The credit rating for New York’s Metropolitan Transportation Authority improved from “stable” to “positive,” Gov. Kathy Hochul announced Tuesday.
Moody’s Investors’ Service amended the outlook for the MTA’s Transportation Revenue Bonds based on the significant increase in dedicated state tax revenues secured by Hochul in the most recent state budget. The new budget led MTA to forecast five years of balanced budgets for the first time in the transportation authority’s history.
“The MTA is a critical resource for millions of New Yorkers, and that’s why I fought so hard to save them from the looming fiscal cliff,” Hochul said. “The budget investments we made this year will make transit better for commuters throughout the region, and I’m pleased to see Moody’s recognizing these investments through the improved rating outlook.”
The credit rating improvement is likely to boost investor confidence in the MTA and could lead to reduced interest rates the agency would pay on future capital program bonds, the governor’s office said.
“As I said back in July, Governor Hochul and the State Legislature delivered for riders with this year’s budget, securing the MTA’s current and future financial stability,” MTA Chair and CEO Janno Lieber said. “Moody’s action improving their credit outlook for the MTA reflects that significant financial progress, as well as the steady return of ridership and our success beating back subway crime.”
The MTA’s financial profile was strengthened by a state subsidy of $300 million, dedicated revenue funding sources, including an increase in Payroll Mobility Tax and city funding for paratransit, and other dedicated tax revenues, along with modest fare and toll increases.
“An improving outlook assumes that if we execute on our five-year financial plan announced in July, the first in MTA history to show five years of balanced budgets, the MTA could be on the path to a full credit upgrade, MTA Chief Financial Officer Kevin Willens said. “With our financial standing now solid, we can be flexible in the ways we progress on capital projects to complete necessary state-of-good-repair work and deliver better service so we can continue to bring riders back.”