The Metropolitan Transportation Authority operating budget encompasses the recurring revenues and expenses required to manage and maintain New York’s public transit system. This page covers CBC’s work on structural budget gaps, fare and toll evasion, labor productivity and work rules, transit affordability programs like Fair Fares NYC, and the integration of operating costs with capital planning.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
Implement additional operating efficiencies in collaboration with labor by modifying work rules, increasing employee availability, and sharing the benefits of additional operational flexibility and higher productivity to cut costs while supporting competitive wages.
Continue to reduce fare evasion, which is on track to cost more than $900 million this year, by assessing the cost-effectiveness of enforcement efforts, refining the multifaceted approach to reducing fare evasion, accelerating the rollout of new faregates, and working with the District Attorneys to actively pursue and try serial fare evasion cases.
Collaborate with the City to improve uptake, assess the cost-effectiveness, and consider expanding Fair Fares NYC.
Reduce paratransit per-trip expenses by using the paratransit fleet and broker services strategically to ensure users are provided with the lowest-cost transportation option that meets their needs.
Continue biennial fare and toll increases and consider tying them to year-over-year expense growth instead of a flat 4 percent.
Key Data
In May 2026, the CBC noted that transit riders fund 29% of the MTA's operating costs through fares, while bridge and tunnel surpluses fund 5%, and the remaining 66% comes from dedicated taxes and government subsidies.
In December 2025, the CBC reported that while the MTA's financial plan was balanced for 2025 and 2026, it projected out-year gaps of $160 million in 2027, $243 million in 2028, and $306 million in 2029, with an underlying structural gap reaching $1.1 billion by 2029.
In December 2025, the CBC highlighted that operating budget-backed debt service was projected to reach $3.5 billion, or 14.7% of the MTA's $24 billion operating budget by 2029, approaching the agency's 15% benchmark.
In September 2025, the CBC estimated that fare and toll evasion cost the MTA $1 billion in 2024, which included $568 million in unpaid bus fares and $350 million in unpaid subway fares.
In August 2025, the CBC estimated that implementing one-person train operation (OPTO) systemwide could save the MTA $442 million annually, which could be reinvested to close its structural operating budget gap.
$897 million is the MTA's projected budget gap in 2030. While the budget is stable at the moment, future gaps are widening as expense growth outstrips revenues. On the upside, ridership is near pre-pandemic levels, the MTA is investing in its infrastructure and rolling stock to bring the system into…
John (“Janno”) Lieber was confirmed as Chair and CEO of the Metropolitan Transportation Authority (MTA) in January 2022, following his nomination by Gov. Kathy Hochul. Lieber has been serving as MTA Acting Chair and CEO since July 2021 and is the Authority’s 15th Chairperson since it was founded in 1968.…
Expanding the Fair Fares NYC program to 250 percent of the federal poverty level would provide affordable transit to 722,000 additional New Yorkers at a fraction of the cost of making buses fare-free. Rather than eliminating bus fares, which would cost over $900 million annually and potentially slow service, the city should focus on targeted affordability programs and operational improvements to increase bus speeds.
Recommendations related to MTA Operating Budget
Raise the Fair Fares NYC eligibility threshold to 250 percent of the FPL.
Improve low uptake and utilization of Fair Fares NYC through expanded education, outreach, and enrollment strategies.
Leverage proven strategies, such as signal priority and physically separated busways, to make the City's streets more conducive to faster bus traffic.
Work with the MTA to further improve bus speeds.
Key Data
$900 million
— Annual cost to replace the MTA's current bus fare revenues if buses were made fare-free.
$146 million
— Projected annual cost to the City for expanding Fair Fares NYC eligibility to 250 percent of the FPL.
722,000
— Number of additional New Yorkers who would become eligible for Fair Fares NYC under the proposed expansion.
7.0 miles per hour
— Average speed of New York City buses, which is 29.3 percent slower than the national average.
$86 million
— Total cost of the Fair Fares NYC program in fiscal year 2025.
250 percent
— Proposed eligibility threshold for the Fair Fares NYC program relative to the federal poverty level.
New York's public authorities, including the MTA, have lost over $1.2 billion in the last five years due to toll evasion, prompting a push for legislation to strengthen enforcement. The proposed bill, S7905/A8860, would grant authorities new powers to seize vehicles, place liens on property, and classify toll evasion as a 'theft of service' misdemeanor to recover lost revenue.
Recommendations related to MTA Operating Budget
The Legislature should permit law enforcement officers to confiscate fraudulent license plates and devices that obscure license plates when they issue a summons for an obscured or fraudulent plate.
The Legislature should close a loophole that allows drivers with significant unpaid toll balances to re-register their vehicles under the name of a friend or family member and avoid toll payment.
The Legislature should authorize the Department of Motor Vehicles to report repeat toll evaders to their insurers.
The Legislature should allow the MTA to place liens on vehicles whose owners do not pay their tolls.
The Legislature should allow the MTA to place liens on other personal property owned by individuals that do not pay their tolls.
The Legislature should allow the MTA Police Department to execute judgements placed on personal property for unpaid tolls.
The Legislature should authorize the MTA, PANYNJ, NYSTA, and NYSBA to seize vehicles whose owners let tolls go unpaid for 90 or more days at least 3 times within a 5-year period.
The Legislature should classify the act of driving on a tolled facility with the intent to avoid paying tolls as a 'theft of service' misdemeanor.
Key Data
$1.2 billion
— Total amount lost by collecting agencies including the MTA, PANYNJ, NYSTA, and NYSBA in the last 5 years due to toll evasion.
$900 million
— Total amount lost by the MTA due to toll evasion.
$300 million
— Amount lost by the MTA in 2025 alone due to toll evasion.
75,000
— Number of summonses issued by the City-State Ghost Plate Task Force.
7,000
— Number of vehicles towed by the City-State Ghost Plate Task Force.
1,700
— Number of arrests made by the City-State Ghost Plate Task Force.
The MTA should be allowed to implement one-person train operation, an industry standard, to achieve operational efficiencies and ensure financial sustainability as it faces budget gaps. Mandating specific staffing levels by law risks wasting billions in capital investments for signal modernization and hinders the agency's ability to improve service and ridership.
Recommendations related to MTA Operating Budget
Legislators should oppose S9586 and A10706, which would restrict the MTA’s use of one-person train operation.
The MTA should be permitted to follow facts and implement national and international best practices for staffing and technology investments.
Legislators should focus their efforts on forward-looking investments rather than policies that micromanage subway staffing and operations.
Key Data
6%
— Less than 6% of 400 rail lines around the world use two or more train operators.
$5.4 billion
— Amount allocated in the 2025-29 capital program for modernizing subway signals.
$5.0 billion
— Amount allocated in the 2020-24 capital program for modernizing subway signals.
The MTA's November 2025 Financial Plan shows near-term stability but masks a $1.1 billion structural budget gap in 2029 caused by reliance on one-time revenues and optimistic assumptions. To ensure long-term fiscal health, the agency must address rising costs, fare evasion, and paratransit expenses while securing recurring revenue sources.
Recommendations related to MTA Operating Budget
Implement additional operating efficiencies in collaboration with labor by modifying work rules, increasing employee availability, and sharing the benefits of additional operational flexibility and higher productivity to cut costs while supporting competitive wages.
Continue to reduce fare evasion, which is on track to cost more than $900 million this year, by assessing the cost-effectiveness of enforcement efforts, refining the multifaceted approach to reducing fare evasion, accelerating the rollout of new faregates, and working with the District Attorneys to actively pursue and try serial fare evasion cases.
Collaborate with the City to improve uptake, assess the cost-effectiveness, and consider expanding Fair Fares NYC.
Reduce paratransit per-trip expenses by using the paratransit fleet and broker services strategically to ensure users are provided with the lowest-cost transportation option that meets their needs.
Continue biennial fare and toll increases and consider tying them to year-over-year expense growth instead of a flat 4 percent.
Key Data
$1.1 billion
— The MTA's underlying structural budget gap in 2029.
$900 million
— The estimated cost of fare evasion in 2025.
$250 million
— The amount of recurring operating efficiencies the MTA plans to identify per year by 2029.
$150 million
— The estimated cost of each percentage point of wage increases above the 2 percent assumed in the plan.
$325 million
— The amount of revenue the MTA projects would be lost if ridership levels are 5 percent below forecast.
$14.0 billion
— The amount the MTA expects from the federal government to support the 2025-2029 Capital Plan.
New York City's budget is currently strained by chronic underbudgeting for essential services, including transit subsidies, which obscures the true fiscal gap. To restore stability, the city must adopt more accurate expenditure estimates and implement disciplined management to align spending with available revenue.
Recommendations related to MTA Operating Budget
The preliminary budget should reflect the full cost of expected services and activities, including homeless services, rental assistance, uniformed overtime, and MTA subsidies.
Key Data
$284 Million
— The amount of underbudgeting for the <b>MTA subsidy</b> in the fiscal year 2027 budget.
The Metropolitan Transportation Authority faces a structural budget gap exceeding $800 million annually, necessitating the approval of proposed fare and toll increases to maintain reliable service. Addressing this financial shortfall also requires continued efforts to reduce fare evasion, which cost the system $1 billion last year, and the implementation of work rule changes to improve operational productivity.
Recommendations related to MTA Operating Budget
The MTA should approve the proposed fare and toll increases to support ongoing operations and protect riders from unexpected price hikes.
The MTA should promote Fair Fares NYC to assist those who struggle to afford public transit.
The MTA must continue to rein in expenses and collect the revenue it is due.
The MTA should continue efforts to reduce fare evasion to support the operating budget and increase public confidence.
The MTA and labor unions should pursue work rule changes that increase productivity and operational flexibility.
Key Data
$345 million
— Operating budget gap projected for 2027.
$800 million
— Annual structural budget gap, representing the difference between recurring revenues and expenses.
$350 million
— Annual fare and toll revenue expected from the proposed increases.
$1 billion
— Estimated revenue lost to fare and toll evasion last year.
$900 million
— Estimated revenue on track to be lost to fare and toll evasion this year.
$500 million
— Recurring operating efficiencies found by the MTA over the past several years.
Fare and toll evasion cost the Metropolitan Transportation Authority approximately $1 billion in 2024, exacerbating the agency's $800 million structural operating budget gap. To address this, the agency should continue its multi-faceted enforcement approach, accelerate the installation of new faregates, and evaluate the cost-effectiveness of current interventions and the Fair Fares program.
Recommendations related to MTA Operating Budget
Refine and continue a multi-faceted approach to reducing fare and toll evasion, including improving enforcement, educating riders on the importance of fare payment, and better securing the transit system environment.
Accelerate the rollout of new faregates funded in the 2025 to 2029 Capital Plan.
Accelerate the rollout of proof-of-payment to allow EAGLE Team inspectors to enforce fare payment on local and express buses without having to directly witness fare evasion.
Publish comprehensive and regular data on fare and toll evasion, including projected and target fare evasion rates, to allow the public to assess success against goals.
Work with the City to assess the cost-effectiveness of deploying police officers to enforce fare payment.
Work with the City to assess the effectiveness of the Fair Fares Program and consider expansion.
Key Data
$1 billion
— Total cost of fare and toll evasion to the Metropolitan Transportation Authority in 2024.
$800 million
— The MTA's structural operating budget gap that reducing evasion is essential to close.
330
— Number of subway fares evaded every minute during 2024.
710
— Number of bus fares evaded every minute during 2024.
10 percent
— Subway fare evasion rate in the first quarter of 2025, down from 14 percent in the first quarter of 2024.
44 percent
— Bus fare evasion rate in the first quarter of 2025, down from 48 percent in the first quarter of 2024.
The proposed legislation prohibiting one-person train operation would hinder the transit authority's ability to modernize and operate efficiently, potentially costing millions annually. Implementing one-person train operation systemwide could save $442 million each year, which could be reinvested to address the structural operating budget gap or enhance service for riders.
Recommendations related to MTA Operating Budget
The Governor should veto A4873/S4091, which would prohibit the Metropolitan Transportation Authority from using one-person train operation.
The state should allow the MTA to use one-person train operation to improve subway efficiency and service as transit technology is modernized.
State officials should leave operational strategies and decisions to management to ensure the highest quality service at the lowest cost.
State laws should focus on ensuring agencies are high performing and transparent, and that management is held accountable.
Key Data
$442 million
— Estimated annual savings from using one-person train operation systemwide, which could be reinvested to close the structural operating budget gap.
$10 million
— Estimated annual cost of ceasing one-person train operation on the A, G, M, 5, and all shuttle services.
The state budget relies on raising the payroll mobility tax to address the MTA's financing gap, a move that concentrates the burden on large businesses and potentially harms economic competitiveness. Additionally, the plan mandates that the MTA contribute $3 billion in support without providing specific details on how these savings will be achieved through operational efficiencies.
Recommendations related to MTA Operating Budget
Lawmakers should ensure that labor supports the plan by agreeing with MTA leadership to operational changes that reduce costs, increase efficiency, and preserve services.
Key Data
$3 billion
— The amount the MTA is expected to contribute to support the state budget plan, though no specifics have been provided.
The MTA's $68.4 billion 2025-2029 Capital Plan faces a significant funding gap, requiring a balanced approach that includes increased City and State contributions, modest fare and toll hikes, and operational efficiencies. To ensure fiscal stability, the plan must prioritize "Rebuild and Improve" projects while implementing accountability measures and labor savings to support necessary debt.
Recommendations related to MTA Operating Budget
The MTA and the State should focus the Capital Plan exclusively on Rebuild and Improve projects to shrink the funding gap.
The MTA and the State should increase the City and State contribution by $9.0 billion in pay-as-you-go (PAYGO) financing to fund critical investments.
The MTA and the State should modestly increase fares, tolls, and vehicle registration fees to generate revenue to support a $6.8 billion investment.
The MTA should require the MTA to publish project plans, user-friendly capital project status reports, regular updates on each asset group’s state of repair, and a joint study on comparative capital project costs to ensure accountability.
The MTA should ensure labor provides the flexibility to generate at least $500 million in recurring operating budget savings needed to support $8 billion of the planned operating-budget-backed debt.
The MTA should require a study to identify any State or City laws or regulations that increase MTA capital costs.
The MTA should include provisions to catalyze action and provide tools to the District Attorneys, police and the MTA to dramatically turn the tide on fare evasion, which could increase revenue by hundreds of millions of dollars.
Key Data
$68.4 billion
— Size of the 2025-2029 Capital Plan.
$35.4 billion
— Financing gap after the State Fiscal Year 2026 Executive Budget.
$10.0 billion
— Proposed operating-budget-backed debt that the current operating budget cannot support.
$9.0 billion
— Proposed increase in City and State contribution in pay-as-you-go (PAYGO) financing.
$500 million
— Recurring operating budget savings needed from labor to support planned debt.
$8 billion
— Amount of operating-budget-backed debt supported by labor savings.
New York City's fiscal health is deteriorating due to recurring expenses exceeding revenues and a reliance on depleting surplus funds to cover underbudgeted programs. This systemic underbudgeting includes significant shortfalls for essential services, such as $268.0 million in underfunded MTA subsidies, which threatens the city's ability to manage future financial risks.
Key Data
$268.0 million
— Amount of underbudgeting for MTA subsidies in fiscal years 2026 to 2029.
$252 billion is the Governor Kathy Hochul’s New York State Executive Budget for Fiscal Year 2026. How much does it matter that New York State and its localities are already #1 in taxes and #2 in spending nationwide? On today’s episode we talk with New York State’s Budget Director, Blake…
The Metropolitan Transportation Authority's expenditures have risen from $19.1 billion in fiscal year 2020 to $21.7 billion in fiscal year 2024. This financial data reflects the agency's total spending as a component unit within the broader New York State financial landscape.
Key Data
19,109
— FY 2020 expenditures in millions for the Metropolitan Transportation Authority.
18,753
— FY 2021 expenditures in millions for the Metropolitan Transportation Authority.
18,656
— FY 2022 expenditures in millions for the Metropolitan Transportation Authority.
20,343
— FY 2023 expenditures in millions for the Metropolitan Transportation Authority.
21,681
— FY 2024 expenditures in millions for the Metropolitan Transportation Authority.
Congestion pricing is expected to generate significant economic benefits by reducing the $20 billion in annual costs associated with excess traffic congestion. These revenues are essential to addressing the $15 billion shortfall in the current capital budget of the Metropolitan Transportation Authority, while also necessitating efforts to improve efficiency and curb fare evasion.
Recommendations related to MTA Operating Budget
The MTA should identify ways to increase efficiency and adjust MTA priorities to reflect changing demands on the transit system.
The MTA should undertake redoubled efforts to dramatically reduce fare evasion, which has stressed the budget and makes financing capital investment harder.
