Mar 27, 2009 10:56 am US/Eastern
Albany Proposes Controversial Plan To Bail Out MTA
Senate Majority Leader Malcolm Smith Proposes Double Whammy Plan For Higher-Earning Taxpayers
NEW YORK (CBS) ―
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Senate Majority Leader Malcolm Smith has a plan to save us all from MTA fare hikes. But, as CBS 2 HD has learned, you may want to delay the celebration.
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It's a Metropolitan Transportation Authority rescue plan you heard about first on CBS 2 HD: An Albany bailout proposal that could keep transit fares from soaring. But higher-income New Yorkers would feel the pain.
Soak the rich to bail out the MTA? That's apparently what's on the table in Albany right now and so far it's getting mixed reviews.
Senate Majority leader Malcolm Smith's plan is reportedly a non-starter with Governor David Paterson and Assembly democrats. According to CBS 2's Marcia Kramer, the plan is a double whammy for higher-earning taxpayers.
"We basically are committed to making sure that the fare is not one that goes too high," Smith told CBS 2 HD.
"What we really need to make sure is that they have a recurring amount of revenue. We will be able to do that," Smith said.
Smith's plan is to hit taxpayers with a double whammy. To plug the state budget deficit he's set to approve a temporary surcharge on the personal income tax for people making over $300,000, bringing the top tax rate to something like 8.9 percent.
On top of that, Smith wants an additional -- and permanent -- income tax surcharge for the MTA.
It would take anyone who makes $100,000 and lives or works in the MTA ridership area, including those from Connecticut and New Jersey.
The rate would be .65 percent -- $650 bucks for every $100,000 you earn, even if you don't take mass transit.
The plan is sure to create a divide among MTA riders, depending of course on their income levels.
"The plan would work for me," said one unidentified commuter. "I don't make $100,000, so obviously I like the proposal. Most of us don't make that much," she added.
Smith's plan is currently not too popular in higher places however. Assembly Speaker Sheldon Silver is against the MTA surcharge.
"If in fact those surcharges do exist, we're going to push the state income tax to the point where it's probably unacceptable to New Yorkers," Silver said.
Added Kathryn Wylde of the Partnership for New York City: "New York City and state already have some of the highest personal income taxes in the country. To say we're gonna do that is to really put New York in a terrible competitive position."
MTA board member Allen Cappelli wasn't as quick to rule anything out.
"All ideas should be on the table, but time is of the essence because the train has left the station," Cappelli said.
If the two income tax surcharges do pass, Connecticut is going to look like an awfully good place to move to. Its income tax is just 5 percent.
CBS 2's Marcia Kramer first reported this story.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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