Exempting suburban communities from an increase in the payroll mobility tax to bolster the finances of the Metropolitan Transportation Authority is disproportionately affecting workers of color, a report from the Fiscal Policy Institute released Monday found.
The report reviewed the effect of the payroll tax increase as part of the $229 billion budget agreement struck earlier this month, finding non-white New Yorkers will carry a heavier burden as a result.
"The decision to exempt suburban counties from the MTA payroll tax affects workers of color twofold: first, this exemption decreases the share of white workers impacted by the tax; and second, workers of color have to bear an even higher tax burden, because the state increased the tax rate to make up for lost suburban revenue," said Fiscal Policy Institute economist Emily Eisner. "Given the suburbs' deep economic ties to the regional economy and benefits from the MTA, there is no rationale for the state's decision to exclude suburban counties from the PMT."
Gov. Kathy Hochul has defended the tax increase as a relatively small hike in order to aid the MTA and mass transit in the New York City amid financial struggles made worse by a decline in commuter traffic in the aftermath of the pandemic.
The report found the payroll mobility tax increase will lead to workers of color covering 69% more as a result of the agreement excluding the suburban counties that remain in the MTA service region, including Long Island and the Hudson Valley.
Researchers determined the tax increase will lead to $704 million being paid by workers of color — nearly all of the $800 million the initial budget proposal from the governor planned to achieve with the hike.