Saturday, 2:15 PM
By Noah Bierman, Globe Staff
As lawmakers debate the state's transportation funding crisis today, the finances of the Massachusetts Turnpike Authority are taking another body blow.
The authority was warned officially this afternoon that its weak credit rating is in danger of getting worse, because its board decided Monday to delay a toll increase.
Fitch Rating placed the authority on "negative watch" for a credit downgrade, citing the political pressures on the authority to delay toll hikes. Fitch had removed the "negative watch" label from the authority last month, after it passed the toll increase that is now being delayed. The authority is drawing from its "rainy day" fund to plug its budget gap.
"The latest reversal is another decision in a long history of resistance to toll increases and further underscores the continued challenges faced by the authority to act decisively and reliably to protect the interests on bondholders and users of the facility," Fitch analysts wrote.
If the bond rating continues to decline, state officials have warned that it could hurt the state's ability to borrow money and ultimately cost taxpayers more money in financing costs. A junk bond rating for the authority could also endanger the savings of bond investors.
Governor Deval Patrick and lawmakers urged the latest toll delay as they work on a broader transportation overhaul. They have given themselves a July 1 deadline to either approve another source of turnpike funding or allow an unpopular toll increase.
Fitch analysts said that if the money does not come by July 1, "more severe negative rating action is likely."