Policymakers should support the restart of congestion pricing as a critical component of funding for the maintenance and modernization of our regional mass transit system.
Key Data
$20 billion
— Estimated annual costs of excess congestion that could be reduced through more efficient movement of people and goods.
$15 billion
— Shortfall in the current capital budget of the Metropolitan Transportation Authority that congestion pricing revenues will largely close.
The MTA's proposed $69 billion five-year capital plan faces a significant funding gap, exacerbated by the pause on congestion pricing and an unrealistic $90 billion commitment goal. To ensure financial stability and system reliability, the state must prioritize essential repairs over expansion projects while empowering the MTA to address fare evasion and operational inefficiencies.
Recommendations related to MTA Operating Budget
One-third of the funding gap is congestion pricing; it should be unpaused.
The MTA should reduce fare evasion and increase efficiency to stabilize its operating budget and finance debt.
Albany also should trim and hyper-focus the plan.
State leaders should support a tightly focused and smartly financed MTA capital plan and empower the MTA to reduce fare evasion and increase efficiency.
Key Data
$69 billion
— The MTA proposed an ambitious 5-year capital plan focused on improving the system’s state of good repair.
$15 billion
— The funding gap created by pausing congestion pricing.
$90 billion
— The MTA’s 5-year commitment goal for planned projects.
$1 billion
— The MTA's structural budget gap.
90%
— The portion of Penn Station’s electrical equipment, cables and wiring that are in poor and marginal condition.
Karen Keogh serves as Secretary to the Governor of New York, the highest-ranking appointed position in state government. Kathryn Garcia serves as Director of State Operations and Infrastructure, where she oversees over 70 state agencies and authorities, including the MTA and Port Authority.
The Metropolitan Transportation Authority's proposed capital plan is currently too large to be achievable, necessitating a reduction in scope to address the significant funding gap. To ensure financial stability and support necessary infrastructure improvements, the agency must address its structural budget deficit, which is projected to exceed $1 billion by the end of the decade, by reducing fare evasion and increasing labor productivity.
Recommendations related to MTA Operating Budget
The MTA should trim the plan to a more achievable level to reduce the funding gap and transparently present what will happen in the next five years.
The State should unpause congestion pricing; any alternative makes financing these new projects harder.
The MTA must reduce fare evasion, and labor must be a partner to increase productivity; both are essential to stabilize the operating budget and provide the capacity to finance debt.
The funding plan should be sustainable—it should not require a new tax increase every five years.
The funding plan should ensure riders, taxpayers, and drivers across the region pay their share.
Key Data
$8.6 billion
— proposed and previously planned expansion projects that divert resources from essential rebuilding and improvement efforts.
$10 billion
— proposed in new MTA bonds that are not currently affordable.
$1 billion
— the amount the MTA’s structural budget gap will exceed by the end of the decade.
15 percent
— of an operating budget that is not fully funded, which does not make debt affordable.
The Metropolitan Transportation Authority faces a massive capital funding gap, with assets in poor condition requiring a prioritized focus on essential repairs rather than system expansion. To address this, the agency must unpause congestion pricing, limit the capital program to $62.4 billion, and improve operating efficiency to generate necessary savings.
Recommendations related to MTA Operating Budget
The MTA and the State should adopt at most a $62.4 billion 2025-2029 Capital Program to match what can be committed over six years.
The MTA should focus the capital program exclusively on projects to Rebuild and Improve the system, redirecting funds from expansion projects.
The MTA and the State should unpause congestion pricing to avoid reducing the options available to fund projects in the 2025-2029 Capital Program.
The MTA should ensure financing for the 2025-2029 Program is sustainable, utilizing recurring revenue to support capital investment on a pay-as-you-go basis.
The MTA should increase productivity and reduce fare evasion to provide at least $1.5 billion in needed operating budget savings.
Key Data
$1.5 billion
— Needed operating budget savings to be achieved by increasing productivity and reducing fare evasion.
$700 million
— Annual amount of fare evasion, which significantly exceeds this figure.
$2 billion
— Potential annual savings the MTA could achieve by increasing efficiency with collaboration from labor.
$1.5 trillion
— Total value of the Metropolitan Transportation Authority’s capital assets that are currently in dire shape.
$106.6 billion to $115.0 billion
— Estimated five-year cost of the Rebuild and Improve program.
$16.6 billion to $25.0 billion
— The Rebuild and Improve Commitment Capacity Gap for the next Capital Program.
The Governor's pause on congestion pricing has created a $15 billion shortfall in the 2020-2024 capital program and threatens the MTA's long-term financial stability. To address this, the state must end the pause and develop a sustainable 2025-2029 capital plan that prioritizes critical infrastructure repairs and fairly distributes costs among drivers, riders, and taxpayers.
Recommendations related to MTA Operating Budget
The State should say when the congestion pricing pause will end, preferably as soon as possible or by the end of the year, so projects continue smoothly.
The State should release any remaining funds it long ago committed to the MTA’s 2020-2024 capital program.
The MTA should focus on and commit to the most critical projects to rebuild and improve the system as quickly as possible.
The MTA should propose a 2025-2029 capital program that wholly prioritizes the most critical rebuild and improve projects, and is sized to be ambitious but achievable by the end of 2029 if perfectly executed.
The 2025-2029 capital program should include a sustainable, fair financing plan—one that apportions the non-federal share regionally and appropriately across drivers, riders, and taxpayers.
The Board should do everything in its power to implement congestion pricing as soon as possible.
Key Data
$15 billion
— Financing hole opened in the 2020-2024 Capital Program due to the congestion pricing pause.
Fare and toll evasion have become significant fiscal threats to New York's transportation systems, with the Metropolitan Transportation Authority alone losing over $700 million in 2023. To address these growing revenue losses, state officials are proposing stricter enforcement measures, including increased fines, criminalizing certain evasion tactics, and enhanced administrative powers to penalize fraudulent license plate and fare payment practices.
Recommendations related to MTA Operating Budget
The state should increase fines for fare evasion from $100 to $200 to discourage illegal behavior in the transit system.
Lawmakers should make using a tolled road without payment a theft-of-services offense, elevating the infraction from civil to criminal.
The state should strengthen the administrative powers of agencies to enforce the law, including the ability to confiscate plate-obstructing devices and fake fare-payment devices.
The MTA should be granted the power to issue warnings for first-time fare evaders instead of immediate summons.
The state should make it illegal to sell devices that obscure license plates to prevent toll evasion.
Key Data
$700 million
— Estimated cost to the MTA from fare and toll evasion in 2023.
$315 million
— Cost of fare evasion on buses in 2022.
$285 million
— Cost of fare evasion on subways in 2022.
$46 million
— Amount lost by the MTA from license plate fraud in 2022.
$40 million
— Estimated annual uncollected tolls for the Port Authority of New York and New Jersey.
$276 million
— Amount of unpaid tolls and fees the NYS Thruway Authority has struggled to collect.
The New York State Fiscal Year 2025 Executive Budget includes a plan to increase enforcement of fares and tolls on Metropolitan Transportation Authority systems to protect critical revenue streams. These enforcement mechanisms, including increased penalties for fare evasion and toll-obscuring devices, are deemed necessary to sustain transportation operations and capital projects.
Recommendations related to MTA Operating Budget
The State should enact proposed fare and toll enforcement policies because transportation authorities rely on user fees to sustain their operations and pay for capital projects.
New York City's fiscal year 2025 preliminary budget faces a $3.6 billion funding shortfall due to underbudgeted programs and fiscal cliffs, including chronic underfunding of uniformed overtime and required MTA subsidies. To ensure fiscal stability, the City must implement a Program to Eliminate the Gap (PEG) and either fully fund planned programs or transparently shrink or eliminate those that cannot be supported by available resources.
Recommendations related to MTA Operating Budget
The Administration should fully fund underbudgeted and fiscal cliff programs, such as the required MTA subsidies, to the extent resources are available, or explicitly identify which ones will be shrunk or eliminated.
The Administration should further reduce planned spending through a PEG for the Executive Budget to address the $3.6 billion funding shortfall that includes chronic underbudgeting of MTA subsidies.
The City Council should ensure that its proposals for added or modified spending are affordable based on fully funding or reducing the current set of planned programs, including those with chronic underbudgeting like the MTA subsidy.
Key Data
$145 Million
— Required MTA subsidies included in the chronic underbudgeting total.
$800 Million
— Total chronic underbudgeting, which includes $655 million for uniformed overtime and $145 million for required MTA subsidies.
$3.6 Billion
— Total funding shortfall in the fiscal year 2025 preliminary budget needed to maintain current program levels.
The Metropolitan Transportation Authority faces potential operating budget gaps reaching $927 million by 2027 due to revenue uncertainties like casino licensing delays and bus fare evasion, alongside risks from labor costs and unrealized efficiency savings. To maintain fiscal stability, the agency must continue biennial fare and toll increases, improve operational productivity, and consider expanding its general reserve fund.
Recommendations related to MTA Operating Budget
The MTA and stakeholders should closely monitor ongoing results because certain risks threaten its projected revenue and expenses.
Fares and tolls should keep pace with operating budget growth.
It is critical that the MTA continues biennial fare and toll increases, implements efficiencies to meet its savings targets, and continues to identify ways to increase productivity and reduce costs.
The MTA should consider whether the reserve should be gradually increased.
The MTA and stakeholders should closely monitor implementation and fiscal impact of operational efficiency savings.
Key Data
$927 million
— The projected operating budget gap by 2027 if all identified risks materialize.
$89 million
— The estimated risk to revenue from bus fare evasion in 2027.
$500 million
— The revenue generated per casino license assumed in the July 2023 Financial Plan for 2026 and 2027.
$185 million
— The amount contributed to the General Reserve in 2023 from the Mortgage Recording Tax.
$62 million
— The amount by which Payroll Mobility Tax collections were lower than forecasted through September 2023.
New York City's financial plan faces significant pressure from mandated contributions to the MTA operating budget, which are currently underfunded by $150 million annually in the near term and rising to $400 million by fiscal year 2027. These required payments for paratransit, the MTA Bus Company, and the Staten Island Railway represent a growing fiscal challenge that must be addressed to maintain structural budget stability.
Key Data
$150 million
— The amount by which the City's current budget for MTA operating contributions falls short for this year and next.
$400 million
— The projected shortfall in MTA operating contributions by fiscal year 2027.
The Metropolitan Transportation Authority faces significant fiscal risks despite recent stabilization efforts, including potential revenue shortfalls from slower ridership recovery, high fare evasion, and uncertain casino revenues. To ensure long-term financial health, the agency must prioritize capital projects based on needs and available funds while aggressively pursuing operational efficiency savings.
Recommendations related to MTA Operating Budget
Limit exemptions to public and some private transit providers, those specified in the law, and those agreed to in the Final Environmental Assessment.
Do not provide credit for payment of MTA or Port Authority of New York and New Jersey tolls to avoid increasing program complexity and congestion tolls for other travelers.
Vary the congestion charge by time of day and day of the week, and ensure the charge is easily understood and well-communicated.
Consider charging a vehicle-miles travelled (VMT) fee for those that stay inside of the zone to help meet the program’s goals.
Monitor and report congestion pricing outcomes and operational metrics to inform future policy adjustments.
Prioritize projects based on needs and available funds as the MTA’s capital needs will exceed available funding resources.
Key Data
$325 million
— Revenue reduction resulting from a 5-percentage point shortfall in ridership.
$500 million
— Annual fare revenue shortfall resulting from the recent spike in fare evasion.
$100 million
— Annual cost of each additional percentage point increase in employee raises.
$400 million
— Operational savings the MTA assumes it will achieve by 2024.
$1.5 billion
— One-time revenue expected from the awarding of three new downstate casino licenses.
$165 million
— Required increase in New York City's support of paratransit for two years.
The Metropolitan Transportation Authority's operating budget is temporarily balanced due to new state funding, but it faces a recurring structural deficit of $900 million annually after the current financial plan expires. To ensure long-term stability, the agency must implement operational reforms, such as one-person train operations and work rule changes, to align spending with evolving ridership needs.
Recommendations related to MTA Operating Budget
The MTA should implement one-person train operation (OPTO) on subways and proof of payment on commuter rail to increase efficiency.
The MTA should reduce the cost of commuter rail services by verifying fare payment at turnstiles or with proof of payment systems.
The MTA should reduce maintenance and operating costs by targeting peer benchmark levels.
The MTA should negotiate work rule changes with labor unions to allow the MTA to adjust schedules and services to meet shifting rider needs.
Key Data
$900 million
— The estimated annual budget gap the MTA will face beyond the five-year financial plan window.
$2.6 billion
— The MTA's widened budget gap for 2023 due to declining ridership and fare evasion.
$1.6 billion
— The estimated annual savings from meeting benchmark maintenance and operations levels.
$1.1 billion
— The annual revenue generated from the increase of the Payroll Mobility Tax on New York City employers.
$690 million
— The cost of fare and toll evasion to the MTA in 2022.
$442 million
— The annual savings from expanding one-person train operation systemwide.
The Metropolitan Transportation Authority faces a widening budget gap as operating expenses are projected to rise by 3.3 percent annually, necessitating a reevaluation of current fare and toll revenue strategies. To ensure long-term fiscal stability and service quality, the agency must prioritize cost-sharing reforms, reduce fare evasion, and implement productivity improvements within labor agreements.
Recommendations related to MTA Operating Budget
The MTA should revisit the 4 percent yield to see if it is sufficient for ongoing fiscal stability.
The MTA should be held accountable for the quality and reliability of its service, especially given the massive influx of new resources.
The MTA should be supported in reducing fare evasion.
The MTA’s capital efforts should focus on ensuring its equipment and facilities are brought to, and kept in, a state of good repair and appropriately modernized before spending precious resources on expansion.
The MTA and union leadership should implement changes to increase productivity and flexibility, including expanding One-Person Train Operation, increasing worker availability, and modifying shift parameters and job duties.
The MTA should adopt a 50-25-25 cost-sharing model—half from riders, one-quarter from taxpayers, and the balance from motorists—as an economically efficient way to generate revenue.
Key Data
$330 million
— Annual labor costs that will be higher than budgeted by 2026, assuming the tentative Transport Workers Union pattern is adopted system-wide.
3.3 percent
— Projected annual increase in the MTA’s operating expenses from 2023 to 2026.
4 percent
— The historical biennial fare and toll revenue increase percentage that the MTA should revisit for fiscal stability.
32 percent
— The portion of the 2023 budget funded from fares.
57 percent
— The portion of the 2023 budget funded from taxes and subsidies.
11 percent
— The portion of the 2023 budget funded from motorist cross-subsidies.
The Metropolitan Transportation Authority faces significant financial challenges as pandemic-era federal funding expires, necessitating a focus on labor productivity and operational efficiencies to stabilize its budget. Modernizing work rules, such as expanding one-person train operations and transitioning retirees to Medicare Advantage plans, could generate substantial savings while improving service reliability for riders.
Recommendations related to MTA Operating Budget
Transit workers need to return to pre-COVID attendance levels to improve service and cut overtime costs.
The MTA should expand One Person Train Operation (OPTO) to modernize operations and reduce costs.
The MTA and labor need to modernize how transit workers pick the time and location of their shifts using an online system.
The MTA and TWU should switch retirees to a high quality Medicare Advantage plan to save millions without reducing benefits.
The MTA and its labor partners must implement more creative and flexible work assignments and scheduling to improve service and adapt to riders' needs.
Key Data
$1.1 billion
— Increase in the Payroll Mobility Tax on New York City businesses to help narrow future budget gaps.
$165 million
— Increase in city support of paratransit services.
$400 million
— Savings the MTA aims to achieve by increasing its own productivity.
$300 million
— One-time taxpayer infusion provided to the MTA.
19
— Number of days the average annual work attendance for subway and bus workers has shrunk over the last two decades.
50 million
— Number of subway and bus customer trips canceled in 2022 due to crew shortages.
Kathryn Garcia serves as Director of State Operations and Infrastructure, where she oversees over 70 state agencies and authorities, including the MTA and Port Authority. Kathryn has over 14 years of government experience delivering services that New Yorkers rely on every day. Previously, she served as the Commissioner of the…
The enacted state budget's fiscal stability plan for the Metropolitan Transportation Authority is incomplete and flawed, as it disproportionately burdens city businesses and fails to require labor contributions. To ensure an efficient transit system, the state should prioritize implementing productivity improvements, which could yield significant savings, rather than relying on fare increases or tax burdens.
Recommendations related to MTA Operating Budget
The Governor and Legislature should strongly support identifying and implementing productivity improvements during this round of collective bargaining between the MTA and its unions.
No rider or taxpayer should pay more than is required to run an efficient transit system that can flexibly respond to changing rider needs.
Key Data
$2.9 billion
— The amount of potential efficiency improvements identified for the MTA.
