(The Center Square) — New York City’s beleaguered public transit system is headed back into the red, according to the state’s top bean counter, who says the agency faces an uncertain financial outlook amid sluggish ridership, fare evasion and other factors that could begin to impact service.
The report by state Comptroller Tom DiNapoli projects that the Metropolitan Transportation Authority’s projected budget gap of $221 million this year will rise to more than $652 million by 2028 unless ridership improves or the agency gets a new infusion of funds to cover its operating costs.
DiNapoli said the MTA was “looking forward to a period of solid fiscal health” a year ago but said its financial outlook “has quickly turned from stable back to uncertain.”
“Paid ridership is not coming back as fast as the MTA hoped,” he said in a statement. “With farebox and tax revenues down, a pause on congestion pricing and other financial risks, significant operating budget gaps could again be on the horizon. This is a very real and troubling possibility.”
While paid ridership in June 2024 was at about 70% of pre-pandemic numbers, it failed to grow at the expected pace in July and August, DiNapoli said. The MTA’s private consultant, McKinsey, has projected subway ridership will increase by 80% by the end of 2026, which is a much slower return than previous estimates.
The MTA estimates that fare evasion will cost more than the $700 million in 2023. Roughly half of bus riders and 14% of subway users don’t pay their fares, which has prompted the NYPD to deploy officers on buses and in subway stations to crack down on scofflaws.
Adding to the MTA’s cash flow problems are rising labor costs, such as payroll and benefits, and increasing overtime from the need to fill shifts amid an ongoing shortage of workers, DiNapoli said.
DiNapoli also pointed to a $15 billion hole in the Metropolitan Transportation Authority’s budget left by Gov. Kathy Hochul’s decision to scrap a congestion pricing plan, which was supposed to raise money from higher tolls for the cash-strapped transit agency.
The congestion pricing plan called for charging motorists a new $15 toll to enter Manhattan. The plan was projected to raise $1 billion annually for the transit agency, which had planned to leverage the funds to borrow $15 billion to upgrade subway signals and stations to make them more accessible, among other projects.
But Hochul “indefinitely” paused the tolling initiative in June, citing concerns about the impact of higher tolls on small businesses and working families.
Two lawsuits have been filed challenging Hochul’s decision to indefinitely pause the rollout of congestion pricing.
DiNapoli warns that if the loss of revenue from the pause on congestion pricing isn’t plugged, and if an economic slowdown further reduces ridership and tax revenues — the MTA’s budget gaps could reach $3 billion in coming years.
