New York City-based Fitch Ratings bumped up the Jacksonville Transportation Authority’s bond rating June 30 from AA- to AA and reaffirmed the city agency’s AA- rating on its outstanding lien on the local option gas tax bond.
In its report, Fitch, one of three major U.S. bond rating agencies for governments and corporations, linked the credit upgrade to the new revenue generated when the City Council approved an extension and doubling of the local option gas tax in May 2021.
“The additional fuel tax funding partially mitigates the need for JTA to draw on its reserve balances to address its capital spending program, helping to support a high degree of fundamental financial flexibility through economic cycles. The rating also reflects the authority’s low long-term liability burden, and solid expenditure control balanced against its limited independent legal ability to raise revenues and slow revenue growth prospects,” the report says.
Fitch shows JTA’s long-term financial outlook as stable.
Council increased the gas tax from 6 cents to 12 cents through 2046 and continue at 6 cents through 2052. It will fund nearly $1 billion in road, drainage and other infrastructure projects.
That includes $247 million for JTA’s proposed plan to modernize and extend the Downtown Skyway with automated, nonrail vehicles.
The report also cited JTA’s reserve levels, low pension obligation and staffing levels for the credit increase.
“The positive news is a reflection of the JTA’s sound financial strategy, resiliency during the COVID-19 pandemic, and reputation of responsible stewardship of taxpayer funds,” JTA Vice President and Chief Financial Officer Greg Hayes said in a news release.