1.5 percent
— The proposed fare increase for the missed scheduled 2021 transit increase that was eliminated in the budget.
The delay in reaching a New York State budget agreement threatens to destabilize state finances, as billions of dollars in added unfunded programs could explode the structural budget gap and lead to future service cuts. Elected leaders are urged to craft a sustainable budget that avoids tax increases, maximizes reserve deposits, and stabilizes the MTA while improving its efficiency.
Recommendations related to MTA Operating Budget
The final agreement should stabilize the MTA while improving its efficiency.
The Metropolitan Transportation Authority faces a structural operating budget gap of over $2.5 billion, which requires a multi-pronged approach to stabilize. This strategy should prioritize labor productivity savings, include a recurring state budget contribution, and ensure regional funding is equitably distributed.
Recommendations related to MTA Operating Budget
Ensure at least one-half of any plan to stabilize the Metropolitan Transportation Authority’s operating budget comes from labor productivity, with the remaining from the State budget, and appropriately apportioned regional support.
The State should reallocate the balance of any plan to better consider the costs and benefits of the MTA's commuter rail versus subway systems.
The State should support the MTA’s proposed resumption of biennial fare increases as part of the stabilization plan.
Key Data
$2.5 billion
— Structural operating budget gap faced by the Metropolitan Transportation Authority.
$1.0 billion to $1.5 billion
— Remaining structural operating budget gap after one-time federal aid, fare increases, and efficiency savings.
$2.9 billion
— Potential savings from efficiency improvements previously identified.
$100 million
— Operational efficiency savings in the current year.
$400 million
— Annual operational efficiency savings starting in 2024.
$800 million
— Annual revenue from increasing the Metropolitan Commuter Transportation Mobility Tax (MCTM) top rate.
The Metropolitan Transportation Authority's financial stabilization plan relies too heavily on New York City taxpayers and lacks sufficient labor-related productivity improvements. To ensure long-term fiscal health, the state should contribute recurring funds, reallocate the financial burden across the region, and implement operational reforms that could save up to $2.9 billion annually.
Recommendations related to MTA Operating Budget
Productivity improvements, including changes in MTA operations that require agreement from labor, should constitute at least half of the gap-closing plan.
A recurring State contribution should be included in the stabilization plan, understanding that City taxpayers are major contributors to State receipts.
The balance of the plan should be appropriately allocated among those in the MTA region to avoid placing a disproportionate burden on New York City.
The MTA should resume regular biennial fare increases, including the planned 5.5 percent fare and toll hikes, to maintain price sufficiency and fiscal stability.
Key Data
$800 million
— Annual revenue generated by increasing the Payroll Mobility Tax’s top rate from 0.34 percent to 0.50 percent.
$500 million
— Annual payment required from New York City for certain MTA expenses.
$300 million
— One-time appropriation provided from the State budget.
$2.9 billion
— Potential annual savings identified from operational reforms, such as one-person-train-operation and proof of payment fare collection.
$640 million
— Portion of the $800 million Payroll Mobility Tax increase likely to come from New York City businesses.
5.5 percent
— Planned fare and toll increases supported as part of the biennial adjustment policy.
Stabilizing the Metropolitan Transportation Authority's finances requires a multi-pronged strategy that includes significant savings from management and labor. At least half of the stabilization plan should be derived from productivity improvements, alongside the implementation of planned fare increases.
Recommendations related to MTA Operating Budget
One major prong of the MTA stabilization strategy should be savings from MTA management and labor.
At least half of any stabilization plan should come from productivity improvements that reduce spending, which will require changes agreed to with labor.
The MTA also should follow through on planned fare increases.
The post outlines fiscal priorities for New York State's 2024 budget, emphasizing the need for spending restraint and structural reforms. It specifically calls for addressing the MTA's structural operating deficit through efficiency and productivity improvements, while also suggesting a vehicle miles traveled fee to support transportation infrastructure.
Recommendations related to MTA Operating Budget
Ensure that efficiency and productivity improvements are a significant part of any plan to address the MTA’s structural operating deficit.
Pilot a vehicle miles traveled (VMT) fee to secure reliable funding for the State’s transportation infrastructure.
The Metropolitan Transportation Authority faces a $2.5 billion annual structural operating budget deficit and is seeking $600 million in aid to balance its 2023 budget. Stabilizing the agency's finances should rely significantly more on efficiency savings rather than just new revenue sources.
Recommendations related to MTA Operating Budget
Stabilizing the MTA’s operating budget should rely significantly more on efficiency savings.
Key Data
$2.5 billion
— Annual structural operating budget deficit for the Metropolitan Transportation Authority.
$600 million
— Amount of aid the Metropolitan Transportation Authority is seeking to balance its 2023 budget.
The proposed "Toll Payer Protection Act" would limit the ability of state authorities to collect tolls and penalties, potentially reducing critical revenue needed for transportation infrastructure and transit system operations. By capping penalties and mandating amnesty programs, the legislation threatens the financial stability of agencies like the MTA, which rely on toll receipts to fund their capital and operating budgets.
Recommendations related to MTA Operating Budget
The Governor should veto A3801A/S3587C, the "toll payer protection act," which would limit the ability of State authorities to collect tolls by mail and impose penalties for non-payment.
The State should work to improve collection of user fees on toll roads and bridges in order to support New York’s critically needed infrastructure.
The State should reject the proposed amnesty program for non-payment of legitimate tolls and charges, as it sets a bad precedent and may increase the delinquency rate.
The State should maintain current penalty levels for late payment of tolls rather than capping them, as the proposed caps would lower penalties to the point of insignificance and hamstring enforcement.
Key Data
$2 Billion
— Amount of general State revenue diverted to backfill the Thruway budget and fund capital projects when toll rates were frozen from 2016 to 2020.
83%
— Percentage of tolls on the NYS Thruway that are paid automatically via E-ZPass.
88%
— Percentage of tolls on the PANYNJ crossings that are paid automatically via E-ZPass.
95%
— Percentage of tolls on the MTA Bridge and Tunnel crossings that are paid automatically via E-ZPass.
$5
— Proposed cap on the penalty for non-payment of tolls after 30 days.
$25
— Proposed cap on the penalty for non-payment of tolls after 60 days, which is the greater of this amount or double the unpaid toll.
The Metropolitan Transportation Authority faces a structural operating deficit exceeding $2.5 billion annually, exacerbated by declining ridership and the depletion of federal pandemic aid. To address these fiscal challenges, the agency must implement efficiency-focused operating reforms and restructure its long-term debt while seeking additional state revenue to close remaining budget gaps.
Recommendations related to MTA Operating Budget
The MTA should seize the opportunity and runway created by federal aid to implement efficiency-focused operating reforms and—to the extent possible—restructure its long-term debt.
The MTA should restructure its long-term debt, which would reduce its structural deficit before the region’s critical transit system risks falling off the fiscal cliff.
A multi-year phase-in plan should be adopted, starting with efficiencies under the purview of management, followed by implementing changes collectively bargained with labor over time.
The MTA should implement changes collectively bargained with labor over time to adopt standard industry operating practices.
Key Data
$2.5 billion
— The MTA faces a recurring annual structural deficit of approximately this amount.
$2.0 billion
— Fiscal risks that could approach this amount annually from a recession, collective bargaining costs, and other factors.
63 percent
— Current subway ridership levels relative to pre-pandemic figures.
$7.0 billion
— Amount of American Rescue Plan Act (ARPA) federal stimulus funds the MTA proposed using to cover deficits through 2024.
$800 million
— Amount of additional aid the MTA proposed that the State provide in 2023 to balance the budget.
$1.6 billion
— Amount of additional aid the MTA proposed that the State provide annually beginning in 2024 to balance the budget.
The Metropolitan Transportation Authority faces a structural operating budget deficit of $2.5 billion annually, exacerbated by high costs and a need for over $35 billion in capital repairs. To address these shortfalls without sacrificing service, the system must prioritize efficiency reforms, labor contract adjustments, and the implementation of congestion pricing.
Recommendations related to MTA Operating Budget
The MTA should increase efficiency by adopting operating strategies common to other public transit systems and aligning costs with industry benchmarks.
The MTA's leadership and labor unions should work together to identify and phase in efficiency reforms through changes to labor contracts to narrow the structural gap.
The MTA should implement congestion pricing expeditiously, ensuring revenues are not diverted to narrow the operating budget gap.
The MTA should prioritize the state of good repair before expansion projects to ensure the system functions reliably.
Riders should pay reasonable fares that increase with costs to support the system's future.
Key Data
$2.5 billion
— Recurring annual expenses that exceed revenues, creating a structural operating budget deficit.
$750 million
— The approximate pre-pandemic structural deficit of the MTA.
$35 billion
— Capital investment needed in the next few years to bring tracks, cars, and signals up to a state of good repair.
$100 million
— The size of the MTA's current efficiency plan, which closes only 4% of its budget gap.
44%
— The amount by which the productivity of New York City Transit subway facility maintenance work is lower than the national median.
$25 billion
— The value of planned capital projects that will remain outstanding at the end of 2024 despite recent improvements in delivery speed.
The Metropolitan Transportation Authority faces a significant capital funding shortfall, with at least $12 billion of planned financing at risk or unaffordable due to structural deficits and delays in congestion pricing. To address this, the authority must prioritize projects that maintain safety and reduce costs, while improving capital execution and operational efficiency to ensure the system returns to a state of good repair.
Recommendations related to MTA Operating Budget
Publish a $22.8 billion to $25.4 billion plan that identifies projects that can be committed by 2024.
Prioritize projects that maintain safety, restrain maintenance costs, and reduce capital costs by packaging contracts.
Develop an ambitious and solidly financed 2025-2029 capital program that is based on a published 2023 needs assessment and realistically financed.
Increase the efficiency of operations to help eliminate the structural deficit, possibly creating the capacity to issue debt for capital.
Continue to work with the federal and State governments to implement congestion pricing by 2023 to provide critical revenues.
Continue capital procurement improvements and reform to increase capacity and align unit costs with national and international standards.
Continue to improve capital execution to increase capacity, including Fastrack and partial- or full-line shutdowns to accelerate projects.
Key Data
$52.9 billion
— Amount of projects still uncommitted from the 2020-2024 and two prior five-year capital plans.
$12.0 billion
— Amount of future planned capital financing that is at risk or unaffordable.
$8.2 billion
— The MTA's forecasted annual capital commitments for 2022.
$2.9 billion
— Potential annual savings from operational improvements recommended to reduce operating costs.
$11.5 billion
— Amount of planned spending and borrowing that is unaffordable due to the MTA’s structural deficit.
$500 million
— Amount of capital funding at risk due to weakness in a new dedicated real estate transfer tax.
The Metropolitan Transportation Authority faces an annual structural deficit of at least $2.0 billion, which is currently being covered by federal aid and borrowing through 2025. To stabilize long-term finances and avoid service cuts or tax hikes, the agency must implement operational efficiencies and continue with planned fare increases.
Recommendations related to MTA Operating Budget
The MTA should implement changes that increase the efficiency of its operations.
The MTA should continue planned fare increases, which would be coupled with the City’s increased funding for Fair Fares.
The MTA should pursue initiatives to increase the efficiency of operations, such as facility maintenance improvements or one-person train operation.
The MTA should restructure operations and preserve the fare policy to help stabilize finances for the future.
Key Data
$1.5 billion
— Estimate of dedicated taxes and subsidies increase over five years in the November 2021 Plan.
$2.0 billion
— Annual structural deficit the MTA faces.
$11.9 billion
— Amount of federal aid and borrowing covering the structural deficit from 2021 to 2025.
$1.6 billion
— Amount of selected re-estimates over the plan period.
$321 million
— Amount by which MTA operating expenses ended 2021 below plan.
$2.9 billion
— Amount borrowed from the Municipal Liquidity Facility to support operations.
2026 is the year the MTA will likely have spent all of its one-time COVID-19 federal aid, and when the MTA will have to address the estimated $2.5 billion annual structural operating deficit which that aid is now covering. At an event with CBC Trustees, MTA Chair and CEO Janno…
The Metropolitan Transportation Authority faces a structural operating budget imbalance exceeding $2 billion annually that will emerge once federal aid is exhausted. To ensure future stability, the state should prioritize operational efficiencies, biennial fare and toll increases, and the implementation of congestion pricing to support capital investment.
Recommendations related to MTA Operating Budget
The Governor should vigorously support the MTA to improve the efficiency of its operations, including working with the leaders of its unionized workforce.
The MTA can save up to $2.9 billion annually by increasing subway and bus operations and maintenance productivity, increasing bus speeds, reforming how it deploys conductors, and reducing employee and retiree health spending.
The State should encourage the MTA to continue the practice of increasing fares and tolls biennially to keep up with inflation.
The State should expeditiously implement congestion pricing to generate revenue for the MTA capital plan.
Key Data
$2 billion
— The structural imbalance in the MTA's operating budget that will emerge when federal aid runs out.
$2.9 billion
— The amount the MTA can save annually by increasing operations and maintenance productivity, reforming conductor deployment, and reducing health spending.
$1 billion
— The amount the congestion pricing program is expected to generate in net annual contributions for the MTA capital plan.
$15 billion
— The amount of investment that the $1 billion in annual congestion pricing contributions would support.
The MTA faces a structural annual deficit of at least $2.0 billion, which is currently being managed through federal aid and borrowing. To ensure future stability, the agency must prioritize operational efficiency improvements and proceed with scheduled fare increases while expanding the Fair Fares program.
Recommendations related to MTA Operating Budget
The MTA should use this runway to implement changes that increase the efficiency of its operations.
The MTA should continue planned fare increases (coupled with the City aggressively rolling out Fair Fares).
Key Data
$2.0 billion
— The MTA's structural annual deficit that is currently covered by federal aid and borrowing.
$2.9 billion
— The amount of MLF debt available to support operations through 2025.
$9.8 billion
— The portion of the 2020-2024 capital plan funding that was considered "at risk" during the summer.
$10,623 million
— The total 2021-2025 July Financial Plan baseline deficit.
The Metropolitan Transportation Authority faces a $2.7 billion annual structural deficit that requires immediate implementation of wage freezes, service cuts, and scheduled fare increases to remain solvent through 2026. To achieve long-term fiscal stability, the agency must pursue significant cost-saving reforms, including productivity improvements and health care spending reductions, to avoid drastic fare hikes or service reductions.
Recommendations related to MTA Operating Budget
The MTA must implement a two-year wage freeze starting next year to help cover the structural deficit.
The MTA should implement service cuts starting in 2023 to address the structural imbalance.
The MTA must implement the regularly scheduled 2021 and 2023 fare increases to keep up with the inflation of costs.
The City should undertake robust efforts to promote its Fair Fares program, which provides half-price transit service to lower income residents, to maintain affordability.
The MTA should increase its subway and bus operations and maintenance productivity, which could save $1.6 billion.
The MTA should increase bus speeds, which could save $268 million.
The MTA should reform how it deploys conductors, including one person train operation (OPTO) on subways and fare payment modernization on commuter rail, which could save $512 million.
The MTA should reduce employee and retiree health care spending, which could save $663 million.
The MTA should continue the smart practice of increasing fares and tolls biennially to keep up with inflation.
Key Data
$2.7 billion
— The MTA's long-term annual structural deficit.
$2.9 billion
— The amount the MTA could save annually by 2024 through identified reforms.
$1.6 billion
— Potential savings from increasing subway and bus operations and maintenance productivity.
$268 million
— Potential savings from increasing bus speeds.
$512 million
— Potential savings from reforming conductor deployment and fare payment modernization.
$663 million
— Potential savings from reducing employee and retiree health care spending.
The Metropolitan Transportation Authority faces a long-term structural deficit that may approach $2.5 billion annually once federal pandemic aid is exhausted. To address this, the agency should prioritize operational efficiency and regular fare increases rather than relying on service cuts or tax hikes.
Recommendations related to MTA Operating Budget
The MTA should improve the efficiency of its operations to address the structural budget shortfall.
The MTA should continue its policy of regular biannual fare and toll increases to help adequately and appropriately fund its operations.
The City should continue to implement and ensure full uptake of Fair Fares as a key companion policy to assist low-income riders.
The MTA should expedite the implementation of congestion pricing as it remains urgently needed.
The MTA should focus its capital investment on the highest priority state of good repair and normal replacement work and make project schedules and costs publicly available.
Key Data
$8.0 billion
— Cumulative cash shortfall through 2024 forecasted in the February 2021 Financial Plan.
$6.5 billion
— Additional federal aid delivered by the American Rescue Plan.
$2.5 billion
— Long-term structural deficit the MTA may face annually.
$443 million
— Amount by which actual fare revenues were higher than planned through May 2021.
$323 million
— Amount by which toll revenues were higher than planned.
