A Wall Street credit-ratings firm warned of the possibility of an Atlantic City Expressway toll increase as early as 2015 if the road continues to suffer lower traffic volume caused by a downward trend in tourism.

In a newly released report to investors, Fitch Ratings said the expressway may need to raise tolls by 10 percent to 15 percent to maintain current debt-coverage ratios on the bonds issued by its operator, the South Jersey Transportation Authority.

However, the Fitch analysts who wrote the report stressed that a toll increase is only one possibility among a number of options the SJTA could pursue if expressway traffic continues to decline and expenses grow.

"The ability to pull the lever on a toll increase is one of many levers they could pull," Chad Lewis, one analyst, said in an interview Wednesday with The Press of Atlantic City.

Raymond Wu, another analyst, added that SJTA officials have told Fitch "there are no plans to raise tolls."

Sharon Gordon, the SJTA's deputy executive director, declined to comment on Fitch's predictions, saying the authority was not involved with the report.

Fitch's report warned the SJTA could be forced into raising tolls if traffic continues to decrease and there is a corresponding increase in the agency's operating expenses.

"It's not out of the realm that you could have 3 percent declines in the next two years," Lewis said of expressway traffic.

In 2013, expressway traffic fell nearly 2 percent, to 52.1 million vehicles. Toll revenue declined 2 percent in 2013, coming in at $76.1 million. Since peaking at $82.2 million in 2009, expressway toll revenue has declined in three of the past four years. The record-high revenue posted in 2009 followed a toll increase that began in late 2008.

"Traffic levels have been declining in recent years and are currently 22 percent lower than the peak traffic levels in 2008 as a result of the economic downturn, gaming competition from nearby states and Superstorm Sandy," Fitch's report said.

Fitch said severe winter weather has led to a 5 percent decline in expressway traffic in the first two months of 2014, as well as higher operating costs for snow removal.

Lewis noted the SJTA has other options available to avoid a possible toll increase, such as reducing expenses and cutting back on expressway subsidies that support Atlantic City International Airport.

The SJTA owns Atlantic City International and uses expressway toll revenue to offset the airport's operating losses. Last year, the airport subsidy was $4.4 million, according to the Fitch report.

The report concluded that the airport "is a liability of the expressway and can have a direct impact on toll rates."

Another government agency, the Port Authority of New York and New Jersey, took over Atlantic City International's operation from the SJTA last July in hopes of attracting more airline service and boosting the airport's finances.

The Port Authority agreement will look to reduce the airport's operating subsidy and could relieve pressure on the expressway for a possible toll increase, Fitch's report said.

Contact Donald Wittkowski:

609-272-7258