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Jan 7, 2010 9:42 AMPublication: The Southampton Press

Bus company files suit over MTA tax

Jan 7, 2010 9:42 AM

William Schoolman, the owner of Hampton Luxury Liners and Classic Coach, filed suit against several New York State elected officials last month over the new Metropolitan Transportation Authority payroll tax.

The suit, filed in New York State Supreme Court in Central Islip on December 14, alleges the Metropolitan Transportation Authority payroll tax authorized by the State Legislature last year is unconstitutional. The payroll tax was instituted to help pay off soaring deficits in the MTA budget and requires businesses and municipalities to pay 30 cents for every $100 in payroll.

Mr. Schoolman, who grudgingly paid his share of the tax—$20,000 in November—said by paying the tax he is essentially “subsidizing” a business competitor, the MTA. He pointed out that the Long Island Rail Road and the MTA’s Metro North line serve the same communities as his fleet of 40 buses.

“It is just outrageous that I am being forced to subsidize my competitors,” Mr. Schoolman said. “I don’t think [the MTA is] a well-run business. The bailout is not going to help the MTA. Enough is enough.”

The suit was served to state officials including Governor David Paterson, Assembly Speaker Sheldon Silver, Senate President Malcolm A. Smith and Comptroller Thomas DiNapoli. The MTA and New York State Department of Taxation and Finance were also served in the suit.

Representatives of state officials declined to comment on the suit.

“Because it’s ongoing litigation, we’re declining to comment,” said Austin Shafran, a spokesman for Mr. Smith.

Nonetheless, he defended the payroll tax as necessary to maintain services that the MTA provides commuters.

“At the time it was passed, the payroll tax was utilized as a last resort to prevent fare hikes and services cuts that would have been devastating to millions of commuters who rely on the MTA to get to and from work,” Mr. Shafran said.

According to the MTA’s website, the LIRR served 87.4 million commuters in 2008, up from 86.1 million in 2007. Mr. Schoolman said his buses transport up to 3,500 people a week, or roughly 182,000 people a year.

Mr. Schoolman noted that his service from the Hamptons to New York City offers eight departure times in a day, while the LIRR offers only three.

“I have eight departures a day and conveniently located, so it’s just not right,” Mr. Schoolman said.

Mr. Schoolman, who said he is not considering a run for public office, said the suit is not politically motivated.

“Our elected officials really dropped the ball on this one,” Mr. Schoolman continued. “It is not only unconstitutional from a legal perspective, but it is bad for business.”

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Nicely done HLL - go get em!
By BIGjimbo12 (201), East Quogue on Jan 8, 10 12:26 PM
Ditto, go get them. It is a total joke that we have to pay not only the MTA payroll tax, but alo the other usary taxes that everyone else on LI has to pay to support the MTA/LIRR. It's a total joke as when do we ever use the LIRR ?
I know, that I m not the only one on the east end who goes to the city on a regular basis, and NEVER uses the LIRR.
In my case I always use the Jitney (the Luxury Liner does not serve my town).
By EEGO (10), Bridgehampton on Jan 8, 10 4:26 PM
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