The Metropolitan Transportation Authority (MTA) needs money and is facing a series of “unanswered questions” as its next capital program deadline nears, keeping fare increases on the table, according to a state comptroller’s office report released on Thursday.
The MTA, the state agency that runs the trains and buses in NYC, has to find “billions” in new funds, on top of trying to resolve the $15 billion revenue gap caused by NYS Gov. Kathy Hochul’s congestion pricing pause. The MTA has an extensive list of capital projects that it needs to fund and prioritize including line structures, depots and yards, rail car and bus replacements, and system improvements.
Paying for these projects has proven difficult as the agency lost billions in revenue it had hoped would fund its previous $54.8 billion 2020-2024 capital plan.
Setting priorities for the next capital program is important. Transparency about how and why the projects were chosen is important. Both factors will be key for stakeholders, especially the riders the MTA is trying to win back, NYS Comptroller Thomas DiNapoli said.
“The choices that the MTA and the state make in the coming months will determine the future of the transportation system for years to come,” DiNapoli said. “Understanding the options and what’s at stake is key for all stakeholders and riders in particular. It’s my hope that this report will help underscore the priorities and the challenges the MTA faces in paying for the upcoming capital program.”
And time is of the essence. Per law, the MTA must submit its 2025-2029 capital plan to the state capital program review board by Oct. 1.
John J. McCarthy, policy and external relations chief at the MTA, said the agency plans to have a detailed plan soon.
“We appreciate this serious analysis from the comptroller, and intend to lay out a detailed capital plan this month that will follow the same needs-based approach taken in his report,” he said.
Adding to the MTA’s bill in addition to ongoing capital projects is subway accessibility improvement. Per a court agreement, the MTA has to increase subway accessibility to meet the requirement of the Americans with Disabilities Act for all stations by 2055. This may require any amount from $5.3 to $8.1 billion in the next capital program, depending on the size of investment in NYC Transit projects, the comptroller’s report says.
Fare increases are on the table
DiNapoli’s report lists ways the MTA can choose to get more money and pay off debt. A fare increase is one option.
The report assumes between 13% and 18% of increases in MTA-sourced revenue, primarily fares and tolls, could be used to pay debt service.
And bouts of fare evasion have not helped alleviate the MTA’s funding challenges.
By collecting the estimated $700 million in lost revenue from fare evasion, the agency could generate about $1.5 to $2.1 billion in capital from debt issuance. Doubling fares beyond the 4% increase scheduled for 2025 could add $300 million in revenue, excluding the impact from potential decreases in ridership, increasing the MTA’s bond capacity by $600 to $900 million.
Danny Pearlstein, policy and communications director of the Riders Alliance, said DiNapoli’s report highlights the “mistake” Hochul is making by not implementing congestion pricing.
“Governor Hochul needs to start congestion pricing now to meet riders’ needs and give Albany leaders a clean opportunity to debate major new funding in the budget,” he said. “The comptroller’s report reinforces the magnitude of the governor’s mistake in stopping the program before it began.”
Pearlstein added that halting congestion pricing could result in fare increases and service disruptions.
“If Governor Hochul’s congestion pricing pause extends into 2025, she and the legislature will face impossible choices that will lead to mounting delays, fare hikes and service cuts and threaten a death spiral in the public transit system that makes New York possible,” Pearlstein said.
