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Updated September 19, 2023 8:15 p.m.

Rating Outlook Strengthened to Positive Based on Significant Increase in Dedicated State Tax Revenues

First Time in Over 20 Years the Authority Has Projected a Balanced Budget for Five Consecutive Years


Governor Kathy Hochul today announced the Metropolitan Transportation Authority received a strengthened credit rating outlook from Moody’s Investors’ Service, which amended the outlook of its A3 rating for the MTA’s Transportation Revenue Bonds rating to “positive” from “stable.” Moody’s commented that it is making the update based on the significant increase in State tax support secured by Governor Hochul in the latest State Budget, which led the MTA to forecast five years of balanced budgets for the first time in its 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," Governor 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."

MTA Chair and CEO Janno Lieber 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. 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.”

MTA Chief Financial Officer Kevin Willens said, “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. 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.”

The improved credit rating outlook is expected to boost investor confidence in the MTA and could lead to reduced interest rates paid by the MTA on future capital program bonds issued using the Transportation Revenue Credit.

In July, the MTA released its five-year financial plan that projects a balanced budget through 2027, the first time in more than 20 years the Authority has projected a balanced budget for five consecutive years.

A one-time State subsidy of $300 million, new dedicated revenue funding sources, including an increase to the Payroll Mobility Tax, increase of City funding for paratransit, and other dedicated taxes in the FY 2024 New York State Budget, have strengthened the MTA’s financial profile, along with a modest fare and toll increase.

At the same time, the MTA’s post-COVID ridership recovery continues to track along the mid-point of a range predicted by McKinsey in July 2022, with daily ridership now regularly surpassing two thirds of pre-COVID levels or 6.5 million trips on a daily basis.

The credit rating outlook of MTA’s Transportation Revenue Bonds, backed by a diverse basket of revenues including fares and tolls paid by MTA customers and State revenue streams, reflects the performance of the operating budget and is a barometer of the MTA’s overall financial health.

Prior to the COVID-19 pandemic, the credit was rated A1 with a negative outlook, due to concerns about flattening ridership trends, escalating leverage that included growing market access risk, and large debt and capital needs. In April 2020, the credit rating was downgraded to an A2 and again in September 2020 to A3, with a negative outlook.

Following federal funding which provided short-term relief, Moody’s revised the outlook to stableat the same rating A3, in April 2021.