Gov. Paterson wants city businesses to shoulder a 59 percent hike in the payroll tax used to fund the MTA — to spare straphangers from facing even more service cuts.
In his latest revised state budget — which had predicted a $400 million drop in projected revenues from the tax — Paterson has proposed hiking the tax on city businesses from .34 percent for every $100 of payroll to .54 percent.
Meanwhile, the other seven counties served by the MTA’s transportation network would catch a hefty break under the plan.
Those counties — Suffolk, Nassau, Putnam, Westchester, Orange, Dutchess and Rockland — would see their rate slashed in half.
Elected officials and shop owners in those counties have railed against the tax — which was instituted last year — saying they pay the same rate as city businesses while getting only a fraction of the transit service that Big Apple residents get.
But a furious Mayor Bloomberg vowed to fight Paterson’s “wrongheaded proposal.
“The idea that the State can spare the suburbs while sacking the City is terrible economics, grossly unfair and contrary to every principle of good regional development,” the mayor seethed in a statement.
The MTA said the change would make up $230 million of the MTA’s $400 million budget gap for 2010, which was caused by the payroll tax not bringing in the amount officials initially expected.
If Albany approves the change, it would “lessen the need for additional cuts on top of those passed in December,” said MTA spokesman Jeremy Soffin.
“It would not eliminate the need for the service cuts and administrative reductions included in the MTA budget passed in December.”
The agency has already proposed massive service changes — including eliminating the M line and replacing it with the V — because of a deficit and also plans to eliminate free student fares and reduce service for disabled riders.
Kathryn Wylde, head of the Partnership for New York City, said she supported the initial payroll tax, but added it shouldn’t be changed “unless the MTA gets better control of spending and improves its contracting and procurement processes.”
Other transit advocates said they hope the funds could be used to reinstate the proposed service cuts.