Chapter 25 of the laws of 2009, also known as A8180 (Silver), placed an unconstitutional payroll tax and financial burden on tax-exempt religious schools in 12 counties of New York State. This tax is referred to as the Metropolitan Commuter Transportation Mobility (MCTM) tax. The MCTM is a tax on employers – including constitutionally-protected churches and synagogues.

New Yorkers for Constitutional Freedoms (NYCF) represents many of the affected church-owned and operated schools. The MCTM is technically a tax upon the house of worship’s payroll.  Any tax upon a house of worship is wrong. Daniel Webster argued before the US Supreme Court, “An unlimited power to tax involves, necessarily, a power to destroy,” (McCulloch v. Maryland, 17 U.S. 327). Yet that is exactly what may happen to some of these faith-based schools.

Faith-based schools educate their students at approximately one-fourth the average cost of a public school student. The graduation rate and percentage of students from these church-based schools going on to higher education far exceed those of public schools. The US Department of Commerce reported that New York State spent $15,981 per pupil – the highest in the nation.[i] For each student educated in a religious school, the state is saving, on average, almost $16,000 per year.[ii]

The religious schools represented by NYCF receive extremely limited state aid (such as mandated services) and operate on austerity budgets. This tax, even if it were legal, causes a serious financial burden to the schools.

Reportedly, Governor Paterson and legislative leaders had agreed to reimburse the public schools for this tax, making the net impact on the public schools zero. This is discriminatory treatment of faith-based schools. The parents of the students in faith-based schools are paying ever-increasing school taxes in addition to often sacrificial tuition payments. A family’s personal taxes have increased to pay the MCTM tax for their public school district, and to add insult to injury, they will also have to pay higher tuition rates to cover the MCTM tax at the faith-based school.

NYCF strongly urges the Governor and the New York State Legislature to immediately take action. New York’s private school families need a course correction to resolve this unconstitutional taxation of religious schools. This correction should include reimbursement of taxes already paid, as is being done for public schools.