The policy itself is also likely to have a regressive impact as long as employers pass it on to workers, especially when compared to alternatives.

There’s a better way to fund the MTA: tax the ultra-rich across our state, whose net worth has multiplied by $228 billion (yes, billions) in the first two years of the pandemic. The Invest in Our New York (IONY) coalition has introduced a five-bill legislative package that includes a billionaires tax, a capital gains tax on incomes over $500,000 per year, and an estate tax on ultrarich. This approach to generating income is hugely popular, even on Long Island. A recent statewide survey found approximately 80% support for raising taxes on the wealthiest New Yorkers. Similar polls in recent years have found levels of support at least as high, even among suburban voters and republicans.

Additionally, the IONY package would generate enough, roughly $40 billion, to fund other crucial budget priorities, including public education, health coverage expansion, affordable housing, and climate action. Smart politics, learn about smart politics.

Unfortunately, Hochul, who has raised tens of millions of campaign dollars from the super-rich, continues to oppose raising taxes on them. By pushing through a potentially explosive payroll tax hike, he is putting at risk the vast legislative majorities of his own party, and the chances of retaking the House.

If Hochul does not heed the lessons of recent history and reverses course, the Senate and Assembly should reject the payroll tax increase, include the IONY package in their own budget plans, and stick together in the negotiations. With their own elections next year, lawmakers have the most to lose from the political lunacy of Hochul’s payroll tax proposal.

Altschuler is co-executive director of Make the Road Action, an immigrant advocacy organization.