$383 million
— Amount by which dedicated taxes and subsidies were higher than planned.
The Metropolitan Transportation Authority faces a long-term structural fiscal imbalance that requires significant operational reforms to achieve sustainability. By improving productivity in maintenance, bus operations, conductor staffing, and health care benefits, the agency could save up to $2.9 billion annually by 2024 and reduce its workforce by nearly 13,000 positions.
Recommendations related to MTA Operating Budget
Increasing the MTA’s productivity to the median productivity of its national peer group would save nearly $1.9 billion annually, without reducing individuals’ compensation.
A 15 percent increase in NYCT bus speeds from the pre-pandemic baseline would be a meaningful improvement and offset the speed losses from rising vehicle congestion over the last 30 years.
A system wide adoption of OPTO would reduce the need for train conductors and bring agency operations in line with its national peer systems.
Implementing proof-of-payment would allow MNR to reduce its conductor workforce by roughly 573, half the 2019 conductor payroll, yielding annual savings of $138 million by 2024.
If retired MTA retirees contributed to their health care premiums at the rate of retired State workers, the MTA would save $263 million annually by 2024.
Key Data
$2.9 billion
— Total annual savings from proposed operations reforms by 2024.
13,000
— Total workforce reduction by 2024 resulting from proposed reforms.
$2.4 billion
— Projected MTA cash shortfall in 2024.
$981 million
— Annual savings by 2024 from subway facility maintenance improvements.
$263 million
— Annual savings by 2024 from requiring MTA retirees to contribute to health care premiums.
$138 million
— Annual savings by 2024 from implementing proof-of-payment on Metro-North Railroad.
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
24/7 is the number of hours and days New Yorkers traditionally have had access to the subway system. In response to the pandemic the MTA suspended overnight service to clean and disinfect the subway, giving riders the confidence they need to return to the system. The pandemic decimated revenue and…
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
The Metropolitan Transportation Authority faces significant long-term financial instability, requiring careful examination of revenue projections, federal aid utilization, and service adjustments in its upcoming financial plan update. While recent federal support and better-than-expected revenues provide temporary relief, the agency must prioritize essential capital repairs and implement sustainable, long-term fiscal strategies rather than relying on short-term fixes.
Recommendations related to MTA Operating Budget
The MTA should not substantially change its policy of regular fare and toll increases to keep them constant over time.
Implementing and ensuring full uptake of Fair Fares is a key companion to regular fare increases in order to assist low-income riders.
Further service 'right-sizing' tailored to the reduction and resumption of economic activity and commuting are appropriate.
It will be critical for the MTA to focus its investment on the highest priority state of good repair and critical system replacement work.
Maximization of fare revenue requires a new, re-targeted fare structure modeled on other systems with high farebox recovery that price discriminate by trip type and time of day.
Key Data
$7.9 billion
— The forecasted three-year, 2022 to 2024 cash shortfall.
$1 billion
— The annual net revenue from congestion pricing that 30 percent of the 2020-2024 capital plan relies on.
$8.8 billion
— The amount reportedly directed to transit providers in the NYC area from the next federal relief bill.
$1.5 billion
— The amount of cash the MTA reported having more than expected at the end of 2020.
$379 million
— The previously itemized annual expenditures for COVID cleaning.
$220 million
— The amount the MTA budgeted for FEMA reimbursement in 2021 in its November and December plans.
The state's lack of transparency regarding withheld funds and advanced payments makes it difficult to assess the impact on agencies like the Metropolitan Transportation Authority, which faces cash shortfalls exceeding $10 billion over the next four years. Watchdog groups are calling for the Division of the Budget to publish timely, detailed, and monthly reports on these financial adjustments to ensure accountability and prevent de facto budget cuts.
Recommendations related to MTA Operating Budget
The Division of the Budget should publish on its website timely and complete information about funds that have been withheld or advanced as part of the state budget adjustment process, ideally monthly and broken out by agency and major program.
Key Data
$10 billion
— Cash shortfalls the Metropolitan Transportation Authority (MTA) is struggling to survive over the next 4 years.
$2.4 billion
— Withholdings through September in ten broad categories, which are not broken down by agency or individual program.
$1.5 billion
— Advanced payments announced at Governor Cuomo’s December 16 press conference.
less than $500 million
— Subset of withholdings through August that were included in the Division of the Budget’s legally required notification to the Legislature.
3,000
— Layoffs of adjunct professors at the City University of New York (CUNY) resulting from the lack of payment.
1,800
— Nonprofit social service providers reportedly at risk of closure.
The Metropolitan Transportation Authority faces a $15.9 billion budget gap through 2024, necessitating a combination of service cuts, efficiency improvements, and potential borrowing. To address this fiscal crisis, the agency must prioritize operational efficiencies, such as aligning bus and subway maintenance with other systems, while treating debt conversion as a last resort.
Recommendations related to MTA Operating Budget
The MTA should focus on improving the system’s operating efficiency to mitigate the need for drastic service cuts and layoffs.
The MTA should consider equalizing employee and retiree health benefit contributions to those of State employees to generate $200 million in annual savings.
The decision to convert Municipal Liquidity Facility debt to long-term debt should only be made after increasing efficiency, adjusting service levels, and determining the amount of federal aid received.
The MTA should continue to recalibrate service levels to match depressed ridership as the pandemic continues and ridership rebounds.
Key Data
$15.9 billion
— Total budget gaps facing the MTA between 2020 and 2024.
$4.5 billion
— Amount of gap-closing initiatives the MTA has begun implementing.
$1 billion
— Potential savings from bringing bus operations and subway maintenance efficiency in line with other large systems.
$200 million
— Potential annual savings from equalizing employee and retiree health benefit contributions to those of State employees.
$2.9 billion
— Amount the MTA will borrow through the Federal Reserve’s Municipal Liquidity Facility to balance the budget.
4 percent
— The scheduled biennial fare and toll increases.
The Metropolitan Transportation Authority faces a cumulative $16.2 billion budget gap through 2024 driven by pandemic-related ridership declines and revenue shortfalls. To address this fiscal crisis, the agency must implement operational efficiencies, reduce personnel costs, and adjust service levels to match current ridership patterns.
Recommendations related to MTA Operating Budget
The MTA should work with the labor force to implement additional savings by increasing the efficiency of operations, and reducing overtime and employee benefits costs.
The MTA should forego new headcount, as the financial plan includes an increase in fiscal year 2021 of 776 positions and an increased personnel cost of $250 million that is not affordable at this time.
The MTA should rescope the capital program to focus on the projects that will preserve the system’s state of good repair and reduce future maintenance expenses.
The MTA should optimize service to match ridership patterns, which may include changing the frequency of service and adjusting service on overlapping routes for buses, subways, and the commuter rail network.
The MTA should consider increasing tolls by a greater percentage than the currently planned 4 percent increase in 2021 as toll traffic has returned at a faster rate than ridership.
Key Data
$16.2 billion
— Cumulative budget gap for the MTA from 2020 through 2024.
$5.1 billion
— Anticipated shortfall in fare and toll revenue in 2020.
$1.6 billion
— Anticipated shortfall in MTA tax revenues in 2020.
$250 million
— Increased personnel cost associated with adding 776 positions in fiscal year 2021.
$567 million
— Estimated cost of new COVID-related cleaning in 2020.
4 percent
— Currently planned increase for tolls in 2021.
New York State faces a $58 billion budget gap over the next four years, exacerbated by the pandemic and a reliance on fiscal maneuvers that obscured spending growth. To address this, the state must implement a transparent plan to balance the budget through measures like reducing school aid to wealthy districts and eliminating unproductive economic development spending, rather than relying on accounting shifts.
Key Data
$1,356 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2019.
$1,837 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2020.
$1,906 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2021.
$1,984 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2022.
$2,066 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2023.
$2,151 Million
— MTA Payroll Taxes (off-budget) in fiscal year 2024.
The Metropolitan Transportation Authority faces a severe fiscal crisis with operating budget shortfalls between $8.4 billion and $12.6 billion for 2020 and 2021, necessitating a combination of efficiency improvements, capital project prioritization, and potential fare and toll adjustments. To manage these deficits, the authority must balance service levels with ridership demand while considering borrowing as a last resort to sustain vital operations.
Recommendations related to MTA Operating Budget
The MTA should pursue greater efficiencies to lower operating expenses, which in large part requires working collaboratively with labor unions.
The MTA should prioritize planned capital investments to lower debt service costs, including postponing expansions and possibly slowing accessibility improvements.
The MTA should optimize service levels by continually adjusting capacity to current demand and safety requirements.
The MTA should revise fare and toll policies to seek more revenue from fares and to raise tolls proportionally more than fares.
The MTA should borrow for operating expenses only as a last resort to sustain vital services during the crisis period.
Key Data
$8.4 billion and $12.6 billion
— The estimated operating budget shortfall for 2020 and 2021.
$64 billion
— The total capital commitments planned for the next five years.
$3.9 billion
— The amount of additional federal aid requested by the MTA for 2020.
$4.5 billion to $8.7 billion
— The projected 2020-2021 cumulative operating budget deficit assuming $3.9 billion in new federal aid is authorized.
$7.9 billion
— The combined cost of the Second Avenue Subway Phase 2 and Penn Station Access projects.
$6 billion
— The cost of projects intended to expand and accelerate the accessibility of subway and commuter rail stations.
Proposed changes to the Metropolitan Transportation Authority's procurement process, including shortening the bid solicitation period from 15 to 5 business days and limiting bid advertisements to the agency's website, would reduce competition and transparency. Additionally, a proposal to allow the MTA board to determine the process for awarding technology contracts up to $5 million warrants further scrutiny to ensure fiscal responsibility.
Recommendations related to MTA Operating Budget
Lawmakers should reject the proposal to allow the MTA to award contracts after a five-day bid solicitation period, as this will decrease competition.
The state should reject the proposal to limit bid advertisements to the MTA's website, as this will decrease competition.
The proposal permitting the award of contracts of up to $5 million for “innovative” technology projects pursuant to a process to be determined by the MTA board deserves further scrutiny.
Key Data
5
— The proposed number of days for the MTA bid solicitation period, which is a reduction from the current requirement.
15
— The current number of business days required for the MTA bid solicitation period.
$5 million
— The value of contracts for 'innovative' technology projects that the MTA board would be permitted to award under a new process.
New York City taxpayers provide 71 percent of the Metropolitan Transportation Authority's non-fare and non-federal revenue, demonstrating that the city already funds the majority of the system's subsidies. These contributions are expected to grow as new revenue sources, such as for-hire vehicle surcharges and central business district tolls, are implemented.
Key Data
71 percent
— NYC taxpayers' share of the MTA's non-fare and toll, non-federal revenue.
$1.7 billion
— 2018 City budget contribution to the MTA.
$1.1 billion
— 2018 direct operating contributions from the City.
$5.5 billion
— 2018 State-authorized taxes allocated to the MTA.
$3.4 billion
— NYC contribution to regional taxes.
$439 million
— NYC contribution to statewide revenues dedicated to the MTA.
The new TWU labor contract increases compensation costs by over $1 billion through 2023, adding $16.5 million to the MTA's four-year budget gaps. While the agreement includes potential savings, these rely on uncertain behavioral changes, necessitating the implementation of productivity targets and workrule changes to ensure fiscal accountability.
Recommendations related to MTA Operating Budget
To keep the financial plan impact neutral, the agreements should include greater savings, including workrule changes, to offset the impact of these increased costs.
The labor-management productivity committees established in the TWU contract should establish productivity targets and provide public quarterly reports on savings to ensure accountability.
Similar committees should be established with other unions if workrule changes are not directly negotiated in the other collective bargaining agreements.
Key Data
$1 billion
— Compounded 9.8 percent wage increases will cost more than $1 billion through 2023.
$16.5 million
— The net costs of the agreement will add $16.5 million to the MTA’s four-year budget gaps.
$11.7 million
— If the MTA negotiates similar agreements with its other bargaining units, it will cost $11.7 million more than budgeted in the financial plan.
$44 million
— The MTA estimates health and worker availability savings total $44 million annually.
$64 million
— The agreement’s non-wage benefits will cost at least $64 million over four years.
$129 million
— The wage increases will cost $129 million more than included in the MTA’s November 2020-2023 Financial Plan.
The Access-A-Ride program, which provides paratransit services, faces significant cost growth due to increased utilization, with total operating costs projected to rise from $537 million in 2018 to $691 million by 2023. To address these financial pressures, the Metropolitan Transportation Authority and the City must determine a sustainable cost-sharing model that balances service efficiency with the need for fiscal stability.
Recommendations related to MTA Operating Budget
The MTA should ask passengers to pay a greater share of the cost for the enhanced service of the for-hire vehicle origin to destination trips.
The MTA should constrain costs by limiting the number of on-demand for-hire vehicle trips a passenger may take.
The City should work with the MTA to assure that Access-A-Ride will achieve firm financial footing while providing a cost-effective and efficient service that offers greater mobility to disabled riders.
Key Data
$691 million
— Projected total operating costs for the Access-A-Ride program in 2023.
$361 million
— Cumulative cost increase to the City from 2020 to 2023 under the MTA's proposed formula change.
$86
— 2018 per trip cost for the primary van service.
$29
— 2018 per trip cost for an advance reservation trip.
$37
— 2018 per trip cost for an on-demand trip.
4 percent
— Fare revenue as a percentage of the program's total operating cost.
The Metropolitan Transportation Authority faces a cumulative cash shortfall of $637 million by 2023, a figure that relies on optimistic assumptions regarding economic growth and labor negotiations. To address these fiscal challenges, the agency must aggressively implement its transformation plans and secure a labor settlement that achieves a net-zero impact on the bottom line through productivity gains.
Recommendations related to MTA Operating Budget
The MTA must move forward aggressively with the Transformation and Budget Reduction Plans to improve the efficiency and effectiveness of operations.
It is critical that the MTA negotiate a labor settlement focused on increased productivity with the Transport Workers Union.
Any raises negotiated in the settlement should be offset by savings from productivity gains and in health and welfare benefit costs so that there is a “net zero” impact on the MTA’s bottom line.
Key Data
$637 million
— Cumulative cash shortfall projected for the MTA by 2023.
$740 million
— Previous July forecast for the MTA's cumulative cash shortfall.
$361 million
— Expected savings from renegotiating paratransit agreements with New York City.
$451 million
— Reduction in projected savings for the Budget Reduction and Transformation Plans.
$200 million
— Revenue target expected from reducing fare evasion.
$144 million
— Decrease in Payroll Mobility Tax collections.
The Metropolitan Transportation Authority's ambitious $54.8 billion 2020-2024 Capital Program faces significant implementation challenges, including a $70 billion project backlog and a lack of transparent, year-by-year scheduling. Furthermore, the plan's reliance on bonding against new revenue streams threatens to exacerbate the agency's existing $1 billion operating budget shortfall and increase debt service costs to 18.6 percent of operating spending by 2023.
Recommendations related to MTA Operating Budget
The MTA should prioritize the most impactful projects and initiate those as soon as practicable.
The MTA should allocate its human and financial resources to the highest priority projects, and its capital plan documents should reflect these priorities by including, at minimum, the year in which the MTA plans to commit and complete each project.
The MTA should provide the detail needed and present a five-year plan for investment so the MTA Board, oversight bodies, and the public can assess whether it is appropriate and hold the MTA accountable for implementation.
The MTA and other public officials must ensure that exemptions and credits to the central business district tolling charge are limited, so that the revenue promised is available to support the plan.
Rather than using this volatile revenue source to support debt, the MTA should consider real estate transfer taxes a source for pay-as-you-go capital projects.
Key Data
$1 billion
— Cash shortfall in the operating budget over four years
18.6 percent
— Forecasted debt service as a percentage of operating spending by 2023
$54.8 billion
— Total value of the proposed 2020-2024 Capital Program
$70 billion
— Total value of projects planned, including the $54.8 billion program and $15 billion in previously approved projects
$6 billion
— Average annual capital project commitment rate from 2010 to 2018
$14 billion
— Required annual commitment rate to execute both the new capital plan and the backlog of projects in five years
The Metropolitan Transportation Authority faces significant financial constraints and a projected operating deficit that will be exacerbated by the hiring of 581 new police officers. Without identifying new funding sources or cost savings, this expenditure threatens the agency's ability to maintain current transit service levels.
Recommendations related to MTA Operating Budget
The MTA Board needs to know exactly how the MTA will find the funds to pay for 581 new officers without increasing the operating deficit before authorizing their hiring.
The MTA should work with the NYPD and its own officers to establish clear goals and expectations and maximize the effectiveness of existing policing before spending scarce transit operating dollars.
Key Data
$260 million
— The cost of the new officers over the 2020-2023 financial plan.
$740 million to $1 billion
— The range of the MTA's projected operating budget deficit after accounting for the new officers.
