The Hazan: Rabbi Raphael Elnadav z.s.l.
By: Dave Gordon
The estimated $8 million annual savings that will result from the recent exemption for New York State’s private schools from the MTA payroll tax, is not necessarily the most significant factor to come out of last month’s legislation. Advocates are hopeful that the new tax break, which will benefit about 100,000 students in Jewish day schools, will also herald a new era of fairness and equity for the states’ estimated 400,000 students who attend private schools.
Leading the effort to secure the tax exemption were Councilman David G. Greenfield; Councilman Eric A. Ulrich; Rev. Msgr. Kiernan E. Harrington, Vicar for Communications for the Roman Catholic Diocese of Brooklyn; Rabbi Mordechai Besser, Principal of Manhattan Day School; and Sam A. Sutton, Co-President, TEACH NYS.
Previously, only public schools qualified for an exemption from the payroll tax. The new policy, extending the exemption to private schools, was signed into law on December 3rd by Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver.
Mr. Sam Sutton describes his disbelief when the original legislation was first signed into law and gave no tax break to private schools. “When we first saw this two years ago, we couldn’t believe it. How could the government ignore 15 percent of students – all of the children in the non-public school system? How could it be that only public schools, which already get funded by the state, are the only ones to get a break from the MTA tax?”
“Simply put, this is an issue of fairness and equity,” Greenfield said in a statement, adding, “It’s not right to hold private schools to a different standard than public schools… I am optimistic that this is the beginning of a turning of the corner in terms of equity for state aid to private schools.”
Councilman Ulrich also spoke of the equity issue at stake. “It wasn’t fair to tax them at a higher rate than public schools, and I applaud the state for eliminating this tax burden for all schools," he said in a statement.
Rabbi Besser said he was pleased that the state recognized the critical role non-public schools play in the education system. “The teachers who nurture thousands of children should be treated at least as well as their public school counterparts,” Rabbi Besser pointed out. “This is a good first step in showing the non-public school educators that they deserve the state's support and respect, just as the public school teachers do.”
The MTA (Metropolitan Transportation Authority) tax was imposed in 2009 in order to help finance the ailing and debt-ridden transit system. The tax had provided about $1.4 billion for the MTA, but this amount is expected to be reduced by over $250 million under the new law. In addition to exempting private schools, the new legislation also reduces or eliminates the .34 percent MTA tax for most businesses in the 12-county MTA service area. Beginning in 2012, businesses with payrolls of $1.25 million and under, will see the tax eliminated, those with payroll between $1.25 million to $1.5 will see a reduction to .11 percent and the tax rate for businesses with payroll from $1.5 million to $1.75 million will be reduced to .23 percent. The tax will remain the same for businesses with payrolls over $1.75 million.
“While it may seem relatively small in the grand scheme of things, $8 million for struggling schools is a lot of money,” Greenfield told Community. “A school of 500 students could easily make back tens of thousands of dollars.”
This success was the culmination of a process of reaching out to elected officials in Albany, a campaign that has been going on since the tax was first created.
“We never thought it was at all fair,” Greenfield said. “After speaking to many officials, they kept telling us ‘we’ll revisit the issue.’ Quite frankly, we thought it was an improbable task. It’s a lesson in persistence. In this case it took a couple of years.”
Greenfield also noted that this successful initiative is one of many signs that “the state now takes us a lot more seriously,” and described it as, “a very significant victory in what will hopefully be a string of victories going forward.”