Exempting Suburbs from Payroll Mobility Tax Would Cost MTA $200 Million

LIRR and Metro-North costs currently make up 25% of MTA operating expenses.

Long Island and the Hudson Valley commuters & the local jobs they support collectively account for 57% of employment in suburban counties.

April 2023

Press Contact: Monica Klein

ALBANY, NY | April 26, 2023 — As the legislature currently contemplates a Payroll Mobility Tax (PMT) increase from 0.34 percent to 0.5 percent to fund the MTA, the Fiscal Policy Institute today released a new report, Who Should Pay the Payroll Mobility Tax? The Case Against Excluding Suburban Counties.

“While some legislators have proposed an exemption for the suburban counties in the MTA region, these suburban economies largely depend upon the economy of New York City — which itself depends upon the functioning of the MTA. Moreover, exempting suburban counties from the small increase would unfairly shift operating costs of the Long Island Rail Road and the Metro-North Railroad onto New York City,” said Fiscal Policy Institute Senior Policy Analyst Andrew Perry. “Given their deep economic ties to the regional economy and benefit from the MTA, suburban counties should be fully included in the tax — both to cover the costs of the commuter transit lines, as well as to maintain service and investment across the system.”

Key report findings:

  • Long Island Rail Road (LIRR) and Metro-North Railroad expenses currently account for approximately 25 percent of MTA operating costs.
  • The suburban counties in the MTA region currently pay the PMT, contributing about 25 percent of PMT revenues – equal to their regional transit systems’ share of MTA operating costs.
  • Residents of Long Island and the Hudson Valley who commute to New York City for work, and the local jobs they support, collectively account for over half (57 percent) of employment in the suburban counties.
  • Under the Governor’s proposed 0.16 percent PMT increase, the State would raise $800 million. Exempting the suburban counties in the MTA region from the .16 percent increase would decrease the revenue yield of a higher PMT rate by approximately $200 million, or 25 percent.