$56.1 million
— The cost of the new police force in the first year.
$119.9 million
— The cost of the new police force in the tenth year.
$40 million
— The amount the Manhattan DA announced it would give the MTA over four years to reduce fare evasion.
2,500
— The number of NYPD officers currently assigned to patrol subway and buses.
The hiring of 500 new police officers and 81 supervisors by the Metropolitan Transportation Authority will cost over $260 million through the 2020-2023 financial plan. This expenditure contributes to a $1 billion operating budget gap, highlighting the significant fiscal strain of expanding the transit police force.
Key Data
$1 billion
— projected operating budget gap over the next four years resulting from the hiring strategy and existing financial plan deficits
$260 million
— cost of the 581 officers and supervisors over the 2020-2023 financial plan
$93,000
— annual total cost for one officer in the first year, including salary, overtime, benefits, and pensions
$56.1 million
— annual costs of the hiring strategy in the first year
$119.9 million
— annual costs of the hiring strategy in the tenth year
$40 million
— grant from the Manhattan District Attorney to the MTA to help offset added costs
The Metropolitan Transportation Authority's 2020 Preliminary Budget and 2020-2023 Financial Plan projects cumulative cash deficits reaching $740 million by 2023. These financial gaps could widen further if anticipated savings from the Budget Reduction Program and the Transformation Plan fail to materialize.
Key Data
$740 million
— Cumulative cash deficit projected by 2023 in the MTA 2020 Preliminary Budget and 2020-2023 Financial Plan.
CBC Vice President Maria Doulis says MTA managers, riders, and drivers will all be making sacrifices through job cuts, fare hikes, and congestion pricing, so it’s only fair labor contributes as well: “The MTA’s demands reflect the fact that more needs to be done with the workforce in order to…
The Metropolitan Transportation Authority's 2020 financial plan projects a cumulative deficit of $740 million by 2023, relying on optimistic assumptions regarding transformation savings, budget reductions, and continued economic growth. To stabilize finances, the authority must address implementation challenges for its savings programs, pursue zero-cost wage settlements, and prepare for potential economic downturns.
Recommendations related to MTA Operating Budget
MTA leaders should focus on developing and detailing the Transformation Plan by realistically assessing its savings potential and pursuing the changes on which it depends.
The authority should prioritize specifying the elements of the Budget Reduction Program and integrating them with the Transformation Plan without causing a negative impact on service.
MTA leadership should pursue zero-cost wage settlements in current collective bargaining negotiations.
The authority should prioritize monitoring economic developments to adjust as needed to potential downturns.
Key Data
$740 million
— The cumulative deficit projected for the MTA in 2023.
$538 million
— The annual savings the financial plan counts on from the Transformation Plan in 2023.
$376 million
— The savings from the Budget Reduction Program projected for 2023.
$1.7 billion
— The estimated loss of revenue across a four-year financial plan if a recession similar to the average of three previous recessions occurs.
$230 million
— The annual savings the financial plan counts on from the Transformation Plan in 2020.
$101 million
— The savings from the Budget Reduction Program projected for 2019.
The Metropolitan Transportation Authority's 2019 operating expenses and debt service totaled $17b, with the largest portion allocated to the New York City Transit and Staten Island Railway. Future capital plans face significant funding questions, while congestion pricing is expected to support $15 billion of the 2020-2024 capital program.
Key Data
$17b
— Total 2019 operating expense and debt service for the Metropolitan Transportation Authority.
$15 billion
— Amount of funding that congestion pricing tolls must support for the 2020-2024 capital program.
$33,270 million
— Total cost of the 2015-2019 capital plan.
The Metropolitan Transportation Authority faces a dire fiscal outlook with projected annual cash deficits reaching $976 million by 2022, necessitating a strategy to control operating costs through labor reform. To achieve a viable fiscal future, the authority should pursue collective bargaining agreements that freeze total labor costs, increase employee contributions to fringe benefits, and implement productivity improvements.
Recommendations related to MTA Operating Budget
The MTA should revise its financial plan assumption of 2 percent annual wage increases and instead condition any pay increases on generating offsetting savings.
The authority should increase employee health care contributions for represented workers to levels similar to the non-represented workforce.
The MTA should apply retiree health benefit contribution shares similar to those of other State retirees to its own retirees to generate significant savings.
The state should pass legislation to increase new member pension contribution rates or change benefit calculations to reduce long-term costs.
Management and labor should set productivity goals and collaboratively develop an agenda of collective bargaining changes, such as incentives for maintenance shops and more flexible scheduling.
Key Data
$976 million
— Projected annual cash deficit for the MTA in 2022.
$2.3 billion
— Cumulative cash shortfall projected for the MTA in 2022.
$10 billion
— Expected 2019 labor costs, representing nearly three-fifths of the MTA’s operating budget.
$496 million
— Potential annual savings from increasing subway maintenance productivity to the median for selected U.S. systems.
$444 million
— Potential annual savings if MTA bus productivity matched the median of selected U.S. systems.
$86 million
— Potential savings if the Long Island Rail Road matched the total productivity of Metro-North.
The Metropolitan Transportation Authority's financial needs should be addressed through congestion pricing, spending restraint, and operational efficiencies rather than by dedicating revenue from a proposed pied-à-terre tax. The agency should prioritize state of good repair projects and source any necessary additional revenue from broad-based taxes rather than dedicated revenue streams.
Recommendations related to MTA Operating Budget
It is crucial for the Legislature to pass congestion pricing in order to raise revenue, decrease congestion, and improve service.
Additional spending restraint and operational efficiency, including renegotiation of the Transit Workers United (TWU) labor contract, are critical parts of the solution.
The capital program should be more focused on state of good repair needs and capital projects executed with greater efficiency.
Any additional revenue needed after these operational and capital reforms should come from motorists and broad-based taxes.
Revenues should not be dedicated, but rather allocated through the budget process.
The 10-Point Plan to fund the Metropolitan Transportation Authority introduces congestion pricing and regular fare increases while emphasizing the necessity of labor productivity and cost containment. New revenue streams from internet sales and marijuana taxes should be integrated into the standard budget process rather than statutorily earmarked, and the role of the Regional Transportation Committee must be clarified to prevent delays in capital and fare approvals.
Recommendations related to MTA Operating Budget
The MTA must ensure the participation of labor and increased productivity by all segments of the workforce to support cost containment and management improvement.
New revenue sources, such as internet sales taxes and marijuana excise taxes, should be allocated in the budget process rather than 'earmarked' in statute.
The state must provide clarification on the Regional Transportation Committee’s role in reviewing the capital program and toll and fare increases.
The Regional Transportation Committee must be structured so that it does not become an obstacle to timely approval of the capital program or fare increases.
The Metropolitan Transportation Authority's 2019 operating expense and debt service totaled $17 billion, with the vast majority of these funds allocated to subway and bus operations. This spending supports a transit system that has faced declining on-time performance and fluctuating ridership levels over the preceding decade.
Key Data
$17 billion
— Total 2019 operating expense and debt service for the Metropolitan Transportation Authority.
$11,259 million
— Operating expense and debt service allocated to Subway & Buses in 2019.
$2,239 million
— Operating expense and debt service allocated to the Long Island Rail Road in 2019.
$1,629 million
— Operating expense and debt service allocated to the Metro-North Railroad in 2019.
$875 million
— Operating expense and debt service allocated to Bridges & Tunnels in 2019.
$748 million
— Operating expense and debt service allocated to MTA Headquarters in 2019.
The Metropolitan Transportation Authority requires regular fare and toll increases to maintain fiscal health and fund service improvements, as current fares cover less than half of operating costs. Without these adjustments, the transit system faces significant budget cuts and growing deficits that threaten the $40 billion Fast Forward modernization program.
Recommendations related to MTA Operating Budget
The MTA board should ensure both that the authority is adequately funded and that management is pursuing — and achieving — adequate standards of service.
The MTA board must approve this planned fare and toll increase since without it, New Yorkers risk more performance declines and a return to a fare policy often characterized by larger, sporadic and politically fraught jolts.
A renewed board effort for stricter oversight of MTA performance could benefit the system and its users.
The MTA must be leaner and must right-size service as it restores the transit system from the depths of its state of emergency.
Key Data
44%
— Share of the cost to run the transit system covered by rider fares.
$1.93
— Average cost paid per trip by most riders due to discounts and unlimited passes.
$250 million
— Amount the MTA would have to cut from its 2019 budget without revenue from fare and toll increases.
$1 billion
— Projected cash deficit for the MTA by 2022.
$40 billion
— Total cost of the 10-year Fast Forward program to restore and modernize the transit system.
The Metropolitan Transportation Authority faces growing financial pressure as overall expense growth of 10.4 percent outpaces revenue growth, leading to projected cash deficits reaching $634 million by 2022. While a new revenue stream from the New York City Transit Assistance Fund provides $385 million annually, declining ridership and the costs of agency action plans necessitate significant fare and toll increases to mitigate these widening budget gaps.
Key Data
$634 million
— Forecasted cash deficit for the MTA in 2022.
$385 million
— Annual revenue expected from the New York City Transit Assistance Fund.
$836 million
— Cost of the Subway Action Plan included in the MTA's additional expenses.
$376 million
— Amount cut from the four-year financial plan due to declining fare revenue estimates.
$550 million
— Reduction in fare revenue estimates over the 2018 to 2021 period.
$262 million
— Forecasted cash deficit for the MTA in 2020.
$17 billion is the preliminary budget for the Metropolitan Transportation Authority in 2019, an increase of 2.1% from 2018. CBC's Director of Infrastructure Studies Jamison Dague breaks down the preliminary budget and discusses looming risks, such as subway car reliability and progress of the various "action plans" put in place…
The New York State Fiscal Year 2019 Enacted Budget requires the City of New York to fund half of the $836 million Metropolitan Transportation Authority (MTA) Subway Action Plan, totaling $418 million. This mandate forces the City to allocate $254 million in operating spending and $164 million in capital spending toward the plan.
Key Data
$836 million
— Total cost of the Metropolitan Transportation Authority (MTA) Subway Action Plan (SAP) that the City is required to fund half of.
$418 million
— The amount the City is required to fund for the Metropolitan Transportation Authority (MTA) Subway Action Plan.
$254 million
— The amount of operating spending the City will need to fund for the Metropolitan Transportation Authority (MTA) Subway Action Plan.
$164 million
— The amount of capital spending the City will need to fund for the Metropolitan Transportation Authority (MTA) Subway Action Plan.
The Long Island Rail Road (LIRR) operates less efficiently than the Metro-North Railroad, with higher operating expenses per hour, mile, and ride, largely driven by legacy costs and labor inefficiencies. To improve the financial health of the commuter railroads, management must prioritize productivity reforms and work rule standardization in future collective bargaining agreements.
Recommendations related to MTA Operating Budget
The MTA should standardize work rules across the two railroads to help generate savings.
MTA management should begin identifying its agenda for improved productivity ahead of upcoming collective bargaining rounds.
The MTA should seek to achieve further employee contributions to benefits and work rule reforms in future collective bargaining agreements.
Key Data
$1,453 million
— LIRR operating expenses in 2017.
$1,310 million
— Metro-North operating expenses in 2017.
$172 million
— Potential savings from aligning LIRR per-mile costs with Metro-North in 2017.
49 percent
— Amount by which overtime per position at the LIRR was greater than at Metro-North in 2017.
$168.3 billion is the size of New York State's Fiscal Year 2019 Budget. CBC's David Friedfel joined WT[D]P to discuss spending in this year's budget, as well as how the MTA, NYCHA, and New York City fared in the process.
The NYS FY2019 budget fails to meaningfully address the Metropolitan Transportation Authority's financial troubles, opting for taxi surcharges instead of a comprehensive congestion pricing plan. Furthermore, the budget mandates that New York City provide $418 million for the Subway Action Plan under threat of withholding sales tax revenue, despite the city already bearing the majority of MTA costs.
Key Data
$418 million
— The amount the City of New York is forced to provide for the Subway Action Plan or face having its sales tax revenues withheld.
Mandating two free transfers for subway and bus riders would reduce annual revenue by $40 million, undermining the agency's ability to fund critical capital investments and the $1.5 billion Subway Action Plan. Current fare structures already provide an unrivaled bargain, with inflation-adjusted revenue per ride significantly higher than the actual 2017 average.
Recommendations related to MTA Operating Budget
The Governor should veto A3439/S2560, a bill mandating two free transfers for persons purchasing a ride on Metropolitan Transportation Authority (MTA) subways and buses.
Key Data
$40 million
— Estimated annual revenue reduction for the MTA if the bill mandating two free transfers is enacted.
$1.5 billion
— Cost of the Subway Action Plan currently being implemented to stabilize the system.
$650 million
— Amount of capital investments that could be supported by fare revenue.
$1.91
— 2017 year-to-date average revenue per ride.
$1.21
— Average fare revenue per ride in 1993.
$2.25
— Inflation-adjusted equivalent of the 1993 average fare in 2017.
The Metropolitan Transportation Authority's 2018 proposed budget faces significant funding uncertainty, with the Subway Action Plan potentially turning a projected $30 million surplus into a $498 million deficit without new revenue. To maintain fiscal stability, the board must either secure identified funding sources for the plan or implement commensurate spending reductions in other areas.
Recommendations related to MTA Operating Budget
The board should not advance a budget without either funding sources identified to support the SAP or commensurate reductions in other areas to maintain a cash balance.
In the event a portion of the expected funding is realized, those elements critical to improving the subway system’s infrastructure—and not initiatives primarily geared toward station appearances and customer communications—should be prioritized.
Without any new funding, the board should reject the 2018 budget as proposed.
If the MTA intends to scale back the SAP to match available funding, specific details need to be provided to enable the board to make an informed decision.
Draining reserve funds and eschewing PAYGO capital for more debt should be avoided.
Key Data
$16.4 billion
— The total amount of the MTA 2018 Final Proposed Budget.
$428 million
— The amount budgeted for Subway Action Plan operating costs in 2018.
$30 million
— The expected 2018 end-of-year cash surplus if the Subway Action Plan is fully funded.
$498 million
— The projected end-of-year deficit in 2018 if the Subway Action Plan is implemented without additional revenues.
$528 million
— The increase in state and other funding from yet-to-be-identified sources to support phase one of the Subway Action Plan.
$679 million
— The combined amount held in the Bridges and Tunnels Necessary Reconstruction Fund and the MTA Retiree Welfare Benefits Trust.
The Mayor's proposal to increase the personal income tax to fund MTA capital spending is an inappropriate revenue source, as New York City taxpayers already contribute 40% of the mass transit budget. Instead, funding for long-term transit needs should be generated through congestion pricing or other motor vehicle charges, while programs like half-price MetroCards should be supported by existing city resources.
Recommendations related to MTA Operating Budget
New funding streams to support the transit system’s long-term capital needs should come from motorists through congestion pricing or other charges for motor vehicle use.
A program for city-funded half-price MetroCards for low-income riders does not require a new tax and can be funded with existing City resources.
Key Data
40%
— of the mass transit budget provided by taxpayers through the payroll mobility tax and other taxes.
The Metropolitan Transportation Authority's plan to address the subway crisis requires $456 million in recurring annual operating costs and $380 million in new capital investments. To fund these improvements, the burden should be shared beyond just city and state coffers by securing productivity savings from labor unions and implementing new revenue streams from motorists, such as congestion pricing.
Recommendations related to MTA Operating Budget
The MTA should seek productivity savings from labor unions, such as altering night shift differentials and using split shifts, to help cover the cost of additional workers.
The region should implement congestion pricing or expand the taxicab tax to black cars to generate more revenue from motor vehicle users.
Policymakers should consider a vehicle-miles-traveled user fee based on distance, vehicle weight, or time of day to fund the transit system.
The mayor and governor should reach out to labor and motorists to elicit their cooperation in funding the system rather than fighting over city and state contributions.
Key Data
$456 million
— Recurring annual operating costs for the MTA's plan to reverse subway performance deterioration.
$380 million
— New capital investments required for the MTA's plan.
12%
— Portion of the MTA's mass transit system currently funded by tolls from bridges and tunnels.
2,700
— Number of additional workers required to implement the system enhancements.
The Fair Fares proposal, which would provide half-price transit fares for low-income New Yorkers, is estimated to cost $212 million in foregone revenue and should be funded by New York City rather than through fare hikes or state tax revenue. This subsidy aligns with existing city-funded programs for students, seniors, and paratransit users, representing a small fraction of the city's $84.7 billion operating budget.
Recommendations related to MTA Operating Budget
The Fair Fares proposal to subsidize fares for low-wage workers is worth enacting, and the costs of providing this subsidy should be borne by New York City.
If the mayor supports the policy, it should be a priority that is accommodated within the city’s financial plan.
