NEW YORK – A hike in the MTA fare may soon be inevitable, as the transit agency detailed the financial hardship they are in due to the pandemic.
On Wednesday, senior transit officials showed MTA board members just how dire the situation was with regards to their deficits: billion-dollar deficits, that is. And it’s projected to grow even more, approaching $3 billion by 2026, according to Kevin Willens, MTA’s chief financial officer.
The reason for the crisis? Passenger numbers have yet to fully return to pre-pandemic levels, standing at just two-thirds of what they were in 2019.
New York State Comptroller Thomas DiNapoli’s office has crunched the numbers and wants to know how the MTA plans to save money and fund operations as it seeks to close major budget gaps caused by the pandemic. COVID-19 has brought dramatic and sustained reductions in passenger numbers, from which the agency is still recovering.
The MTA got a $15 billion federal bailout, but has already spent two-thirds of it to stay afloat.
“That federal grant isn’t forever. Part of it is in the form of a loan that has to be repaid. And the passenger numbers didn’t return,” DiNapoli said.
He also warned that as government funds deplete and passenger numbers drop, there could be severe service cuts and fare hikes in the future.
“The reason New Yorkers need to worry is how to fill the void. Cut service?” Of Naples he said.
In response to the comptroller’s damaging report, the MTA said in part that it was “committed to maintaining robust service for our passengers, and this report emphasizes that solving post-pandemic budget gaps with fare hikes and service cuts alone is not an attractive option.
As for how to save costs, MTA president Janno Lieber ruled out one of the methods mentioned by DiNapoli.
“Any cut in service, God forbid, is a last resort,” he said.
That leaves fares going up, an idea that’s wildly unpopular with passengers.
“It shouldn’t even be the rate it is now. They want more money, but we’re not getting the service we need! It’s out of control,” said cyclist Peggy Banks.
The new state audit revealed that before the pandemic, subway and bus fares accounted for 42 percent of MTA revenue. Now it’s just 24 percent, which helped create a $1.6 billion deficit.
The state comptroller said a 28 percent rate increase would be needed to ease the MTA’s financial pain. An increase in that amount would raise the price of a trip from $2.75 to $3.50.
Meanwhile, Lieber recommended a much more modest fare hike of 5%, which would be about 15 cents more than what passengers are paying now. He also said the tax cliff could be avoided if federal, state and local governments invest more money, amounting to hundreds of millions of dollars.
“And if they also want an answer that makes the rate hike unnecessary, we’re all ears,” Lieber said.
So what happens next? The MTA board will vote on the plan in December. If they approve a rate hike, Gov. Kathy Hochul can still reverse it if she finds alternative financing.
