County Executive Steve Levy Announces Support For William Schoolman's Lawsuit To End MTA Payroll Tax

ATTACKING ONEROUS TAX—Suffolk Executive Steve Levy (at podium) was joined by William Schoolman, CEO of Hampton Luxury Liners and Classic Coach Companies, and Marie Zere, president and CEO of Zere Real Estate Services, in calling for an end to the MTA payroll tax that the trio said is having a devastating effect on area businesses, residents and non-profit organizations. (Note to editors: Photo is attached.)Hauppauge, NY – Suffolk County Executive Steve Levy today pronounced the MTA payroll tax to be the clarion call for “a complete overhaul of the failed business model of the MTA,” an authority that incurs more expenditures than revenue and traps taxpayers in a never-ending debt cycle. Levy announced his support for a private-sector lawsuit to end the MTA payroll tax on all parties and cited compelling legal opinions in calling for special legislation to obtain an outside review of the MTA’s wasteful practices.

The county executive was joined by William Schoolman, CEO of Hampton Luxury Liner and Classic Coach Companies and lead plaintiff in a taxpayer lawsuit to repeal the MTA payroll tax, in denouncing the MTA payroll tax on constitutional grounds and indicting the Authority business model as “a total failure for taxpayers.” Also participating was Marie Zere, president and CEO of Zere Real Estate Services, a Long Island firm focused on creating jobs and building relationships with economic development officials throughout the area.

Levy announced his support for the Schoolman lawsuit as the best way to repeal the onerous MTA payroll tax for all affected parties, not just local governments, because it is the only suit brought by a private business. In support of Schoolman’s taxpayer suit, Levy has directed the Suffolk County attorney to file briefs supporting Schoolman.

“There is a need to reign in the MTA’s absurd $13.5 billion to $5.9 billion expense-to-revenue ratio,” said Levy. “The MTA is the official mascot of failed authorities—and now, some legislators are seeking to create Long Island’s very own MTA-boondoggle in the form of a Public Benefit Corporation for the county’s skilled nursing facility in Yaphank rather than re-evaluating the very legitimacy of the authority concept.”

 Schoolman stated, “Despite its incredible competitive advantages – tax subsidies and bailouts – the MTA has not been able to run a self-sustaining business, while without all of these subsidies and head starts I have run a competing private company at a profit while providing efficient service to my customers. The MTA is the mascot of the failed ‘authority’ model. Our lawsuit represents a taxpayer revolt, a stake in the ground that says ‘enough is enough.’”

 Meanwhile, Zere said there has been an exodus of businesses due to the damaging MTA payroll tax. “We are losing people and families,” she said. “Two business clients who had to pay over $73,000 in MTA payroll taxes have picked up and moved to Pennsylvania. The MTA payroll tax is causing Long Island businesses to make a quiet exit from New York State.”

Levy emphasized that while the MTA is fixated on seeking new revenues, its problem result from inflated expenditures. “It cannot be clearer that continued reliance on the authority model is a disaster for taxpayers,” Levy concluded.

 To underscore the rampant mismanagement of MTA finances the county executive listed examples of irresponsible MTA expenditures, and called for special legislation to obtain an outside review of the MTA’s wasteful practices:

Top Ten List of MTA Irresponsibility

1.      A $20M employee lounge at Grand Central Station (Source: NYS Senate)

2.      $7M doghouse in Duchess County (Source: NYS Senate)

3.      #2 Broadway Line from $140M to $845M; (Source: NYS Comptroller)

4.      Engineers / conductors earning $283K plus $10K per mo. pension (Source: NYS Senate)

5.      8,210 out of 70,000 employees earn $100,000K (Source: Empire Research Group)

6.      1 out of 4 LIRR > $100,000 (Source: NYS Comptroller)

7.      $10,000 shoes – used once for people who had desk jobs (Source: A.M. New York)

8.      Under reported $500M while seeking 2002 fare increase (Source: NYS Comptroller)

9.      $2.3B in “Bloat” salaries (Source: Schoolman V. MTA)

10.  Staff Levels: 698 human resources, 443 legal, $10M in outside legal services, 444 in public relations, 359 accounting, 166 labor relations (Source: NYS Comptroller)