Long Island Eye: Cuomo’s $690 Million Tax Cut

We ought to know the routine: when the N.Y. State Legislature meets, nothing really important happens until the three-men-in-the-room strategy kicks in after months of hearings and no action.

That's what happened last week when the three -- Gov. Andrew Cuomo, Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos - called the Legislature back on Tuesday and Wednesday and rammed through a $690 million tax cut for everyone, not just people in Nassau and Suffolk counties.

Indeed, the Senate, headed by Skelos, a Rockville Centre Republican, rubber-stamped the 33-page tax bill in just 34 minutes on Wednesday. The vote was 55-0, with seven senators absent.

Don't count out Democratic Gov. Cuomo, who may live in Westchester now but grew up in Hollis, Queens and carried both Nassau and Suffolk in landslides last year as running mates Comptroller Tom DiNapoli and Attorney General Eric Schneiderman lost both.

One thing Skelos and the Republicans won was a sharp decrease in the despised Metropolitan Transportation Authority payroll tax voted in 2009 that provides about 15 percent, or $1.4 billion of the entire MTA budget.

The MTA tax was one reason why two new Republican senators, Jack Martins of Mineola, and Lee Zeldin of Shirley, won their seats last year. The Republicans trimmed about $250 million from it, lowering the amounts paid by small businesses with annual payrolls below $1.5 million and $1.74 million, leaving it intact for others.

Of course, the MTA is a big deal on Long Island because it owns the Long Island Rail Road and subsidizes Long Island Bus, which Nassau County Executive Ed Mangano decided to sell to a private operator, Veolia Transportation, in a deal that may be falling apart. The reason was that Nassau doesn't have the funds to subsidize it.

With an additional $1.9 billion coming into Albany as a result of a new tax hike on New Yorkers with incomes exceeding $2 million and cuts for everyone else, the MTA may be assured of funding. Still, Gene Russianoff of the Straphangers Campaign warned that $260 million had been raided from MTA funds by Cuomo and former Gov. David Paterson, who was raised in West Hempstead, so there's a bad precedent.

Meanwhile, DiNapoli recently reported that the MTA's finances are volatile and unpredictable. The MTA just got a new boss, Joe Lhota, a Republican well-regarded for management skills.

Despite the income tax and MTA payroll tax decrease, New Yorkers remain among the highest taxed Americans. Property taxes, about 65 percent designated for Long Island's 124 school districts, are among the highest in the U.S.

Nassau's $2.6 billion budget last week won a narrow approved by the Nassau Independent Financial Authority while Suffolk's $2.7 billion has been approved, although incoming Democratic County Executive Steve Bellone still may discover problems next month.

So the problems remain: Albany expects to have more money coming in, having gotten Republicans to actually vote to raise taxes in a time when that's anathema to the national Republican Party. But how about the MTA, which raised fares on Dec. 30, 2010 for commuters? Don't forget the Port Authority, which owns the bridges, began a 56 percent five-year toll hike on Sept. 1.

Any day, DiNapoli, a Great Neck resident, will likely project 2012 tax receipts based on December estimates for income tax and sales tax payments for the year. Given the slow-recovering economy, the comptroller could warn Cuomo, Silver and Skelos that the December tax cut could translate into April's budget deficit.

That could mean the windfall could only be temporary rather than what Cuomo hailed as the best path for this state at this time.