Gothamist: A political Rorschach test centered on New York state’s latest push to fund the MTA is coming to a campaign trail near you.
Gov. Kathy Hochul and other Democrats argue that for thousands of small businesses in the New York City area, the state budget passed earlier this month decreased a key tax that helps fund the public transit system. Republicans assert the Democrats actually increased that tax overall — to the tune of $1.4 billion a year.
They’re both right — and whether either side can sell voters on its point of view could have an effect on the governor’s race and state legislative contests in 2026 —particularly in the key political battleground of the New York City suburbs.
“It involves a tax cut for small businesses,” Hochul said Wednesday. “So if the Republicans want to criticize that, I don’t think that’s a good political strategy for them – not that I wanna give them free advice.”
The tax at the center of the debate is what’s known as the payroll mobility tax, or PMT. And since Democrats in the state Legislature voted to implement it in 2009 — only to lose their slim majority a year later — it’s been something of a political third rail.
It applies to most employers, including private businesses and many government entities, in New York City and seven suburban counties serviced by the MTA. Those with annual payrolls of about $1.2 million pay the tax, which is used to help fund the transit system.
Earlier this month, Hochul and the state Legislature — which, since 2019, has been back in firm Democratic control — approved a $254 billion state budget that included funding for the MTA’s $65 billion construction program. The capital plan, as its known, includes billions of dollars in much-needed repairs and upgrades designed to keep the bus and train systems from deteriorating further, and Hochul and lawmakers were under acute pressure to find a way to fund it.
The key piece was the $1.4 billion annual hike in the payroll tax, which the MTA will use to borrow additional funds to pay for its plan.
That hike left Republicans eager to pounce, particularly on Long Island and in the Hudson Valley, where the tax has long been deeply unpopular.
