Beware the Dreaded Commuter Tax

By GEORGE SAVA
This week, Manhattan Borough President Scott Stringer raised the idea of restoring the New York City Commuter Tax Surcharge.  The New York State Legislature eliminated the original 33 year old surcharge in 1999.  According to Business Week, “The idea of restoring the tax was raised by Manhattan Borough President Scott Stringer, who told The New York Times that it could generate $725 million each year for regional mass transit.”  Mr. Stringer’s office went on to state that the estimate was based on using a tax rate of .45 percent for most commuters, which was the same rate previously used.  If restored, this tax could negatively impact 800,000 commuters, with a great many coming from Long Island.  Clearly this tax was and is a bad idea.
Moreover, this plan where non-residents foot the bill for yet more of New York City’s government spending is most troubling when you consider that Mr. Stringer is apparently a leading candidate for New York City Mayor in 2013.  Does he actually believe that since commuters use roads and transit systems which may impose a possible burden on the city’s emergency services that we are somehow getting a free ride?  Mayor Bloomberg has previously called for the restoration of the commuter tax.  In his earlier support for the reinstatement of the tax, the Mayor argued, “What we’re trying to do is say that everyone that works in the city benefits from all of the services, the Fire Department for example, and it is only equitable that everyone pays a share of that.”  In 2008, Mayor Bloomberg was quoted as saying that, “”I’ve been screaming about commuter taxes for as long as I’ve been here.” It should be noted that if one works in New York City and lives in the suburbs he or she already pays a non-resident income tax to the city which is deducted from paychecks. This is a lower rate than city residents pay. What Messers. Stringer and Bloomberg are talking about is an additional surcharge on top of the existing non-resident income taxes out of town city workers now are hit with.
Notwithstanding Mr. Stringer and the Mayor’s calls to further gauge commuters who work in New York City, according to a National Taxpayers Union Foundation policy paper, “The argument that commuters don’t contribute to the communities in which they work is rather suspicious on its face.  After all, commuters obviously contribute to the local economy and by extension the local government by buying meals, shopping during workday breaks, going to happy hours, attending social functions, contributing to charities, and often through volunteer work in the community.  Although it is impossible to place an exact price tag on their worth, these activities compensate at least a little for the infrastructure and emergency services commuters use.  In addition, companies for which commuters work pay business property taxes, in some cases contributing to schools that are never used by commuters’ children.”
The paper goes on to state that, “In fact, commuters into New York and several other major cities already face a ‘commuter tax’ as many major routes of entry to urban centers face substantial tolls.”  Notwithstanding the foregoing, somehow we are still considered fair game.
Fortunately, there appears to be enough dissatisfaction with the plan that any attempt to reinstate the tax would be thwarted.  According to Business Week, “Mark Hansen, spokesman for the New York State Senate’s Republican majority, which would have a say in the plan, said it isn’t under consideration. ‘We need to cut taxes, not increase them.’”
Still, ever since the tax’s elimination various politicians have sought to bring it back.  Each time, however, they have been met with resistance from numerous elected officials including our own.  Nevertheless, when considering current governmental needs and the sluggish economy I believe New York City’s calls for reinstatement of the commuter tax will sadly intensify.