MTA Does Its Own Forecasting After N.Y. State Comes Up Short

New York’s Metropolitan Transportation Authority has started doing its own forecasting for dedicated taxes after state projections have repeatedly come in below expectations, MTA staff said yesterday.

“There’s been some thought that we shouldn’t just take numbers from the state and blindly accept them; we ought to vet them,” said MTA chief financial officer Robert Foran following a meeting of the authority’s finance committee. “It’s just a good check and balance.”

The MTA receives several dedicated taxes from the state including a tax on employer payrolls in the 12 counties served by the transit agency that was enacted last year under a state bailout package.

The tax was expected to bring in $1.54 billion in 2010.

April collections of the so-called payroll mobility tax came in 54% below adopted budget forecasts and were 43.4% below the state Division of Budget’s revised projections in February.

The MTA’s 2010 adopted budget assumed that mobility tax revenue in April would be $205.7 million instead of the $93.8 million actually collected.

Year-to-date collections total $510.8 million, compared to $552.4 million in the revised forecast and $694.2 million in the adopted budget.

“This phenomenon is not unique to this particular revenue source or the MTA,” Division of Budget spokesman Matthew Anderson said in an e-mail. “States and local governments throughout the country have been dealing with projected declines across virtually all of their revenue sources during this historic fiscal and economic crisis.”

Moody’s Investors Service downgraded the MTA’s revenue bonds to A3 with a stable outlook from A2 with a negative outlook in February, in part due to the Budget Division’s disclosure at that time that revenue estimates from a payroll tax had been cut by $350 million in the current year and $200 million in future years. Moody’s recalibration to a global scale put the credit at A2 with stable outlook.

The authority expects to issue $6 billion of bonds over the next two years secured by the tax, according to a draft five-year capital plan that the board will consider tomorrow at its full meeting.

Other dedicated taxes, including real estate taxes, have also come in below ­projections.

MTA board member and New York City budget director Mark Page questioned whether the authority should do its own forecasting.

“You’re bound to be wrong, as the state is,” Page said. “You won’t have the same number. But whether the dynamic you’re going to set up is a place you want to go as a step for this agency and relationship with the state, I think is something you might want to think about.”

MTA budget director Douglas Johnson said the move would provide a “comfort level” for the authority.

“If we find something that is in complete conflict ... with what we’re being told it’s just something we would want to know,” he said.

The MTA finance committee also sent to the full board a revised plan for the transfer to the Related Cos. development rights at two rail yards on Manhattan’s west side in a 99-year lease agreement valued at $1.05 billion at net present ­value.

An original agreement to develop the site in 2008 was not finalized due to the deteriorating real estate market.

In February, Goldman, Sachs & Co. pulled out of a partnership with Related to develop the 26-acre East and West Side Rail Yards in Manhattan — also known as the Hudson Yards.

The MTA would have the option to issue bonds against the lease if it choses to do so.

Development at the site is expected to cost about $15 billion and take many years.

Related spokeswoman Joanna Rose said that a ground-breaking date hasn’t been set and could not take place before 2012.

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Transportation industry New York
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