The improved forecast the New York Metropolitan Transportation Authority revealed in its November financial plan is a credit positive, said Moody's Investors Service.
Moody's assigns an A2 rating to the MTA's transportation revenue bonds, its primary credit, while Fitch Ratings and Standard & Poor's rate them A.
MTA officials spoke of higher ending balances through 2017 at last week's board of directors meeting. They also proposed reducing the size of biennial fare and toll increases from 2015 and 2017 to 4% from 7.5%.
"The MTA’s forecasts typically show out-year budget gaps and this was still the case with the November forecast. However, the MTA’s $191 million projected deficit for 2017 is a manageable 1.5% of the MTA’s estimated $12.6 billion consolidated operating expenses for that year," Moody's said in a report issued Nov. 18.
The MTA publishes a financial plan three times each year. Board members will vote on its fiscal 2014 budget next month.
"Based on its success in reducing operating costs in recent years, the MTA was able to restrict budget growth to less than 2% in 2014. Continuing to control expenditures will be key to reducing future fare and toll hikes," Moody's added.