A broad tax base that draws resources from all wealthier New Yorkers should back the commitment to broader opportunity rather than subsidizing services to the poor with higher fares for other riders.
Key Data
$212 million
— Estimated cost of the Fair Fares proposal in foregone fare revenue.
$1 billion
— Total annual operating funds provided by the city to the MTA.
$84.7 billion
— New York City’s total operating budget.
$100 million
— Annual cost to the city for providing discounted MetroCards to students and senior citizens.
$130 million
— Annual cost to the city for subsidizing paratransit for users who are disabled.
The Metropolitan Transportation Authority's updated financial plan faces a worsening fiscal outlook due to increased labor costs and reduced state subsidies, resulting in a projected $372 million deficit by 2020. To avoid serious financial trouble, the agency must rely on one-time windfalls like insurance proceeds and unspecified future efficiencies, or implement new policy actions to stabilize its budget.
Recommendations related to MTA Operating Budget
The MTA should establish a 1 percent annual general reserve, which could provide $650 million over the plan period if not needed each year.
Absent the availability of general reserve funds, new policy actions will be required to keep the agency from serious red ink.
Key Data
$271 million
— Total reduction in dedicated tax and State subsidy revenues over the financial plan.
$100 million
— One-time insurance proceeds from Superstorm Sandy claims to support 2017 operations.
$372 million
— Projected negative cash balance for the MTA in 2020.
$175 million
— Total favorable impact of expected operating expense reductions through unspecified efficiencies.
$650 million
— Potential funds provided over the plan period by a 1 percent annual general reserve.
$2 billion
— Annual savings generated by agency efficiencies since 2010.
The Metropolitan Transportation Authority faces a projected GAAP deficit exceeding $2.7 billion in 2017, necessitating a shift in funding strategies to better align fare and toll revenues with operating expenses. To improve fiscal health, the agency should implement fare increases greater than 4 percent, expand motor vehicle user charges, and adopt targeted discount policies for low-income riders.
Recommendations related to MTA Operating Budget
The Board should continue the policy of regular and predictable fare increases and move toward a long-term goal of covering approximately half of mass transit expenses with fare revenue.
Additional revenue should be raised from motor vehicle users to achieve a long-term goal of fully covering bridge and tunnel expenses and generating a surplus sufficient to fund one-quarter of mass transit operating expenses.
Transit fares should increase greater than 4 percent in 2017 and 2019 to better align with operating expense growth.
The MTA should seek additional motor vehicle use charges to cross-subsidize transit, such as tolling the City’s East River Bridges, increasing gasoline taxes, or introducing a vehicle-miles traveled user fee.
The agency should cap the number of allowed rides for weekly and monthly passes to improve services and finances.
The MTA should explore peak pricing on subways and buses to reduce rush hour crowding.
The agency should extend the fare calculation policy used for Senior Citizen EasyPay MetroCards to all EasyPay customers.
The MTA should work with the federal government to pursue a more limited senior citizen discount policy that increases the age threshold, reduces the discount percentage, or adds an income test.
As the MTA installs its expected new system beginning in 2018, it should ensure the capacity to implement an income-conditioned fare structure so that it can be implemented quickly if adopted.
Key Data
$2.7 billion
— The MTA’s deficit using GAAP is expected to surpass this amount in 2017.
3.9 percent
— The average annual increase in operating expenses since the MTA implemented a fare increase in 2009.
42 percent
— The increase in fringe benefits for employees and retirees since 2009.
39 percent
— The percentage of total operating expenditures projected to be covered by fares by 2020, even if planned increases are implemented.
77 percent
— The guideline level for bridge and tunnel toll coverage using 2017 estimates.
$90 million
— The estimated potential yield from capping the number of allowed rides for weekly and monthly passes in 2015.
The labor agreement with the Transport Workers Union provides 28 months of labor peace but exceeds the current financial plan, potentially necessitating increased fares or additional borrowing for the capital program. Furthermore, the deal delays the implementation of necessary productivity improvements regarding work rules and benefits for another 28 months.
Key Data
28 months
— Duration of labor peace secured by the new agreement with the Transport Workers Union.
Rising subway and bus fares are consuming a larger share of low-wage workers' earnings, making it difficult for many to afford transit and access economic opportunities. Implementing income-related fare discounts for low-income residents, funded by the city rather than the transit agency, would improve affordability and support economic mobility.
Recommendations related to MTA Operating Budget
The city should implement half-price fares for working-age adults who have incomes at or below the federal poverty threshold to match the discount available to senior citizens.
The mayor and City Council should cover the cost of income-related fare discounts as part of their strategy to make New York more affordable and combat inequality.
The MTA should not bear the financial burden of fare discounts, as its mission is transportation, not wealth redistribution or income verification.
The city’s Human Resources Administration should determine eligibility for reduced fares because it already verifies incomes for social-service programs.
The proposed income-related fare discount policy should be part of the fare-hike process.
Key Data
$121
— Projected cost of a monthly MetroCard following the scheduled fare increase.
$1,452
— Annual cost of a monthly MetroCard following the scheduled fare increase.
$200 million
— Estimated annual cost of providing half-price fares for working-age adults at or below the federal poverty threshold.
$1 billion
— Annual city contribution to the MTA’s operating budget.
$300 million
— Annual city contribution for reduced fares for seniors, students, and paratransit users.
25%
— Percentage of low-income residents who often were unable to afford transit fares in 2015.
The Metropolitan Transportation Authority's 2017 preliminary budget relies on fare increases and cash reserves to fund capital investments, but faces significant long-term risks from expiring labor contracts, falling tax receipts, and massive unfunded postemployment benefit liabilities. To ensure fiscal stability, the agency must secure new revenue sources, such as increased tolls or vehicle-miles traveled fees, while better managing its capital funding and labor costs.
Recommendations related to MTA Operating Budget
The MTA should prepare a plan to fund PAYGO capital contributions without exhausting cash balances.
The agency must adjust financial projections to better reflect foreseeable risks like expiring labor contracts and falling tax receipts.
Leadership should set aside additional resources for the agency’s OPEB trust fund to address the massive unfunded liability.
New revenue should be generated through cross-subsidies from motor vehicle users, including higher tolls, gasoline taxes, and a vehicle-miles traveled fee.
MTA leadership should continue and intensify its efforts to identify and implement efficiencies to manage costs.
Key Data
$15.5 billion
— The total amount the MTA expects to spend in 2017 according to its preliminary budget.
$1.1 billion
— The amount of pay-as-you-go (PAYGO) capital investments the MTA plans to make using projected surpluses and cash balances.
$14 billion
— The total OPEB liability for the MTA as of March 31, 2016.
$113 million
— The projected adjusted cash deficit for the MTA in 2020.
$608 million
— The amount listed in the financial plan as the 2017 OPEB Current Payment for retiree health insurance.
NY1 About 150,000 disabled New Yorkers use the MTA's pricey Access-A-Ride service to get around the city each day. Two new studies are proposing ways to dramatically improve service and save taxpayers more than $100 million a year.
New York City's Access-A-Ride paratransit program is the most expensive in the nation, costing $461 million in 2015, and relies heavily on an internal MTA cross-subsidy equivalent to 11 cents per regular transit ride. To improve the program's financial outlook, the MTA should implement strategies such as shifting ambulatory trips to lower-cost broker car services, adjusting fares, and pursuing Medicaid reimbursement for eligible medical trips.
Recommendations related to MTA Operating Budget
The MTA could shift these trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries, as moving all ambulatory customers with BCS could save the MTA up to $126 million annually.
The MTA could provide service more efficiently and improve the customer experience by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies (TNC) like Uber and Lyft.
The MTA could also consider an overhaul of the contracting relationships that make up the paratransit program by altering its service design and contracting a single, full-service broker to consolidate the multiple management layers.
Doubling the fare could save as much as $184 million annually by reducing trips and increasing fare revenue.
The MTA can also reduce demand by providing incentives for use of the fixed-route system by paratransit customers when appropriate.
Increasing the share of trip requests met with an offer of feeder service to 5 percent could save up to $20 million annually.
Changing the policy of Medicaid reimbursement for non-emergency medical transport could generate an estimated $14 million annually for the MTA.
Key Data
$461 million
— 2015 cost of the Access-A-Ride paratransit program.
$71
— 2014 cost per trip for the Access-A-Ride program, the highest in the nation.
17
— Number of people registered to use the service per 1,000 residents in 2014.
$126 million
— Potential annual savings from shifting all ambulatory customers to the broker car service program.
$184 million
— Potential annual savings from doubling paratransit fares.
$256 million
— 2015 internal MTA cross-subsidy used to finance the Access-A-Ride program.
The City's operating support for the Metropolitan Transportation Authority is projected to grow by $183 million, or 22 percent, between fiscal years 2014 and 2020. This increase is driven by existing obligations and statutory requirements rather than new policy decisions, with the City subsidy representing only about 6 percent of the MTA's $15.1 billion total budget.
Key Data
$183 million
— The increase in City operating support for the MTA between fiscal years 2014 and 2020.
22 percent
— The growth rate of City operating support for the MTA between fiscal years 2014 and 2020.
$15.1 billion
— The total operating budget of the MTA.
6 percent
— The portion of the MTA's total budget covered by the City subsidy in 2014.
The Metropolitan Transportation Authority faces a potential $1.5 billion shortfall over its financial plan due to economic downturn risks, with a projected $182 million cash deficit in 2019 even under optimistic growth and savings scenarios. Leaders are advised to implement changes to prepare for these recessionary challenges.
Recommendations related to MTA Operating Budget
The MTA’s leaders should consider changes in order to meet challenges associated with a recession.
Key Data
$1.5 billion
— Potential shortfall over the financial plan based on the last three recessions.
$616 million
— Potential shortfall in a single year based on the last three recessions.
$182 million
— Expected cash deficit in 2019 even if the region continues to grow as forecasted, planned fare and toll increases are implemented, and savings targets are achieved.
An economic downturn could cost the MTA up to $1.5 billion, representing 3.9 percent of its 2018 budget. The agency should proactively prepare for a potential recession to avoid increasing long-term costs.
Key Data
$1.5 billion
— Potential impact of an economic downturn on the MTA's budget.
3.9 percent
— Potential impact of an economic downturn as a share of the MTA's 2018 budget.
The Metropolitan Transportation Authority's financial plan relies on optimistic economic growth projections that could leave the agency vulnerable to significant revenue shortfalls in the event of a recession. To mitigate these risks, the agency should adopt more cautious revenue assumptions, establish an explicit rainy day fund, and implement stricter policies regarding the reallocation of capital and retiree benefit funds.
Recommendations related to MTA Operating Budget
More cautious economic and revenue assumptions seem appropriate to better anticipate a future recession.
The MTA should establish an explicit rainy day fund covering a larger share of total expenses before releasing future reserves to reduce other long-term liabilities.
Greater restrictions on diversion of OPEB funding and a firmer commitment to PAYGO capital allocations would reduce the risks associated with reallocation of those items.
Continuing to increase planned efficiency gains beyond current targets for future years would help bring expenditures in line with the revenues available when a downturn occurs.
Accumulation of general reserves should be permitted to provide a buffer against economic volatility.
Key Data
$1.5 billion
— The cumulative revenue shortfall the MTA would experience over a four-year period in an illustrative recession scenario.
$616 million
— The revenue loss in Year Three of the financial plan under an illustrative recession scenario.
$1.3 billion
— The annual savings the MTA achieved in 2015 through its expenditure reduction initiative.
$20 billion
— The current unfunded OPEB liability of the MTA.
4,780
— The number of employees the MTA would need to lay off in Year Three to cover projected shortfalls from an illustrative recession.
19.4%
— The percentage of total revenue that debt service is scheduled to reach in 2019.
The proposed legislation to increase free transfers on subways and buses would cost the Metropolitan Transportation Authority $40 million annually, exacerbating existing funding shortfalls for its capital plan and operating budget. Given that current fare structures already provide significant value compared to historical inflation-adjusted rates, reducing revenue for this purpose would be fiscally irresponsible.
Recommendations related to MTA Operating Budget
Governor Cuomo should veto S3228/A2607, a bill mandating an increase from one to two free transfers for persons purchasing a ride on Metropolitan Transportation Authority subways and buses.
Key Data
$40 million
— The estimated annual revenue reduction for the Metropolitan Transportation Authority if the bill mandating two free transfers is enacted.
$1.21
— The average fare revenue per ride for the Metropolitan Transportation Authority in 1993.
$2.05
— The inflation-adjusted equivalent of the 1993 average fare revenue per ride in 2014 dollars.
$1.70
— The actual average revenue per ride for the Metropolitan Transportation Authority in 2014.
$500 million
— The amount of capital investments that could be supported by the fare revenue the agency would lose under the proposed legislation.
The Metropolitan Transportation Authority requires over $14 billion annually to operate, with costs largely driven by labor expenses and debt service. To address a projected $2.1 billion deficit by 2018, the system should restructure its funding model to rely on a specific balance of fare revenue, motorist fees, and tax subsidies.
Recommendations related to MTA Operating Budget
Mass transit users should pay fares sufficient to cover 45 to 50 percent of the operating costs of those services.
The cost of road infrastructure—bridges and tunnels in the MTA’s case—ought to be borne entirely by motorists.
Motor vehicle user fees should generate a surplus large enough to cover 20 to 25 percent of the cost of mass transit services to help compensate for the negative externalities of vehicle use.
Tax subsidies to mass transit should comprise 25 to 30 percent of the operating costs and also fund “catch up” capital investments needed to bring the system to a state of good repair.
The MTA should move toward following these guidelines more closely in the future.
Key Data
$14 billion
— Operating the MTA system requires more than this amount per year.
$5.7 billion
— Annual revenue generated by the fare box for the MTA.
$1.7 billion
— Annual revenue generated by tolls on MTA bridges and tunnels.
$16.6 billion
— Estimated requirement for mass transit services, excluding Bridges and Tunnels, in 2018.
$2.1 billion
— The amount of the deficit that will remain unfunded under current policies in 2018.
$587 million
— Toll revenue in excess of Bridges and Tunnels operating expense and debt service in 2014.
New York City taxpayers currently provide $4.5 billion annually to the MTA through a combination of direct budget allocations and regional and state taxes, significantly exceeding the $2.1 billion contributed by taxpayers outside the city. To address funding needs, the state should shift toward user charges on motor vehicles, such as a vehicle-miles traveled tax, rather than relying on increased city tax contributions.
Recommendations related to MTA Operating Budget
The MTA should raise necessary funds through user charges on motor vehicles.
Additional funding for the MTA can and should come from motorists.
New York should implement a vehicle-miles traveled (VMT) tax to provide a fiscal foundation for future highway and mass transit investments.
Key Data
$922 million
— Total 2014 City annual contribution to the MTA, including operating budget, capital projects, and debt service.
$4.5 billion
— Total annual contribution from New York City taxpayers to the MTA.
$2.1 billion
— Total annual contribution from taxpayers outside the city to the MTA.
$587 million
— Annual revenue from tolls used to help pay for mass transit services.
$1 billion
— MTA's annual future budget hole.
74%
— Estimated share of regional taxes paid by residents and firms within New York City.
The Metropolitan Transportation Authority faces a $19 billion funding gap over the next five years, requiring a shift in how mass transit is financed to cover necessary repairs and improvements. To address this, the state should implement a combination of a vehicle-miles-traveled tax and more rational tolling policies to increase the share of costs covered by drivers to 25%.
Recommendations related to MTA Operating Budget
The State of New York should create a new revenue stream to support borrowing that fills the gap in the capital plan and contributes 25% of the MTA’s operating costs.
The State of New York should adopt a funding model where transit fares cover half the cost, general tax subsidies another 25% and motor vehicle cross-subsidies 25%.
Elected leaders should implement, over a period of years, some combination of a VMT tax and more rational tolling to sustain and improve transportation facilities.
The State of New York should increase the portion of MTA mass transit costs covered by drivers to 25%.
Key Data
$32 Billion
— The amount the Metropolitan Transportation Authority needs over the next five years to repair, replace, and improve its facilities.
$13 Billion
— The amount of funding the Metropolitan Transportation Authority currently has available for its five-year capital plan.
$19 Billion
— The size of the funding gap the Metropolitan Transportation Authority faces over the next five years.
$2.1 Billion
— The total amount of new annual revenue needed from motor vehicle user fees to support borrowing and operating costs.
11%
— The current percentage of MTA mass transit costs that drivers pay through tolls, fees, and taxes.
25%
— The target percentage of MTA mass transit costs that drivers should cover according to the proposed funding model.
The Metropolitan Transportation Authority faces significant financial instability due to recurring deficits and heavy reliance on borrowing for capital projects, necessitating a new funding model. A proposed '25-50-25' formula suggests reallocating costs so that motorists, transit riders, and taxpayers each contribute a specific share to ensure long-term fiscal health and infrastructure maintenance.
