New York Governor Kathy Hochul’s plan to increase payroll taxes to fund the Metropolitan Transportation Authority’s (MTA) $68 billion capital plan has ignited fierce opposition from business leaders, who warn it could drive companies out of the state and burden workers.
The proposed tax hike aims to help fund a capital improvement plan for the MTA, which currently faces a $3 billion funding gap despite this measure.
Critics argue the tax will discourage investment, lead to employee cuts, and push companies out of New York. Opponents, including billionaire John Catsimatidis and Republican lawmakers, blame long-standing MTA mismanagement and question whether the collected funds will be spent effectively.
Former Senator Al D’Amato, now a lobbyist for large firms, labeled the plan “ridiculous,” asserting it would force companies to leave the state. Rep. Mike Lawler (R-NY) criticized the tax as a bailout for the “corrupt MTA,” highlighting rising felony assaults on commuters as evidence of the agency’s mismanagement.
The final budget deal includes tax relief for businesses with payrolls under $1.75 million, while the MTA is expected to find savings to cover the remaining shortfall.
Supporters like The Partnership for the City of New York view the plan as a balanced compromise that reduces burdens on smaller businesses and involves contributions from the state, city, and MTA. However, Heather Mulligan, president and CEO of The Business Council of New York State Inc., argued that businesses cannot continue to shoulder tax increases.
The tax hike follows Hochul’s controversial decision to halt the congestion pricing plan, which was expected to generate significant revenue for the MTA. The sudden reversal left a funding gap, prompting the current tax proposal.
