New MTA moneyman wonders ‘What if?’

The MTA is notorious terrible with money. Maybe they don’t have enough and need to raise the fare. But, oh wait, an accounting error reveals the Authority had more than it thought. Maybe this project will come in under budget; maybe not.

Yesterday, the MTA’s new CFO got in on the act, discussing finances and the dangers of relying on property tax. Gary Dellaverson, the former head of labor negotiations, spoke at length about the MTA and its tenuous (or not) funding situation. Metro’s Patrick Arden has more:

The booming real estate market has resulted in large surpluses at the Metropolitan Transportation Authority, defying the agency’s attempts to make predictions. Yesterday the MTA announced real estate taxes brought in $185 million more than anticipated. But former labor negotiator Gary Dellaverson warned the good times can’t last forever, as he stepped into his new role of chief financial officer.

In what he called “a pure ‘what if’ exercise,” Dellaverson showed a series of graphs charting the amounts the MTA has been raking in from real estate transactions. Taxes tripled from 1983 to ’87. “The sad part of that story is from ’87 to ’91 those taxes coming to the MTA lost 65 percent of their value,” Dellaverson said, noting a “pretty obvious bell curve” before wondering “what happens if that type of a phenomenon — that trough to peak, peak to trough — takes place again.”

So we’ve got some typical MTA financial shenanigans at work here. Dellaverson, in his first role as CFO, announces that he will be presiding over an organization that just received an unexpected $185 million surplus. For that kind of money, they could sign Derek Jeter.

But — and this is a big “but” — Dellaverson had to do something to make sure that the MTA, which has long pled poverty and is relying on large federal contributions for its pressing capital construction projects, didn’t look too financially solvent. So hey, maybe the property tax bubble will burst again, and the MTA will lose $500 million in projected revenues by 2011. Right, guys? Guys? You with me? Anyone?

Mark Page, an MTA board member and head of the Office of Management and Budget, was not fooled by this worst-case scenario act. He noted that Dellaverson’s models, seemingly pulled out of thin air, are not too be considered reliable. “Almost without exception those forecasts turn out to be wrong,” he said. That is one resounding vote of confidence for the new Chief Financial Officer.

And Gene Russianoff, whose presence in every subway-related article is actually written into the Charter, Administrative Code and Rules of the City of New York, questioned the reality of the projected $800 million budget deficit set forth by the MTA this year. I’m with you, Gene. I bet the MTA has more money than we’re led to believe here. But hey, real estate bubble? Tax breaks? Lower revenue? Godzilla? Anyone?