While most New Jersey residents can sympathize with New York City’s financial woes ever since the terrorist attacks on the World Trade Center, they certainly don’t want to pay for them.
However, if New York Mayor Michael Bloomberg’s radical proposal for a commuter tax goes through, that’s exactly what will happen.
Bloomberg’s proposal, which would have to be approved by New York’s State Legislature as well as New York Gov. George Pataki, would tax New Jersey residents commuting to work in New York. Those earning $100,000 a year would be taxed at a rate of 2.7 percent.
The commuter tax would generate $1 billion a year for the city. It is also part of a wide-scale proposal that includes massive layoffs and property tax increases in order to try to fill a projected $6 billion deficit.
The proposed commuter tax has downright angered New Jersey’s legislators, both locally and statewide.
“It’s outrageous,” said New Jersey State Assembly Speaker Albio Sires, who also serves as the mayor of West New York. “We have people who live here, work in New York and already pay New York state taxes. Now, they’re going to get hit again. That’s just not fair.”
Sires said that he has already written two letters directly to Bloomberg to voice his displeasure over the plan.
“It’s not acceptable,” Sires said. “New Jersey has stood by New York through its troubled times. Having New York in dire straits doesn’t help the region. I know that he has a big hole to fill, but it cannot happen at the expense of New Jersey residents.”
State Senator and North Bergen Mayor Nicholas Sacco agreed. “It’s grotesquely unfair,” Sacco said. “People are needed to work in New York, and New Jersey supplies those people. Sure, they have a budgetary problem in New York, but they plan to leave it on the shoulders of New Jersey. Our residents already pay a lot to commute into the city, via bridges, trains, ferries.”
New Jersey Gov. Jim McGreevey has yet to comment on what procedure can be put into place to block the proposed tax, but he said in a statement that he has been in contact with Bloomberg’s office to try to reach a happy medium.
McGreevey’s office said there are about 250,000 New Jersey residents who commute into New York City each day, and they already spend about $2,500 each year on the average in direct commuting costs.
New Jersey residents paid a commuter tax, imposed in 1966, to New York City, but it was at a much smaller rate until the tax was rescinded in 1999.
That tax was scrapped after former Mayor Rudolph Giuliani tried to remove the tax for New York residents, but have the tax still apply to New Jersey and Connecticut commuters.
A federal judge struck down that arrangement as an unconstitutional obstacle to interstate commerce, and the tax, along with the $500 million a year it provided to the city, was eliminated altogether.
“We don’t have the ability to block the tax,” Sacco said. “But we do have the ability to reciprocate.”
Sacco said that if Bloomberg’s plan goes into effect, he would ask the State Legislature to consider approving a commuter tax for New York residents that work in New Jersey.
“It’s very unhealthy to do this between the states,” Sacco said. “If we feel the brunt of this, then New York residents should feel the reverse.”
The proposal could start up the “border wars” that existed between the two states when Giuliani’s proposal was first introduced six years ago.
Some legal experts are examining the idea that the proposal could be unconstitutional, stating that it is basically taxation without representation. If that is the case, then the idea is a moot point.
Weehawken Mayor Richard Turner, whose town receives more than 12,000 commuters daily through the township-based NY Waterway ferry service, believes that the tax is a poor idea.
“It’s absolutely uncalled for and it’s calling for an astronomical rate,” Turner said. “It’s not acceptable and counterproductive. This does not solve the problem of the overall economy. It’s more of a setback than a solution. Hopefully, the governors of New York, New Jersey, and Connecticut will get together and hopefully, cooler heads will prevail.
Turner added, “No question, New York City is the center of our economy and we all want to see it succeed. But it can’t be done at our expense.”
Some of the commuters polled Monday were sympathetic to New York’s plight, but were also upset at the thought of footing the cost.
“I give so much of my pay to New Jersey State tax, New York State tax, and federal state tax,” said Doug Briar, a North Bergen resident who is a bond trader in Manhattan. “Now, there will be this? I already have to pay so much money in terms of parking and the ferry.”
Some didn’t even know about the proposal.
“Are you kidding me?” said Sheila Hutchinson, a Weehawken resident who works in Manhattan as an executive secretary. “How much? That’s amazing. This may force me to look for work on this side of the river. The nerve of him [Bloomberg]. He should have New Yorkers solve New York’s problems.”
“It’s downright sickening,” said Evelyn Montes, a North Bergen resident. “Everyone wants another piece of my paycheck. In these times, I can’t afford to keep giving. I love New York like anyone else, but not if they’re going to take my money.”
Sires said that he already has some plans in place in case this commuter tax is enforced. “We’re formulating action just in case,” Sires said.