Board approval of fare and toll increases for New York City subways, buses, bridges and tunnels is a credit positive for the Metropolitan Transportation Authority, said Moody's Investors Service.
The increases of roughly 4% over two years will take effect March 22. The authority is scrambling to fund its proposed $32 billion, five-year capital plan amid several megaprojects and high fixed costs. The state's Capital Program Review Board rejected the program without prejudice in October, citing its $15.2 billion shortfall.
A joint meeting of the state Senate committees on transportation, and infrastructure and capital investment, has been scheduled Feb. 2 hearing in Albany to talk about the MTA's operating deficits and cycle of fare increases.
"The increased fares including [those] on the MTA's commuter rail lines, are roughly equivalent to the pay-as-you-go portion of the financing plan," Moody's said in a statement. "Looked at another way, the hike helps support the planned bonding program because the MTA plans to implement another rate increase of similar magnitude in 2017. These rate increases do not provide support for additional bonding beyond the $3.9 billion in the plan."
Moody's declaration of credit positive or credit negative does not connote a rating or outlook change. A spokesman said. It indicates the impact of a distinct event or development as one of many credit factors affecting the issuer.
Moody's assigns an A2 rating to the authority's primary credit, transportation revenue bonds. Standard & Poor's and Fitch Ratings assign AA-minus and A ratings, respectively.
