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MTA is far more broke than previously expected, state comptroller says
By
Stephen Nessen
Published Oct 23, 2024
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Marc A. Hermann / MTA
By
Stephen Nessen
Published Oct 23, 2024
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The MTA’s finances are in far worse shape than the agency’s financial whizzes previously predicted, due in part to Gov. Kathy Hochul’s abrupt pause of congestion pricing, according to a report published Wednesday by state Comptroller Thomas DiNapoli.
MTA officials as recently as July boasted their books were balanced through 2026. But the comptroller report says increased overtime costs and the slow rebound of transit ridership is pushing the agency toward a financial cliff.
High spending and a lack of revenue could leave the MTA with a budget shortfall next year of at least $176 million — which could grow to $1.5 billion in a worst-case scenario, according to the report.
In 2023, Hochul pushed through a new slate of funding sources she said would keep the MTA solvent and stave off any service cuts for the following five years. But that package included at least $500 million in annual funding for the agency from fees on three casinos planned for downstate — none of which have been approved.
“A year ago, the MTA was looking forward to a period of solid fiscal health, but its financial condition has quickly turned from stable back to uncertain,” DiNapoli said in a statement. “Paid ridership is not coming back as fast as the MTA hoped. 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.”
The report also warns that Hochul’s congestion pricing pause could increase the cost of the agency’s debt payments, and that could eat into the budget used to pay for the daily operation of the subway, bus and commuter railroad systems.
“The damage caused by Gov. Hochul's congestion pricing pause looms large in the comptroller's report on the MTA's financial condition, as evidenced by the phrase ‘congestion pricing’ appearing no less than 26 times,” Rachael Fauss, senior policy analyst with the good government group Reinvent Albany, wrote in an email. “Nearly every aspect of the MTA's finances were affected by her reckless decision, from the operating budget to the capital plan to the MTA's debt loads, severely threatening the MTA's ability to provide reliable, affordable transit service. The governor's decision to unilaterally pause congestion pricing single-handedly took the MTA from a path of financial stability to uncertainty, as shown by this thorough report."
Spokespeople from Hochul’s office did not respond to requests for comment.
“We value input from the Office of the State Comptroller, and the risks identified in their report are consistent with what we are actively managing and have discussed publicly at our Board meetings," said MTA spokesperson John McCarthy. "We have achieved considerable operating savings and we’re committed to doing even more.”
The financial troubles identified in the report come as MTA officials prepare to ask state lawmakers for new revenue streams to pay for at least $33 billion worth of transit repairs and upgrades over the next five years.
“The choices MTA makes now will impact its system for years. Whatever the MTA chooses, the focus should be on ensuring safe, frequent and reliable service to protect the region’s future economic prosperity,” the comptroller's report states.
Tagged
new york city
Politics
transportation
Stephen Nessen
Stephen Nessen covers transportation. Since 2008 he has reported on everything from Occupy Wall Street, the rebuilding of the World Trade Center site, Hurricane Sandy, to Trump’s campaign for president. His transportation reporting has taken him everywhere from the MTA’s secret Rail Control Center to the gleaming subways of Seoul. Got a tip? Email [email protected].
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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