O'Toole is Against Stringer's Proposal to Restore a .45 Percent Income Tax on New Jerseyans

April 23, 2012 Senator Kevin O’Toole, R-40, replied today to a response received earlier today from Manhattan Borough President Scott Stringer regarding Republican Senators’ April 18 letter to Mayor Michael Bloomberg (view the letter).

The Republican Senators strongly oppose 2013 NYC mayoral candidate Stringer’s proposal to restore a .45 percent income tax on New Jerseyans who commute to work in New York City. Proceeds from the levy would be used to bail out the long-dysfunctional Metropolitan Transportation Authority (MTA).

In his response letter, Stringer tried to discredit Senator O’Toole and the caucus’ fact-based fight of Stringer’s MTA bailout attempt.

Today, O’Toole sent the following reply letter to Stringer on behalf of the caucus and more than 300,000 New Jersey residents who commute to work in New York City:

Dear Borough President Stringer:

While I appreciate your point of view, I stand by my caucus’ truthful statements and the more than 300,000 New Jerseyans working in New York City1a, who — despite your trivialization of costs — would suffer an unjust burden from your proposed reinstatement of a discriminatory .45-percent income tax.

In your April 20 response opposing the position articulated in my previous letter and statement against re-imposition of the commuter tax, you stated, “The only people who pay income taxes to the city of New York are residents of the city, and to suggest otherwise is an outright distortion.”¹ Your assertion is false for three reasons:

Approximately $11 billion New York State tax dollars fund the city’s budget, including several billion dollars for schools and social services.² In other words, the state income taxes our resident commuters must pay help fund New York City government services.

Some non-New York City residents do pay New York City income taxes — and your government has a form for that. “Most people living outside the City are not subject to NYC personal income tax. However, non-city residents who are Employees of New York City must file Form 1127 and pay taxes each year.”¹ A person earning $50,000 per year pays around $1,700 per year in city wage tax, according to 2011 rates.

New Jerseyans also pay a nearly 9-percent New York City sales and use tax, with approximately 45 percent of that revenue going to the state, 51 percent going to the city and 4 percent paying a Metropolitan Commuter Transportation District surcharge.³

I reiterate our statements in hopes of your due acknowledgement: These workers are a net benefit to city coffers, as they pay far more in taxes to the state and city than they consume in services.

Let us also acknowledge that the combined tax burden paid by New Jerseyans who work in New York City is far more substantial than the burden paid by commuters to Philadelphia and Wilmington. It must be noted that many have paid rising commuter fairs to agencies such as the MTA, for which your proposed income tax is geared.

Your response letter mentions the next generation and how they will cope with decades of MTA financial issues. I applaud your consideration in that regard, but hope you recognize the importance of holding the MTA accountable for every dollar it receives and spends. Taxpayer bailouts for the MTA should not be the eternal answer to the agency’s woes. In 2009, the New York instituted a Metropolitan Commuter Transportation Mobility taxes for residents of several New York Counties. Why does the MTA need another fringe tax?

I stand by my statement that your plan is discriminatory taxation on New Jerseyans who are not represented at New York ballot boxes or served by city government, while New Yorkers working in New Jersey are not subjected to similar treatment. Residents of both states crossing the Hudson to work pay income taxes in the state in which they are employed. However, New Yorkers working in New Jersey are not, and cannot by law, be subjected to targeted local levies such as the one you have proposed.

It may be easier to tax a group of people who have no recourse against you, but that doesn’t make it right. And years of fiscal issues at the MTA do not justify an attempt to grab our residents’ hard-earned money.

Sincerely,

Kevin O’Toole

Cc’d

Tom Kean, Jr.
Anthony Bucco
Christopher Bateman
Jennifer Beck
Gerald Cardinale
Joe Kyrillos
Joe Pennacchio
New Jersey State Senators

^1a Statistic provided by the New Jersey Department of Labor

¹ http://www.nyc.gov/html/dof/html/services/business_tax_nys_income.shtml

² http://www.nyc.gov/html/omb/downloads/pdf/erc6_11.pdf

³ http://www.nyc.gov/html/dof/html/business/business_tax_nys_sales.shtml