The Court of Appeals, New York State's highest court, on Tuesday dismissed Nassau County's legal challenge to New York Metropolitan Transportation Authority's payroll mobility tax by refusing to hear the case.
The MTA's 34-cent tax for every $100 of payroll in communities within its region prompted Nassau to lead plaintiffs that opposed the tax. Plaintiffs included Suffolk County, several communities in Nassau and Suffolk and some upstate counties.
Nassau County Judge R. Bruce Cozzens Jr. in August 2012 called the tax unconstitutional, but allowed the MTA to continue to collect it. An appeals court last June backed the MTA.
"This concludes a series of court rulings confirming that the PMT is constitutional, and that funding the operation and improvement of essential transportation services provided by the MTA is a matter of substantial state concern," MTA spokesman Kevin Ortiz said in a statement.
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 Investors Service rates A2 with a stable outlook.
Moody's called the MTA's legal victory in June a credit positive. The tax produces the MTA's largest nonfare revenue source.
Fitch Ratings and Standard & Poor's rate those bonds A.
The MTA has about $33 billion in debt outstanding.
