(WNY News Now) – Moody’s Investors Service has revised the Metropolitan Transportation Authority’s (MTA) credit rating outlook to “positive” from “stable” due to a significant increase in dedicated state tax revenues, marking a historic milestone in the MTA’s financial trajectory.
NYC – New York Governor Kathy Hochul announced that Moody’s Investors Service has improved the credit rating outlook for the Metropolitan Transportation Authority (MTA) from “stable” to “positive.” This revision is underpinned by a notable surge in state tax revenues, enabling the MTA to project five consecutive years of balanced budgets for the first time in over two decades.
Governor Hochul emphasized the MTA’s vital role in serving millions of New Yorkers and highlighted the positive impact of budget investments in transit. This improved outlook is expected to bolster investor confidence in the MTA, potentially leading to reduced interest rates on future capital program bonds.
In July, the MTA unveiled a five-year financial plan, projecting balanced budgets through 2027. This achievement stems from a one-time $300 million state subsidy, new dedicated revenue sources, including increased payroll mobility tax, enhanced city funding for paratransit, and additional dedicated taxes in the FY 2024 New York State Budget, coupled with a modest fare and toll increase.
Despite post-COVID ridership challenges, daily ridership has consistently exceeded two-thirds of pre-pandemic levels, reaching 6.5 million daily trips. The credit rating for MTA’s Transportation Revenue Bonds reflects the operating budget’s performance and overall financial health.
Prior to the pandemic, the credit rating faced challenges, including flattening ridership trends and growing debt. Moody’s initially rated it A1 with a negative outlook, downgrading it to A3 with a negative outlook in September 2020. Federal funding provided temporary relief, leading to a stable outlook in April 2021, maintaining the A3 rating.