Moody's: Court OK on Tax a Positive for MTA

A New York State appellate court's upholding of the Metropolitan Transportation Authority's payroll mobility tax is a credit positive for the transit agency, Moody's Investors Service said Monday.

Nassau County Judge R. Bruce Cozzens Jr. last August called the tax unconstitutional.

The MTA, which had won four similar appeals, stood to lose at least $1.3 billion annually, or 10% of its total consolidated revenues and 12% of revenues pledged to its transportation revenue bonds, which Moody's rates A2 with a stable outlook.

A plaintiffs group led by Nassau County has said it would appeal the ruling. It has 30 days to do so. The plaintiffs include Suffolk County, several communities in Nassau and Suffolk and some upstate counties.

The tax, 34 cents on every $100 of payroll for employers in metropolitan New York, produces the MTA's largest nonfare revenue source.

Overall, the MTA has almost $33.2 billion of debt outstanding, with transportation revenue bonds accounting for $18.8 million.

Fitch Ratings and Standard & Poor's rate those bonds A and stable.

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