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12/2/2022
New York’s Metropolitan Transportation Authority this week released its proposed 2023 budget and four-year financial plan, which acknowledges the transit agency faces a $2.6 billion funding deficit.
The budget proposal focuses on reducing that deficit to $600 million in 2023, and from nearly $3 billion in 2025 and 2026 down to $1.2 billion, MTA officials said in a press release.
That $3 billion estimate has risen by $382 million from an earlier estimate in July due to higher pension costs, Bloomberg.com reported.
Beginning in 2023, the MTA projects operating efficiencies yielding $100 million in savings for that year, rising to $416 million total by 2026. The agency seeking extra sources of funding from all levels of government as the initial COVID federal funding package of $15 billion has been pared down to just $5.6 billion, MTA officials said in the release.
If the MTA doesn’t receive additional funding, it will be forced to spend down more of its COVID funds, reduce staff and services, increase fare prices and defer or cancel capital projects, MTA officials said.
Plus, contract negotiations with Transport Workers Union Local 100 add more uncertainty as the clock ticks down to the current agreement’s expiration on May 15, Bloomberg reported.
The budget proposal also assumes the recurring fare and toll increases that were temporarily suspended during the pandemic as overall ridership dropped to just 10% of pre-pandemic levels at the MTA’s lowest point. A ridership forecast report released in July predicts a $2.1 billion deficit between 2022 and 2026 based on lost fare revenue alone.
Under the proposed budget, the MTA would implement a 5.5% fare and toll increase in 2023 and 2025, higher than the usual 4% rate increase that occurs every other year on a regular schedule, Bloomberg reported. That fare hike would provide $373 million in additional annual revenue.
Weekday subway ridership has recovered to about 60% of pre-pandemic levels, Bloomberg reported. Farebox revenue typically accounted for 40% of the MTA’s total operating budget before the pandemic, but it’s now expected to fall to 30%.
“In the July financial plan, we laid out the case for early action to address the MTA’s looming fiscal cliff,” said MTA Chief Financial Officer Kevin Willens. “Today's proposed budget and financial plan further demonstrates the need for new, dedicated sources of funding which, combined with MTA actions to find savings without limiting service, can greatly reduce the fiscal cliff and protect mass transit for the region.”
The MTA board will meet Dec. 21 to vote on the budget.