Many residents say Long Island commuters and businesses are getting the raw end of the deal when it comes to recommendations from a state panel on how to plug the MTA?s enormous budget gap.

Gov. David Paterson says he understands the frustrations, but economic circumstances call for drastic action. Long Island residents say the most infuriating recommendation in the Ravitch Commission report is a payroll tax for surrounding businesses. Employers would be required to pay $330 in taxes for every $100,000 they pay their workers.

?It comes out of left field,? says Pete Smith, owner of Massaro?s Pizzeria in Mineola. ?I don't know why the MTA should be getting money from surrounding businesses.?

MTA Chairman Richard Ravitch says employers are also beneficiaries of the transit system and that a payroll tax ?is an effort to spread the burden among the largest group that one possibly can.?

The commission also says the MTA should implement an 8 percent rate hike, instead of the 23 percent hike proposed by the authority. Another proposal includes placing tolls on East River bridges.

The Ravitch Commission?s recommendations need the approval of the state Legislature.

To watch Gov. Paterson's press conference about the commission's findings, go to Channel 612 on your iO digital cable box and select iO Extra.