(Bloomberg) -- New York’s Metropolitan Transportation Authority, the biggest US mass-transit system, had its credit outlook revised to positive by Moody’s Investors Service after the state directed more tax revenue to the agency.

The change affects $20.6 billion of MTA transportation revenue bonds, which are repaid from a combination of farebox receipts, toll revenue and dedicated tax collections. The positive outlook brings the MTA — which oversees New York City’s subways, buses and commuter rail lines — a step closer to a potential rating upgrade. Moody’s assigns its A3 rating to the MTA’s transportation revenue bonds.

“Despite slow ridership recovery, the MTA has nearly closed its forecasted budget gaps and stabilized its liquidity due to a significant increase in state tax support, a major factor in the outlook revision,” Moody’s analysts Baye Larsen and Nicholas Samuels wrote in a report Tuesday.

Read more: NY MTA Budget Deficits Through 2027 Eliminated by Revenue Boost

State lawmakers earlier this year increased a payroll tax on the largest businesses within New York City to 0.6% to direct more money to the MTA, bringing in $5.1 billion of additional revenue through 2027 from the levy. The state also directed $300 million in a one-time subsidy boost.

“The budget investments we made this year will make transit better for commuters throughout the region, and I’m pleased to see Moody’s recognizing these investments through the improved rating outlook,” Governor Kathy Hochul said in a statement.

The outlook revision will help the MTA as it looks to borrow through capital markets because investors may accept lower interest rates to buy the agency’s transportation revenue debt, Kevin Willens, the MTA’s chief financial officer, said in a telephone interview. The MTA needs to contain its borrowing costs as it pays about $3 billion a year in principal and interest, which takes up nearly 16% of its $19.2 billion operating budget.

“There’s going to be immediate value to us in terms of investors’ perspective on the MTA,” Willens said about the positive outlook.

The MTA had $48.4 billion of outstanding debt, as of Sept. 14, according to MTA documents.

Risks remain even with the additional state help. Ridership could recover slower than expected, an economic downturn would reduce dedicated tax collections or the MTA may fail to implement operating savings of at least $400 million a year.

(Updates with governor’s comment in the fifth paragraph and context throughout.)

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