For the first time in 20 years, The Metropolitan Transportation Authority (MTA) has projected a balanced budget for five straight years, according to its preliminary five-year financial plan that shows a balanced budget through 2027.
That is a sharp reversal from the “fical tsunami” that the agency said it was facing in the sping of 2020 in the worst days of the pandemic when ridership plunged 90 percent.
However, not everyone is convinced the outlook is so rosy. The watchdog group Citizens Budget Commission (CBC) predicted when current federal subsidies run out, the budget deficit will swell to $918 billion in 2029. The watchdog group says fare evasion and labor costs will go up faster than fare increases will contribute to the future shortfall as early as next year.
In its latest budget, the MTA did acknowledge that there are potential risks including lower ridership that predicted, a slower NYC economy, lower casino revenues, and failure to realize predicted efficiencies.
However, MTA chairman and CEO Janno Lieber said the MTA “will remain focused on providing the best possible service for New Yorkers, while also getting to work on transformative capital projects.”
In addition, Lieber mentioned that the MTA plans to make the entire subway system ADA accessible and transition to a zero-emissions bus fleet.
There is a projected $400 million in annual operating efficiencies by better use of technology, and sharper management focus which the MTA is predicting will add another $100 million in savings in fiscal 2025. This will bring annual savings in that sector to a goal of $500 million. The MTA is also basing its predictions that it will reach 80 percent of its pre-pandemic ridership by 2027. Currently, it is carrying about 70 percent of the passengers it did in the pre-COVID years.
With MTA Board approval, there will be a proposed 5.5 percent toll increase and a 4 percent fare increase for 2023, in addition to one that the MTA board voted on July 19 to take effect at the end of August to raise an additional $117 million in 2023, with additional 4 percent increases in 2025 and in 2027.
In addition, the authority said the balanced budget is aided by an increase of the payroll mobility tax, and increased City funding for paratransit and other dedicated taxes in the FY 2024 New York State Budget.