Suburban Democratic lawmakers want to drive Gov. Hochul’s plan to boost the payroll tax on businesses to fund the beleaguered MTA off the tracks – at least for their own constituents.

 “We respectfully request that all counties outside of New York City’s five boroughs be exempt from the executive’s proposal to expand the MTA Payroll Mobility Tax,” state Sens. James Skoufis (D-Woodbury), Michelle Hinchey (D-Kingston) and Monica Martinez (D-Hauppauge) said in a Monday letter to Senate Majority Leader Andrea Stewart Cousins (D-Yonkers).

Hochul’s plan – part of her $227 billion executive budget proposal unveiled Feb. 1 – would increase the top payroll tax to 0.50% from 0.34% on employers and self-employed individuals in New York City and seven suburban counties served by MTA trains and buses. The increase is projected to generate $800 million per year starting July 1.  

Hochul also wants to increase the rate imposed on the net earnings of a self-employed business owner to 0.42% for tax year 2023 and to 0.50% beginning in tax year 2024.

But the three Democrats – as well as GOP state Sen. Robert Rolison (R-Poughkeepsie), who also signed the letter – argue suburbanites hardly get enough bang for their bucks even under the existing payroll tax affecting Suffolk, Nassau, Westchester, Rockland, Putnam, Orange and Dutchess counties in addition to the five boroughs.  

“Given the existing value gap outside the city (e.g. there are no subways and few MTA-operated buses) and the very fact that businesses in the city are the primary business beneficiaries of the system – riders take the MTA to get to work in New York City; riders generally do not take the MTA to get to work outside New York City – exempting non-New York City from the increase associated with this already-unjust tax is the appropriate response,” the letter reads.

The lawmakers further complained the “vast majority of revenue” from the tax hike proposal would be pumped into New York City Transit, which runs the subway and bus lines — rather than the suburban-focused Long Island Railroad and Metro-North.

They also said that community colleges, local governments and hospitals should be completely exempt from the tax, which was first imposed in 2009.

Assemblyman Jonathan Jacobson (D-Poughkeepsie), whose district is largely west of the Hudson River, said Hochul’s proposed tax increase hardly makes sense given that Dutchess, Orange, Rockland and Putnam counties have to share a single vote on the 23-member board.

“I think it sends the wrong message to the business community. I also think that we’re not getting what we deserve,” he said of the governor’s plan. “And it’s really another problem of taxation without representation. I mean, we only have got a quarter vote [on the MTA Board], and it’s not right.”

Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University, said the proposed MTA payroll tax increase is about as popular in the ‘burbs as another Hochul-backed proposal, to boost housing density by overriding local zoning rules.

“I know that a lot of Democrats on Long Island see the one-two punch of the payroll tax and housing proposals as bail-reform-like ‘gifts’ from New York City progressives to ensure that the party doesn’t win another election on Long Island in their lifetimes,” Levy said.

Even some New York City Democratic lawmakers said they prefer to impose higher taxes on the wealthy than raising the payroll levy.

“There is not an appetite within our conference to punish middle-class people,” said Assemblyman Ron Kim (D-Queens).

Hochul and the Democratic-run Assembly and Senate will have to negotiate a budget compromise for the new fiscal year beginning April 1.

A defection of ten Democrats in the state Senate would make it unlikely that Stewart-Cousins would support the MTA payroll tax hike in budget talks with the governor.

Democrats may also feel emboldened to dramatically rewrite Hochul’s budget plan after the state Senate made her the first governor to ever have a chief judge nominee rejected after centrist judge Hector LaSalle was voted down 39-20 last week.

The governor’s transit bailout plan also calls on New York City to contribute another $500 million annually to help fund the MTA’s Access-a-Ride service for the disabled and discounted student fares – an idea Mayor Eric Adams opposes.

The newly-elected governor has also promised the MTA the bulk of the $1.5 billion generated from the sale of three new downstate casino licenses as well as most of the future tax revenues.

Hochul says the money is needed to save the MTA, whose ridership and fare box collections cratered during the COVID-19 pandemic and has not fully recovered.

“For many, many New Yorkers, the MTA is their lifeblood,” the governor said during her budget rollout speech. “If we don’t invest in that, we won’t be looked at favorably by future generations.”

Some suburban Democrats like Assemblyman Kenneth Zebrowski (D-New City), who chairs the committee that oversees the MTA, say they remain open to an increased payroll tax ahead of the April 1 state budget deadline.

“Our goal is to minimize the financial impacts on New Yorkers while preserving and hopefully increasing service across the service territory and this is no easy task,” the Rockland legislator said. “Taxes, fees, fares, expenses and service are all intertwined and affect one another; our job is to find the right balance.” 

MTA CEO Janno Lieber defended Hochul’s proposed tax increases last week, claiming it was “incremental.”

“The important thing is, all the employers want five-day-a-week robust transit service so they can get their employees to come in. But they’re letting people come in one to three days a week,” Lieber told WCBS NewsRadio 880 at the time. “We need a little help from the businesses who are benefiting from five-day-a-week, very reliable and super-frequent MTA service to chip in in that way. Remember, we’ve got on-time performance the best in 10 years on the subway. Metro-North and Long Island Rail Road, historic high on-time performance — 96 and 97%. Never seen numbers like that before. We need a little help from the businesses to make sure we can do that even though people are coming in less frequently.”