The Chief
November 22, 2002

Tied to Commuter Hike, Unions Aim to Undo Nonresident ‘Tax”

By Mark Daly

Sensing an opportunity in Mayor Bloomberg’s proposal for a new type of commuter tax, the leaders of the city’s uniformed forces are lobbying for the repeal of a City Charter provision that requires their members who live in the suburbs to pay an amount equal to the city income tax.

A total of 24-city unions support the effort, in which union leaders are demanding that any new tax on commuters be designed to supplant the special fee levied on nonresident city employees under Section 1127 of the City Charter.

‘A Take-Home Hike’

“We as a coalition are not opposed to the commuter tax. This is a way to give the cops and firefighters, who need it, a take-home raise,” said Tony Garvey, the president of the Lieutenants’ Benevolent Association and the coordinator for the effort.

The nonresident payment, currently about 3.65 percent of income, has been required since 1973 adds a condition of employment for cops and firefighters, who under state law are allowed to live outside the city. Other employees who are exempted from the city residency requirements also must pay that amount.

The workers who must pay it deride the Section 1127 fee as an unfair tax, although state court decisions have repeatedly upheld the city’s contention that it is voluntary.

Advocates for repeal of the payment say their position is simple: if the commuter tax is reinstated, “Let’s tax all workers, public and private sector, equally and fairly,” said Martin Stedman, a lobbyist for the fire officers’ union.

Unions in Support

The coalition lobbying to overturn Section 1127 includes Robert Ganley, vice president of the Sergeants’ Benevolent Association; Peter Gorman, president of the Uniformed Fire Officers’ Association; Joseph Mannion, president of the Sanitation Officers’ Association; Peter Meringolo, president of the Correction Captains’ Association; James Slevin, vice president of the Uniformed Firefighters’ Association; and Robert Zink, recording secretary of the Patrolmen’s Benevolent Association.

Mr. Zink acknowledged the group faces an uphill battle in convincing Mayor Bloomberg or City Council Speaker Gifford Miller to support their idea. If the city imposed a 1-percent commuter tax and kept the 1127 payment, it would get an additional $40 million over the commuter tax alone, he said. Mr. Bloomberg has proposed levying the city’s personal income tax on commuters, which would yield considerably more.

The city’s leaders “are facing a $6 billion deficit. That’s their focus,” Mr. Zink said.

Still, the unions plan to send lobbyists to Albany to fight for their position. Mr. Garvey calls the 1127 payment “basically a kickback,” since employees must pay it or face the penalty of being fired. “If a huge corporation tried to impose this kind of requirement, it would be called unlawful,” he said.

A bill to overturn Section 1127 failed to clear the State Legislature this year, but leaders of the movement argue that the unfairness of the payment has grown starker with the passage of time.

A Double Hit

Until the commuter tax was rescinded in 1999, nonresident city employees had to pay both amounts. The Section 1127 payment was adjusted so the total of both payments equaled the 3.65-percent city income tax.

When a contentious State Senate race in a district covering both Rockland and Orange counties prompted Governor Pataki, Senate Majority Leader Joseph L. Bruno and Assembly Speaker Sheldon Silver to support the elimination of the commuter tax in 1999, the city ratcheted up the 1127 payment to equal the city tax. The city’s non-resident cops and firefighters “didn’t get the benefit of the repeal of the law,” said Mr. Ganley.

More recently, Mr. Ganley, a transit cop, has waged a successful legal battle to prevent the city from imposing the Section 1127 payments on members of the former New York City Transit and Housing Authority police forces. Before their jobs were transferred to the Police Department, transit and housing cops did not have to make Section 1127 payments.

EMS Personnel Exempt

In a similar case, a state court said the payments could not be imposed on Paramedics and Emergency Medical Technicians who were transferred to the Fire Department from the Health and Hospitals Corporation.

About half of the unions in the lobbying coalition filed a Federal lawsuit this summer in which they argue the 1127 payment violates their due-process rights under the U.S. Constitution.

The 13 unions in the lawsuit contend it is unfair for the Finance Department to require payments from their members while excluding the city’s Teachers and employees of the District Attorneys, County Clerks and Public Administrators in the five boroughs. A ruling on motions for summary judgment in the case is expected by the end of next year.