Fitch Ratings gave the Metropolitan Atlanta Rapid Transit Authority (MARTA) an upgrade in its bond credit rating after demonstrating sustained maintenance of liquidity and financial resilience.
Fitch upgraded MARTA’s Issuer Default Rating (IDR) and outstanding sales tax revenue bonds to ‘AA,’ signifying the agency is unlikely to default on its debt repayments.
“As MARTA fortifies its workforce and builds post-pandemic ridership, sales tax revenue remains our dominant revenue source. This excellent rating from Fitch reflects MARTA’s low long-term liability burden and prospects for continued long-term sales tax revenue growth,” MARTA Interim General Manager and CEO Collie Greenwood said.
Fitch based its upgrade on MARTA’s broad and resilient economic resource base and growing service area population, which are expected to support solid revenue growth. The credit rating report states that MARTA’s expenditure flexibility is solid, with firm control over service levels and staffing balanced against moderate fixed costs and a complex collective bargaining environment.
“This rating reflects MARTA’s fiscal responsibility and sound budget management,” MARTA Board of Directors Chair Rita Scott said.
MARTA’s fiscal year 2023 operating budget shows a 5.6 percent increase in net operating expenses over the fiscal 2022 budget to $587.6 million and includes no fare increase. The budget assumes a 4 percent increase in labor costs, uses the remaining $140.4 million in American Rescue Plan (ARP) funds and forecasts a $65 million surplus, or 10.6 percent of net operating expenses.
“Strong sales tax performance, combined with federal aid have enabled MARTA to manage well through the pandemic induced downturn, providing the Authority with ample time to gradually implement planned budget adjustments to cover future potential funding gaps,” MARTA Chief Financial Officer Raj Srinath said.
