New York’s Metropolitan Transportation Authority (MTA) released its preliminary five-year financial plan that shows a balanced budget through 2027. The financial plan reflects updates since the MTA warned of a fiscal cliff heading into 2023, with a projected $600 million deficit.
With the increase of the payroll mobility tax, increased City funding for paratransit, and other dedicated taxes in the FY 2024 New York State Budget, the MTA projects a balanced budget through 2027, the first time in more than 20 years the authority has projected a balanced budget for five consecutive years.
The New Budget
In addition to new dedicated revenue sources, MTA agencies have begun identifying operating efficiencies. Part of New York State’s budget included the authority achieving $400 million in annual operating efficiencies to reduce expenses. New York City Transit, Long Island Rail Road, and Metro-North Railroad have identified $250 million through such actions as piloting new sensors to reduce heating costs at facilities and inviting Access-A-Ride users to book trips via app instead of through a call center and harnessing predictive algorithms to increase efficiency of vehicle maintenance and acquisition of materials and replacement parts.
Beginning in 2025 MTA agencies will identify an additional $100 million in efficiencies, targeting a goal of $500 million in annual savings.
“Governor Hochul and the State Legislature delivered for riders in this year’s budget, providing stability with long-term funding sources at a time when we have seen strong progress in bringing more and more people back to mass transit,” said MTA Chair and CEO Janno Lieber. “With a stable operating budget for the foreseeable future, the MTA will remain focused on providing the best possible service for New Yorkers, while also getting to work on transformative capital projects — to make the entire subway system ADA accessible, to transition to a zero-emissions bus fleet, and to bring all MTA systems much closer to an industry-standard State of Good Repair.”
Minding the Gap
With Board approval, a proposed 5.5% toll increase and 4% fare increase for 2023 are expected to take effect by the end of August and projected to generate $117 million in 2023. The five-year plan assumes an additional 4% increase in 2025 and in 2027.
Traffic has returned with MTA Bridges and Tunnels crossings back at, or above, pre-pandemic levels. Paid ridership across subways, buses, commuter railroads and paratransit continue to trend toward the midpoint scenario analyzed by consulting firm McKinsey, which has the MTA reaching 80% of its pre-pandemic ridership by 2027.