Recommendations related to MTA Operating Budget
Auto user fees should pay for the facilities available to drivers. Therefore, the cost of bridge and tunnel facilities should be funded entirely through tolls and fees paid by the motorists who use them.
Motorists’ tolls and fees should also generate a surplus large enough to cover approximately one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover approximately one-half the operating cost of those services.
State and local tax subsidies to mass transit should cover at least one-quarter of the operating cost of those services and fund 'catch-up' capital investments needed to bring the system to a state of good repair.
The MTA should stop running large deficits and lower its future debt burden by funding regular replacement needs with operating revenues rather than borrowing.
Key Data
$17.1 billion
— The annual operating and financing expenditures of the MTA’s agencies budgeted for 2012.
$2.6 billion
— The amount of additional annual revenue the 25-50-25 policy would provide by 2016 without new taxes.
$3.6 billion
— The projected deficit for 2016, which is approximately 18 percent of operating expenses.
$17.8 billion
— The cumulative unfunded liability for Other Post-Employment Benefits (OPEB) as of the end of 2011.
$32 billion
— The amount of MTA debt outstanding in 2011.
$16.8 billion
— The total investment in five 'megaprojects' including the South Ferry Terminal, Flushing Line Extension, Second Avenue subway line, East Side Access, and Fulton Street Transit Center.
The Metropolitan Transportation Authority could generate approximately $93 million annually by capping the number of rides permitted on unlimited 7-day and 30-day MetroCards, offering a more equitable alternative to broad fare increases. This strategy would provide significant revenue to support transit operations and capital needs while impacting only the heaviest users of the system.
Recommendations related to MTA Operating Budget
The MTA should cap the number of rides available to “unlimited” 7-day and 30-day MetroCards to secure approximately $93 million in annual revenue.
The MTA should implement a fairer strategy by capping the number of rides on unlimited passes at a level above the break-even point.
The MTA should utilize more information about the ways high-volume passholders use the system to guide the setting of specific ride caps.
Key Data
$93 million
— Estimated annual revenue generated by capping the number of rides on unlimited 7-day and 30-day MetroCards.
$147 million
— Expected annualized yield from the 2015 subway and bus fare increase.
$15 billion
— Funding gap for the proposed MTA 2015-2019 capital plan.
$807 million
— Estimated annual foregone revenue from 'free' rides on unlimited passes.
$619 million
— Net gain from eliminating unlimited passes if extra revenue from unused rides was also foregone.
26 percent
— Increase in total subway and bus ridership between 1996 and 1999.
The Metropolitan Transportation Authority faces a $15 billion funding gap for its $32 billion capital plan, necessitating a "25-50-25" funding approach involving tax subsidies, user fees, and cross-subsidies. To address this, the authority should prioritize infrastructure repair and signal modernization over new expansions while implementing fare increases and higher motor vehicle user charges.
Recommendations related to MTA Operating Budget
Better planning and greater transparency should precede investments in new expansions.
Modest fare increases are necessary to bring fares closer to the 50 percent target.
The motor vehicle users’ cross-subsidy would need to more than double to reach its 25 percent target.
Increases in existing tolls, license and registration fees, and the gasoline tax are available mechanisms for raising revenue.
The MTA should implement innovative possibilities like the Move New York plan to raise revenue from motor vehicle use.
Key Data
$13.5 billion
— MTA spending in 2014.
$32 billion
— Total investment required for the MTA capital plan.
$15 billion
— Funding gap identified in the MTA's capital plan.
$5.5 billion
— Amount allocated to projects that would expand the network.
$2.6 billion
— Cost overruns on the East Side Access project.
$1.6 billion
— Annual increase in funding from the payroll mobility tax.
The Metropolitan Transportation Authority faces significant long-term fiscal challenges, including $33 billion in long-term debt and $10 billion in unfunded post-employment benefit liabilities as of 2013. To ensure future viability, the agency must transition to GAAP-based budgeting, implement more equitable revenue strategies like increased auto cross-subsidies, and modernize its labor, technology, and fare collection systems.
Recommendations related to MTA Operating Budget
A reinvented MTA should balance its budget on a GAAP basis.
The share from auto users should be significantly higher than is now the case, and fare increases should be more predictable and incremental than has been the case.
A reinvented MTA would have a legal framework for labor relations that permits all its employees to bargain under the same set of rules and be part of a single human resource system.
A reinvented MTA would have a timely plan for bringing its assets to SOGR and would give highest priority in its capital investments to achieving that goal.
A reinvented MTA would make the financial investment and operational changes necessary for far speedier conversion to CBTC.
A reinvented MTA would quickly initiate planning and deployment of a new fare collection system that reduces collection costs.
A reinvented MTA would take the lead in working with the other major regional transportation agencies to develop a plan for expanded trans-Hudson rail capacity.
Key Data
$33 billion
— The amount of MTA long-term debt outstanding in 2013.
$10 billion
— The amount of the MTA's unfunded OPEB liability at the end of 2013.
15 percent
— The estimated current cost of fare collection for the MTA.
$14 billion
— The amount of MTA long-term debt outstanding in 2000.
$1.3 billion
— The amount of the MTA's unfunded OPEB liability when first reported in 2007.
$115 billion
— The total amount of capital investments made system-wide since 1982.
The Metropolitan Transportation Authority faces a significant long-term financial deficit, with GAAP-based annual deficits ranging from $3.0 billion to nearly $3.4 billion, largely because current revenues fail to cover full operating costs. To address this, a "50-25-25" funding model is proposed, which relies on fares covering 50 percent of costs, tax subsidies covering 25 percent, and auto-user fees covering the remaining 25 percent.
Recommendations related to MTA Operating Budget
The MTA should adopt a funding model where fares cover 50 percent of full operating costs, a tax subsidy covers 25 percent, and a cross-subsidy from auto users covers the remaining 25 percent.
The agency should continue moderate but regular fare increases to align with the 50-25-25 funding formula.
Policymakers should enact new forms of auto-cross subsidy for major new funding, such as higher bridge and tunnel tolls, gas tax increases, or congestion pricing.
The MTA must put renewed energy into cost reduction efforts to improve its financial standing.
The agency should keep existing tax subsidies as part of a balanced revenue strategy.
Key Data
$2.8 billion
— The MTA's GAAP-based deficit for the current year.
$3.0 billion to nearly $3.4 billion
— The projected annual deficits for each of the next four years using GAAP accounting.
$26.6 billion
— The estimated core capital needs for state-of-good-repair and rolling stock replacement from 2015-2019.
$1.9 billion
— New resources identified by the MTA since February 2013.
$240 million
— The cumulative total of out-year budget gaps.
$1.3 billion
— The annual savings goal the MTA intended to achieve by 2017 through measures launched in 2009 and 2010.
Understanding the Metropolitan Transportation Authority's financial health requires distinguishing between operating ratios and recovery ratios, as different calculation methods significantly alter the perceived share of expenses covered by fares. While New York City Transit's combined operating ratio of 56 percent compares favorably to systems in Washington, D.C. and Chicago, these figures are heavily influenced by accounting definitions and the allocation of costs between subway and bus services.
Key Data
56%
— The combined New York City Transit operating ratio for subway and bus services.
40%
— The maximum recovery ratio for the combined New York City Transit system.
77%
— The operating ratio for New York City Transit subways.
36%
— The operating ratio for New York City Transit buses.
36%
— The recovery ratio for the Metropolitan Transportation Authority's transit and commuter rail systems.
The Metropolitan Transportation Authority should implement a "25-50-25" funding formula, where 20-25 percent of expenses are covered by auto-user cross subsidies, 45-50 percent by riders, and 25-30 percent by state and local tax subsidies. To address ongoing deficits and rising costs, the authority should enact multi-year fare and toll increases, while also reforming senior discount policies and capping unlimited pass usage to prevent fraud.
Recommendations related to MTA Operating Budget
The MTA should adopt a "25-50-25" formula for funding transit services, where 20-25 percent of expenses are paid by auto-user cross subsidies, 45-50 percent by riders, and 25-30 percent by state and local tax subsidies.
Fare and toll decisions should be made on a multi-year basis to ensure predictability for the system’s revenues and passengers.
Toll increases should be larger than currently proposed to ensure motor vehicle users pay a fair share.
Transit fares should yield a revenue increase greater than 7.5 percent annually in 2013 and greater than 15 percent in 2015 to cover rising operating costs.
The MTA should "cap" the number of allowed rides for weekly and monthly passes to protect against fraudulent abuse.
The MTA should explore peak pricing on subways and buses with a goal of reducing rush hour crowding.
The MTA should begin a more limited senior citizen discount policy and explore its eventual elimination or modification.
Key Data
25-50-25
— The proposed formula for funding the MTA's transit services.
42 percent
— The current reliance on fares for revenue.
13 percent
— The current reliance on cross subsidies from motor vehicle use.
7.5 percent
— The revenue increase yield from the MTA's financial plan in 2013.
15 percent
— The revenue increase yield from the MTA's financial plan in 2015.
50 cent
— The proposed increase for EZ Pass users for major bridges and tunnels.
The Metropolitan Transportation Authority faces significant long-term deficits, with annual operating and financing expenditures reaching $17.1 billion in 2012 and a projected deficit exceeding $3.6 billion by 2016. To address these shortfalls, a "25-50-25" funding model is proposed, which would rely on a mix of auto user fees, fare increases, and tax subsidies to generate nearly $2.6 billion in additional annual revenue.
Recommendations related to MTA Operating Budget
The cost of bridges and tunnels should be funded entirely through tolls and fees paid by the motorists who use them.
Motorists' tolls and fees should generate a surplus large enough to cover approximately one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover approximately one-half the operating cost of those services.
State and local tax subsidies to mass transit should cover at least one-quarter of the operating cost of those services and fund "catch-up" capital investments needed to bring the system to a state of good repair.
Key Data
$17.1 billion
— Annual operating and financing expenditures of the MTA's agencies in 2012.
$3.6 billion
— Projected deficit for the MTA in 2016.
$2.6 billion
— Additional annual revenue generated by 2016 under the proposed 25-50-25 funding approach.
39%
— Current portion of operating expenses recovered through fares by the MTA.
33%
— Portion of operating expenses recovered by the Long Island Rail Road.
$2.75
— Cost of a single-ride subway ticket by 2016 under the proposed funding plan.
NY1 As the MTA prepares to raise subway and bus fares once again, a fiscal watchdog group says riders should pay even more than what the agency is expected to propose.
The Metropolitan Transportation Authority faces significant financial instability due to recurring operating deficits and heavy reliance on borrowing for capital needs, necessitating a new financing strategy. A proposed "25-50-25" formula suggests reallocating costs so that bridge and tunnel tolls, transit fares, and tax subsidies each contribute specific portions to cover operating and capital expenses.
Recommendations related to MTA Operating Budget
The cost of bridge and tunnel facilities should be funded entirely through user fees paid by motorists.
Motorists’ tolls and fees should also generate a surplus large enough to cover approximately one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover approximately one-half the operating cost of those services.
State and local tax subsidies to mass transit should cover at least one-quarter of the operating cost of those services and fund “catch-up” capital investments.
The MTA should stop running large deficits and lower its future debt burden by funding regular replacement needs with operating revenues rather than borrowing.
Key Data
$17.1 billion
— The annual operating and financing expenditures of the MTA’s agencies budgeted for 2012.
$3.6 billion
— The projected deficit for 2016, equivalent to approximately 18 percent of operating expenses.
$17.8 billion
— The cumulative unfunded liability for Other Post-Employment Benefits (OPEB) as of the end of 2011.
$32 billion
— The amount of MTA debt outstanding in 2011.
$16.8 billion
— The total investment in five major "megaprojects" including the South Ferry Terminal and East Side Access.
$3.6 billion
— The amount of cost overruns associated with the five major "megaprojects."
The Metropolitan Transportation Authority faces severe financial instability, with an estimated $2.7 billion deficit and potential revenue losses of $1.8 billion annually due to legal challenges against the payroll mobility tax. To address these fiscal problems, the agency requires consistent fare increases and continued operational belt-tightening, as current service restorations lack sufficient justification given ridership patterns.
Recommendations related to MTA Operating Budget
Everyone—commuters, MTA employees, city and suburban residents, and elected officials—must face reality and contribute in some way to a long-term solution to the MTA's fiscal problems.
Periodic, predictable fare increases along with continued belt-tightening, including a trimmed service schedule, are unavoidable elements of a sensible solution.
The $29.5 million going for service restorations should be better justified.
Adjustments can be made to deploy buses in accord with shifting usage patterns.
Key Data
$2.7 billion
— Estimated deficit in the current year based on audited financial statements.
$1.8 billion
— Potential annual revenue loss if the invalidation of the payroll mobility tax is sustained.
$136 million
— Combined loss to the 2013 and 2015 deficits caused by delaying planned fare hikes.
$47 million
— Unexpected cash surplus in 2012 based on immediate cash needs.
$2.5 billion
— Annual deficits exceeded this amount from 2008 to 2011.
16%
— Percentage of annual expenses represented by deficits from 2008 to 2011.
The potential loss of the Payroll Mobility Tax revenue, which funds the Metropolitan Transportation Authority, could create a $459 million budget gap that would likely necessitate significant service cuts or substantial fare increases for Long Island Rail Road and Metro-North Railroad commuters. Relying on alternative funding methods to cover these operational costs would likely prove more burdensome to suburban riders than the existing tax structure.
Key Data
$459 million
— The projected hole in the MTA budget in 2012 if the Payroll Mobility Tax is not collected in suburban counties.
$1.6 billion
— The cost to operate the Long Island Rail Road in 2012.
$1.3 billion
— The expenses for the Metro-North Railroad in 2012.
46%
— The required fare increase on the Long Island Rail Road if the lost Payroll Mobility Tax revenue were offset by higher fares.
32%
— The required fare increase on the Metro-North Railroad if the lost Payroll Mobility Tax revenue were offset by higher fares.
The Metropolitan Transportation Authority faces a significant debt burden, with debt service consuming nearly one-third of its fare and toll revenue. To manage this, the authority should pursue responsible debt refunding strategies that prioritize long-term savings rather than short-term budget relief that unfairly shifts costs to future riders and taxpayers.
Recommendations related to MTA Operating Budget
The MTA should adhere to the State Comptroller’s guidelines regarding debt refunding and should not seek any exemptions from these rules.
Any debt refunding strategy should prioritize guidelines that promote the greatest total savings while preventing the unfair passing of costs onto future taxpayers and straphangers.
The MTA must ensure that potential savings from high-to-low interest rate exchanges are not offset with shuffling and stretching of debt service payments.
Key Data
$32 billion
— in long-term debt outstanding for the Metropolitan Transportation Authority.
$2.1 billion
— in debt service costs for the MTA in 2012.
17 percent
— of the MTA's total revenues, including tax subsidies, consumed by debt service.
$39 billion
— in outstanding debt the MTA will have by 2015.
$18.6 billion
— in total debt service payments following the 2002 refunding.
$180 million
— in required present value savings for a $6 billion refunding of outstanding debt.
The Metropolitan Transportation Authority faces significant financial constraints, with projected deficits necessitating a 'net-zero' wage freeze for transit workers to avoid further fare hikes or service reductions. While transit employees receive compensation that exceeds that of counterparts in other cities and private sector workers, the authority must balance these labor costs with the need for operational efficiency and safety improvements like bus partitions.
Recommendations related to MTA Operating Budget
The award should include work rules changes that will produce savings that allow for enhanced maternity benefits and the accelerated installation of clear partitions for buses.
A more ambitious award could provide for small wage increases, not to exceed inflation, funded by additional productivity concessions or added employee responsibility for health insurance costs.
A greater priority should be placed on the safety of TWU employees and on accelerating the installation of the clear bus partitions.
The MTA’s proposals to merge the position of “conductor” and “train operator” deserve serious consideration to improve efficiency.
Applying the three-year wage freeze to the TWU contract would not compromise the standard of living of TWU workers.
Key Data
$424 million
— The amount of additional revenue produced by the 2011 fare increase.
$80 million
— The surplus anticipated for the MTA in fiscal year 2013.
$42 million
— The cost increase to the MTA for each one point wage increase awarded to the TWU.
53 percent
— The fare box operating recovery ratio for New York City Transit.
11.4 percent
— The compounded wage increase provided by the 2009 arbitration award.
$720 million
— The projected savings from the MTA's wide scale efficiency program in 2012.
Rising pension costs are placing significant pressure on the Metropolitan Transportation Authority's budget, with pension contributions for subway and bus systems growing from $314 million in 2004 to $803 million in 2011. These costs are projected to reach $1 billion by 2014, consuming an increasing share of toll and fare revenue that is expected to exceed 19 percent.
