Hochul’s MTA payroll tax hike ignores history and imperils Dems

When I began 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 an outsider, say “on,” not “in” Long Island. Second, the Democrats’ passage of an MTA payroll tax in 2009 had cost them two Long Island state Senate seats and their majority.

Fast forward 12 years, and Gov. Hochul is trying to boost the MTA by increasing the payroll tax. Ignoring much wiser calls to raise taxes on the ultra-wealthy — measures supported by most New Yorkers, including on Long Island — she is ignoring recent political history and handing Republicans a cudgel with which to attack her own party. She should reconsider.

Let’s rewind to 2009, when Democrats held the state Senate majority for the first time in decades, including two seats on Long Island. The MTA faced a large budget gap, and leaders offered competing proposals to fill it. In the end, they passed a modest payroll tax to ensure that metro-region employers 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 elections that followed, Republicans lambasted their opponents for it. Lee Zeldin, then an upstart vying for state Senate, referred to his incumbent opponent in press releases as “Brian ‘MTA Tax’ Foley,” making this his top campaign issue. On the backs of Zeldin and Jack Martins’ victories on Long Island in 2010, Republicans regained the Senate majority and held it for nearly another decade.

The issue served as the perfect tool for Republican fear-mongering about the prospect of Democratic rule. Their core argument has always been that, if you allow Democrats (heavily from New York City) to take charge, they will threaten the “suburban way of life.” Nothing exemplified this better than a tax on employers to fund mass transit, which, since the Robert Moses era, was seen by many on the Island as a threatening tool for New York City to encroach upon 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 got trounced on Long Island.

The MTA again faces a yawning budget gap. Fully funding the MTA is crucially important for New Yorkers throughout the metro area, including suburban riders. 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 cast it as an assault on the suburbs — and whose billionaire backers like Ronald Lauder have an appetite for spending big on divisive campaigning. Well-funded Republican attacks are even more likely given that suburban congressional seats are crucial for any Democratic hope of retaking the House of Representatives.

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

There is a better way to fund the MTA: tax the ultra-wealthy across our state, whose net worth mushroomed by $228 billion (yes, billion) in the first two years of the pandemic. The Invest in Our New York (IONY) coalition has advanced a five-bill legislative package that includes a billionaires’ tax, a capital gains tax on income above $500,000 per year, and an heirs’ tax on the ultra-rich. This approach to generating revenue is enormously popular, including on Long Island. A recent statewide poll found roughly 80% support for raising taxes on the wealthiest New Yorkers. Similar polls in recent years have found at least as high levels of support, including among suburban voters and Republicans.

Moreover, the IONY package would generate enough — an estimated $40 billion — to fund other crucial budget priorities, including public education, health coverage expansion, affordable housing and climate action. Smart policy, meet smart politics.

Unfortunately, Hochul, who raised tens of millions of campaign dollars from the super-rich, has remained opposed to raising taxes on them. By pushing a potentially explosive payroll tax increase instead, she is putting her own party’s legislative supermajorities — and chances of retaking the House — at risk.

If Hochul won’t heed the lessons of recent history and reverse course, the Senate and Assembly should reject the payroll tax increase, include the IONY package in their own budget plans, and stick together in negotiations. With their own elections coming next year, legislators have the most to lose from the political folly of Hochul’s payroll tax proposal.

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