Skip to Content
Streetsblog New York City home
Streetsblog New York City home
Log In
Transit Funding

Fitch Downgrades MTA Debt — Interest Payments May Eat More of Your Fare

More and more of the MTA's budget, which is growing overall, is going to paying for its debt service every year. Image: RPA/ESTA.

Yesterday, we reported on the MTA's ever-mounting debt load. By 2014, a new analysis from the Regional Plan Association found, debt service could be taking up a full 23 percent of the agency's operating budget.

Already, that debt is starting to catch up with transit riders. As first reported by Transportation Nation's Andrea Bernstein, Fitch, one of the three major ratings agencies, has downgraded the MTA's debt. That could mean higher payments for the same amount of debt, and therefore higher fares down the line. Wrote Fitch in a press release:

The downgrade reflects higher than expected near-to-medium term financial pressure stemming from increasing operating costs (projected to moderate in growth in the outer years) and pension obligations and growing annual debt service obligations from expected near-term issuance associated with the capital program. This is exacerbated by the strong likelihood that operating subsides (dedicated tax sources) will not grow as anticipated in the near term leading to wider deficits.

The MTA downplayed the significance of the downgrade in a statement. "While a downgrade is never welcome news," said an MTA spokesperson, "we believe the strength of the credits remains fundamentally secure. We also believe that the impact of the Fitch rating action is largely priced into the market already and that any pricing impact would be minimal."

We'll have more on the story as the financial implications of the downgrade become clear, but one thing is for certain. The markets are taking the MTA's fiscal situation very seriously. It's time for Albany and Governor Cuomo to do the same.

Stay in touch

Sign up for our free newsletter

More from Streetsblog New York City

The Explainer: What To Know About The MTA’s New Congestion Pricing-Backed Debt

You asked for it, you got it: a 2,000-word explainer on municipal bond sales.

February 5, 2025

Wind in their Sales: Congestion Pricing is No ‘Toll’ on the Broadway Box Office

Despite doom prognostications, congestion pricing has not hurt Broadway's bottom line a bit — and, in fact, may be boasting it.

February 5, 2025

Wednesday’s Headlines: Tin Cup Edition

Road safety wasn't on the agenda for Mayor Adams in Albany on Tuesday. Plus more news.

February 5, 2025

Kirsten Gillibrand Trots Out Bogus FDNY ‘Toxins’ in Quest to Weaken Congestion Pricing

Gillibrand's solution to potential toxins in the subway is more automobile toxins in the air.

February 4, 2025

Memo to Mayor Adams: Reliable Buses Start with You

Congestion pricing’s success and legacy depends on improving bus service. Mayor Adams must act.

February 4, 2025
See all posts