North Shore Sun

The Metropolitan Transit Authority's payroll tax could cost jobs in his town, according to Brookhaven Town Supervisor Mark Lesko.

He estimated the tax, which cost the town about $240,000 in 2009, could pay the salaries of four town workers annually. At the same time, he said, there's very little fat to cut from what he called an already bare bones budget.

"They want us to lay off town workers to pay this tax," he said to the three dozen people gathered in Riverhead Friday to protest what they consider the Metropolitan Transit Authority's unfair treatment of the East End. "That's ridiculous."

Supervisor Lesko was one of a dozen people who spoke at the press event at Digger O'Dell's on West Main Street. The speakers, mainly lawmakers and business representatives, expressed outrage that eastern Long Island governments, schools and businesses are being asked to pay an MTA payroll tax while the transit authority is proposing to virtually eliminate LIRR service east of Ronkonkoma.

State officials say they will fight to see the tax repealed.

"We want to mobilize all of the factions that are affected by this so we can continue to speak with one voice," said state Senator Kenneth LaValle (R-Port Jefferson), who organized the event.

Last month, the MTA proposed the service cuts to help it close a $400 million budget shortfall. The plan was unveiled just months after the state approved a tax that forces all employers in New York City and surrounding counties, including Suffolk, to pay the state an MTA tax of 34 cents for every $100 they spend on payroll.

"It's sadly ironic that this authority that has been so mismanaged, so bloated, right now is asking the private sector, the businesses who have to struggle every single day ... to bail them out," said newly elected state Assemblyman Dean Murray (R-East Patchogue).

Governor David Paterson earlier this month proposed a 2010-11 budget amendment that would reduce the tax for employers outside the city to .17 percent, while increasing it to .54 percent for New York City businesses.

Those at the press event Friday morning said Mr. Paterson's proposal does not go far enough.

"This is a fight about what is wrong in government," said Assemblyman Marc Alessi (D-Shoreham.)

There was more support for the idea of creating a Peconic Bay Regional Transit Authority, which several local officials have argued could be run cheaper and more efficiently than the MTA.

"We will provide the public transportation that the East End deserves," vowed county Legislator Ed Romaine (R-Center Moriches), whose district covers the North Fork and Shelter Island. "It is time to leave the MTA well behind."

On Monday, MTA spokesman Aaron Donovan defended the transit authority, saying it is examining its cost structure and trying to show that it uses the money it receives in taxes, fares and tolls wisely.

"We expect to have more to say very soon about ways we are reducing administrative expenses," Mr. Donovan said in an e-mail. "But unfortunately, administrative expense reductions alone will not solve a budget gap of this magnitude, which is why we must reduce service to all parts of the region the MTA serves."

East End officials are scheduled to meet with LIRR president Helena Williams on Friday to discuss rail service to the East End. A public hearing on the proposed service cuts will also be held at the county center in Riverside on March 8.

Earlier this month, Mr. LaValle introduced a bill in the Senate that would put a referendum on the November ballot asking residents of the five East End towns to consider the creation of a Peconic Bay Transit Authority. Mr. Alessi and Assemblyman Fred Thiele (I-Sag Harbor) cosponsored a similar bill in the Assembly.

The payroll tax could not have come at a worse economic time, officials agreed Friday.

Many of Friday's speakers echoed Mr. LaValle's assertion that the payroll tax was "a job-killing tax."

"For every 18 jobs in agriculture, we could have two more without this tax," said Chris Baiz, president of the Long Island Wine Council.

William Schoolman of the Hampton Luxury Liners, which runs bus service between the East End and New York City, filed a lawsuit against the MTA last year because he thought it unconstitutional to force his company to pay a tax to another transportation provider. Mr. Schoolman said that unfair taxes like the payroll tax were one of the reasons it is so difficult for small business to survive in New York.

"I had to write a check to subsidize my competitor," he said. "The MTA is a bully."

vchinese@timesreview.com