Recommendations related to MTA Operating Budget
The Legislature should adopt the 'Tier VI' pension reform plan in a timely manner to help contain future pension costs.
The Governor should include the 'Tier VI' pension reform plan in the Executive Budget to help contain future pension costs.
The state should eliminate overtime from the final average salary (FAS) calculation for new employees to prevent pension padding and reduce costs.
The state should increase the retirement age to 65 for new workers to align with national trends and reduce long-term costs.
The state should extend optional defined contribution plans to other groups of employees to draw those looking for more portable retirement benefits.
Key Data
$1 billion
— Projected 2014 pension contribution amount for the NYCT and TBTA divisions.
19 percent
— Projected share of total toll and fare revenue consumed by pension contributions in 2014.
$803 million
— Pension contribution amount for the NYCT and TBTA divisions in 2011.
15.7 percent
— Share of total toll and fare revenue consumed by pension contributions in 2011.
$314 million
— Pension contribution amount for the NYCT and TBTA divisions in 2004.
8.6 percent
— Share of total toll and fare revenue consumed by pension contributions in 2004.
The agreement to adjust personal income tax brackets provides a net gain of $1.9 billion in annual revenue, but it also includes a reduction in the payroll tax dedicated to the MTA that could jeopardize mass transit services if the promised offset is not maintained. This tax deal also introduces long-term reforms such as design-build procurement and pension system modifications to improve fiscal responsibility.
New York City's bus systems, which handle over 2.6 million daily passenger trips, rank among the highest-cost and lowest-productivity operations in the nation. While traffic congestion contributes to slower average speeds of 7.7 to 8.6 miles per hour compared to a 10.7 median for other systems, this does not fully account for the relative inefficiency in operating costs.
Key Data
2.6 million
— The number of passenger trips handled by the Metropolitan Transportation Authority's buses each day.
2.3 million
— The number of daily passenger trips for the NYCT Bus system.
1.1 million
— The number of daily passenger trips for the Los Angeles bus system.
7.7
— The average speed in miles per hour for the NYCT Bus system.
8.6
— The average speed in miles per hour for the MTA Bus system.
10.7
— The median speed in miles per hour for all 10 bus systems analyzed.
The Metropolitan Transportation Authority's bus and commuter rail systems are relatively inefficient compared to other large U.S. transit agencies, with high costs in vehicle maintenance and non-vehicle operations. While the subway system performs relatively well, there is still significant room for improvement in non-vehicle operations, particularly regarding staffing patterns.
Recommendations related to MTA Operating Budget
The MTA should prioritize efficiency initiatives for its two large bus systems, which are inefficient compared to other large U.S. transit systems and comprise a major portion of operating expenses.
The MTA should continue efforts to terminate redundant station staff, such as former token booth clerks, to improve efficiency in non-vehicle operations.
The MTA should explore best practices in Chicago to identify potential new initiatives for improving labor productivity and efficiency.
The MTA should utilize benchmarking of unit cost measures against other large urban transit agencies to identify areas where the authority is out of line with industry standards.
Key Data
$3,313.1 Million
— Total operating expenses for the New York City subway system in 2009.
$2,289.4 Million
— Total operating expenses for the New York City Transit bus system in 2009.
$1,104.5 Million
— Total operating expenses for the Long Island Railroad in 2009.
$858.5 Million
— Total operating expenses for the Metro-North Commuter Railroad in 2009.
$506.993 Million
— Total operating expenses for the MTA Bus Company in 2009.
The Metropolitan Transportation Authority should implement a long-term policy to cover 50 percent of operating expenses through fare revenue, a goal that currently remains unmet as fares covered only 39 percent of expenses in 2009. To achieve this target and manage costs, the agency should consider implementing peak pricing for subways and buses while aggressively controlling wage and fringe benefit expenditures.
Recommendations related to MTA Operating Budget
The subway, bus and railroad fare increases should move toward establishing a long-term policy to cover 50 percent of mass transit operating expenses with fare revenue.
The MTA should explore the feasibility of incorporating in its fare policy for subways and buses the practice of “peak pricing.”
Growth in expenditures should be constrained through all available means including aggressive collective bargaining to limit wage and fringe benefit costs.
Fare increases greater than 7.5 percent biannually will be needed to move fare revenue closer to 50 percent of relevant expenses.
Key Data
50%
— The target percentage of mass transit operating expenses that should be covered by fare revenue.
39%
— The portion of MTA operating expenses covered by fares in 2009 when defined by the MTA's budgeting methods.
33%
— The portion of MTA operating expenses covered by fares in 2009 when defined using generally accepted accounting principles (GAAP).
39.1%
— The average surcharge share of the base fare for LIRR peak hour rides.
33.3%
— The average surcharge share of the base fare for MNR peak hour rides.
7.5%
— The percentage of biannual fare increases that are insufficient to reach the 50 percent revenue coverage target.
The MTA faces significant financial challenges, including projected budget gaps exceeding $1 billion by 2013 and a capital plan that calls for $28.1 billion in investment while identifying only $18.2 billion in funding. To address these issues, the organization should adopt a "50-25-25" funding model that relies on rider fares, general tax subsidies, and cross-subsidies from auto users, while improving capital project planning and implementation.
Recommendations related to MTA Operating Budget
The MTA should adopt a “50-25-25” approach to raising money, where mass transit services are funded half from fares paid by riders, one-quarter from general tax subsidies, and one-quarter from cross-subsidies from auto users.
State taxes should underwrite the capital investment needs that arise from bad policy decisions made by the MTA and state officials in the past, rather than imposing this burden on current riders.
The MTA leadership should give greater attention to improved planning and implementation as they continue to develop the next five-year capital plan.
New MTA leadership must devote more effort to constraining expenditure growth, utilizing cross-subsidies from auto users and the farebox as the best source for new revenues.
Key Data
$842
— Preliminary financial plan budget gap in 2012 (in millions).
$1,138
— Preliminary financial plan budget gap in 2013 (in millions).
$4,656 million
— Budget gap in 2012 if generally accepted accounting principles were applied.
$5,097 million
— Budget gap in 2013 if generally accepted accounting principles were applied.
$28.1 billion
— Total investment called for in the 2010-2014 capital plan.
$18.2 billion
— Identified funding sources for the 2010-2014 capital plan.
The Metropolitan Transportation Authority faces significant financial instability due to substantial debt and recurring budget gaps, threatening its role as a vital economic asset for New York. To ensure its long-term viability, the agency requires a transition to a more stable and sustainable fiscal foundation rather than relying on year-to-year adjustments.
Recommendations related to MTA Operating Budget
The Metropolitan Transportation Authority needs to be put on a firmer fiscal footing, instead of lurching from one year to another.
A coalition of organizations advocates for a balanced financial plan for the MTA that restricts the use of a new mobility tax to long-term capital needs rather than permanent operating support. Any use of this tax revenue for immediate operating deficits should be limited to the first year and contingent upon implementing toll and fare increases of at least 8%.
Recommendations related to MTA Operating Budget
Revenues generated by the mobility tax during the first year in which it is collected may be used to support the operating needs of the MTA, provided, however, that such revenues may only be used for this purpose if toll and fare increases of at least 8% relative to their current levels are in effect during this time.
Revenues generated by the mobility tax during the first year in which it is collected may be used to support new borrowing and direct expenses related to the MTA's capital program and the debt service associated with the MTA's current portfolio of expansion projects.
Revenues generated by the mobility tax after the first year in which it is collected shall be used exclusively to support new borrowing and direct expenses related to the MTA's capital program and the debt service associated with the MTA's current portfolio of expansion projects.
Key Data
8%
— The minimum level of toll and fare increases required to justify using mobility tax revenue for MTA operating needs during the first year.
The Metropolitan Transportation Authority requires a revised financial strategy that prioritizes increased fare revenue, higher bridge tolls, and stricter spending controls to address long-term operating deficits. Implementing greater transparency in capital projects and adopting a more stable funding mix, such as a payroll tax, are essential steps to ensure the system's fiscal sustainability.
Recommendations related to MTA Operating Budget
The MTA board should be required to implement transparency measures and accept responsibility for substantially lowering the growth in operating expenses.
A two or three year schedule of fare increases to bring the share of expenses covered by the fare to approximately 50 percent should be implemented.
Tolls on the East River bridges and Harlem River bridges should be higher than the Commission recommends to provide a greater incentive to shift to mass transit and generate more revenue.
A regional payroll tax should be considered as a substitute for volatile real estate-related taxes to provide a more reliable and stable future source of revenue.
Transparency recommendations should apply to projects in the current capital plan as well as future ones to ensure accountability on all dollars.
Key Data
8 percent
— The initial fare hike recommended by the Commission.
7 percent
— The amount of three annual fare increases required to reach the goal of covering 50 percent of expenses by 2011.
a quarter
— The portion of total commitments from the 2000-2004 capital plan that remained uncommitted at the end of 2004.
300 projects
— The number of projects that remained uncommitted at the end of the 2000-2004 capital plan.
50/25/25
— The recommended funding formula for mass transit, consisting of 50% from fares, 25% from a general tax subsidy, and 25% from a cross-subsidy from auto users.
The MTA faces significant budget shortfalls, requiring a new funding strategy that balances costs between riders, drivers, and general tax subsidies. Implementing a 50/25/25 funding formula would require moderate fare increases and new revenue sources from drivers to ensure long-term financial stability.
Recommendations related to MTA Operating Budget
The MTA should adopt a 50/25/25 funding formula where responsibility for funding is divided among riders, drivers, and the general public.
The MTA must link fares to costs to create an incentive for efficiency and depoliticize fare-hike decisions.
Drivers should pay a quarter of the cost of mass transit, in addition to the full cost of bridge and tunnel operations.
A general tax subsidy should cover the remaining 25 percent of mass-transit operating costs.
The MTA should avoid major new taxes dedicated to the agency, such as a payroll tax or increased sales tax.
Key Data
$1.2 billion
— Updated 2009 MTA cash shortfall.
$2.7 billion
— Updated 2012 MTA cash shortfall.
46 percent
— Portion of mass-transit operating costs covered by fares in 2008.
15 percent
— Required fare increase in 2009 to reach the 50 percent coverage target.
$97
— Cost of a monthly Metrocard following a cumulative 20 percent fare increase by 2012.
$1.3 billion
— Additional revenue required from drivers in 2009.
The Metropolitan Transportation Authority faces significant financial challenges, including a $3.1 billion deficit in 2007 and a projected $4 billion operating deficit for the following year, necessitating a fare increase to maintain operations. Linking future fare adjustments to the actual cost of a ride, rather than inflation, offers a transparent approach that incentivizes efficiency and clarifies the impact of labor negotiations on transit costs.
Recommendations related to MTA Operating Budget
The MTA should commit to regular, modest and predictable fare increases rather than larger, periodic, politically motivated jolts.
Future fare increases should be linked to the cost of a ride rather than inflation, as this approach allows for the possibility that increased efficiency and new technology could keep fare increases below inflation.
Key Data
$222 million
— Cash on hand held by the MTA at the time of the report.
$3.1 billion
— The MTA's projected operating deficit for 2007.
$4 billion
— The MTA's projected operating deficit for the following year.
$4.3 billion
— The state's projected funding gap for the coming fiscal year.
$1.38
— The average price paid per ride in 1996 before the widespread use of MetroCards.
The Metropolitan Transportation Authority faces a looming fiscal crisis characterized by ballooning debt service and significant budget shortfalls, driven by reliance on borrowing for capital expenses rather than sustainable revenue. To avoid long-term instability, the agency must implement productivity improvements and rebalance its revenue structure by increasing fares, taxes, and tolls.
Recommendations related to MTA Operating Budget
The M.T.A. should make a greater commitment to productivity enhancements in order to reduce the rate of cost increases.
The M.T.A. should rebalance its revenue structure so that fares account for half, taxes for one quarter, and tolls and fees for another quarter of expenditures.
The M.T.A. should explore higher gasoline taxes and congestion-pricing plans to achieve increased and rebalanced revenue.
The M.T.A. must prioritize replacing subway cars and buses using operating revenue rather than excessive borrowing.
Key Data
$2.1 billion
— The projected shortfall for the M.T.A. in 2010, equal to nearly one quarter of the authority’s projected revenue.
$900 million
— The estimated annual savings the M.T.A. could achieve by enacting productivity initiatives equal to the 2.5 percent average annual gains seen in the private sector.
$32 billion
— The projected outstanding debt for the M.T.A. by the end of 2010, up from $22 billion in 2005.
25 percent
— The projected increase in M.T.A. expenditures over the four years following 2006.
$1.9 billion
— The projected debt service for the M.T.A. by 2010, which would consume half of every fare collected.
45 percent
— The portion of M.T.A. expenditures currently financed by fares.
The Metropolitan Transportation Authority faces growing operating deficits, projected to reach $3.5 billion by 2009, driven by rising labor and capital costs. To achieve a balanced budget, the agency should implement fiscal reforms including increased farebox recovery ratios, higher tolls on bridges and tunnels, and new congestion pricing policies to generate necessary cross-subsidies.
Recommendations related to MTA Operating Budget
The cost of bridge and tunnel facilities should be paid for entirely through user fees paid by motorists.
User fees paid by motorists should also generate a surplus large enough to cover one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover one-half the operating cost of those services.
State and local subsides to mass transit should cover one-quarter of the operating cost of those services and fund “catch-up” capital investments needed to bring the system to a state of good repair.
Key Data
$3,547.9 Million
— Projected operating deficit for the MTA in 2009.
$12,491.0 Million
— Projected total operating expenses for the MTA in 2009.
$2.66
— Estimated cost per ride for the MTA in 2004.
46%
— Share of MTA operating costs covered by fares in 2004.
$1,382 Million
— Estimated annual net gain from implementing a London-like congestion pricing plan.
The New York region's transportation system requires a comprehensive, regional approach to financing that relies more heavily on user fees and less on unpredictable general fund subsidies to ensure long-term stability. To achieve this, the region should establish a dedicated policy board, increase mass transit fares to cover half of operating costs, and dedicate motor vehicle user fees to cover road maintenance and provide cross-subsidies for transit.
Recommendations related to MTA Operating Budget
The governors of New York and New Jersey should create a new entity with authority to set and enforce regional transportation policies and priorities.
The region’s transportation agencies should have sufficient resources to meet all necessary operating expenses.
Motor vehicle user fees should be dedicated to transportation agencies to cover the operating costs of roads and bridges and provide a cross-subsidy to mass transit.
Mass transit riders should pay a fare sufficient to cover one-half the transit agencies’ operating costs.
New capital for improvements and expansions should be generated by borrowing and ensuring that contributions to capital from third parties are used for this purpose.
The existing backlog in maintenance and repairs caused by a history of under-funding and neglect should be eliminated at an accelerated pace and be financed by general fund appropriations.
Key Data
$13 billion
— Combined annual operating expenditures of the 25 transportation agencies in the New York-New Jersey metropolitan area.
$1.2 billion
— Region-wide mass transit operating deficit in 2001.
$9.4 billion
— Total operating expenditures for mass transit in the region in 2001.
$4.1 billion
— Total expenditures for roads and bridges in the region in 2001.
$3.5 billion
— Total fares collected from riders in the region.
$30 billion
— Capital investments made by the MTA over the 20 years prior to the report.
New York City's transportation system, while extensive, faces significant challenges in operating efficiency and infrastructure maintenance compared to international peers. To remain competitive, the city must address high operating costs, improve off-peak ridership, and secure funding to bring existing facilities to a state of good repair while strategically expanding capacity.
Recommendations related to MTA Operating Budget
New York’s leaders should address how to improve transit system efficiency and ridership.
New York’s leaders should address how rapidly to achieve a state of good repair for the existing infrastructure.
New York’s leaders should address how much new mass transit capacity is necessary.
An initiative aimed at identifying modern human resource measures could help enhance New York’s future competitiveness.
Efforts to increase ridership should focus on off-peak hours.
Experiments with higher fares at the busiest time could identify effective ways to shift some ridership to the less crowded hours.
The initiative could be made even more effective if employers were encouraged to cooperate by facilitating flexible working hours.
Key Data
$20.4 billion
— Estimated funding needed to achieve and maintain a state of good repair for Transit Authority facilities.
$12.2 billion
— Estimated funding needed for highway and related facilities over the ten-year period spanning fiscal years 1998 to 2007.
$30 billion
— Total investment in rail transportation systems in 1998 dollars since the early 1980s.
24 trains per hour
— Projected capacity of the new LIRR connection to reach Grand Central.
40,000
— Potential peak hour ridership for expanded Queens subway lines (B and Q).
$9.7 billion
— The portion of the $10.7 billion capital budget gap accounted for by line structures, signals, line equipment, and stations and communications.
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