MBTA selling bonds hours after income tax repeal fails

By Noah Bierman, Globe Staff

The resounding failure of a ballot initiative to eliminate the state income tax had an immediate impact on the MBTA, which began selling bonds this morning to pay for structural improvements to service.

“We’re selling them as we speak,” said Jonathan Davis, deputy general manager and chief financial officer of the Massachusetts Bay Transportation Authority, in a telephone interview just before 11 a.m.

The T had held off selling $357 million in bonds in recent weeks because of advice from financial advisors, who said the agency may not get the best price during the uncertain period before the election. The bonds are tax-free, a perk that could have been diminished if voters had scrapped the income tax.

Davis said the agency was ready to start selling them immediately after the election so it could get a jump on other government bodies around the country that may also have delayed floating bonds until after the election.

The T will use the money for station improvements, train equipment, bus overhauls, and other long-term projects deemed important to keeping the transit system running.

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