In April, the state-run Metropolitan Transportation Authority won Albany’s approval for a new, $1.5 billion annual tax on downstate payrolls. Now, the authority, with fresh finance-committee approval this morning, is moving to float a $600 million short-term bond against those expected revenues.
The MTA expects that the bond issue will cost $7 million to taxpayers and riders in interest costs, underwriting fees, and the like.
The biggest part of the cost is a $5 million fee that the MTA must pay to the state to float bonds under an obscure revenue-raising scheme, a fee for which the MTA is seeking a waiver.
MTA CFO Gary Dellaverson says that he doesn’t expect this borrowing to recur.
But the danger with this type of short-term search for cash is that the MTA’s revenues, including the money from the new payroll tax, could keep coming in lower than the MTA has estimated. Revenues have consistently fallen short of estimates for more than a year now.
They payroll-tax revenues against which the MTA will borrow will come in lower than expected, for instance, if the downstate region’s personal income continues to shrink next year.
Barclays, the British buyer of Lehman Brothers’s assets, will be the lead underwriter on the issue, with Ramirez & Co. playing a secondary role as the MTA’s mandated “minority business enterprise.”
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