The state’s highest court has declined to hear a challenge to a controversial regional payroll tax for the Metropolitan Transit Authority.

The ruling by the Court of Appeals on Tuesday lets stand the tax in downstate counties that helps fund the region’s railroads, subways and buses.

The state Appellate Division of state Supreme Court in June rejected a constitutional challenge to the tax led by Nassau County. The top court denied a motion to appeal.

The tax was passed in 2009 to avert service cuts as the MTA faced a record deficit. Local officials say the tax is bad for business.

A spokesman for Nassau County Executive Edward Mangano says Tuesday the lawsuit has already resulted in the state eliminating the tax for thousands of small businesses in 2011.

(AP)