MTA Warns of 5.5% Fare Hikes in Desperate Plea for More Government Funding
As special pandemic funds dwindle and ridership remains low, MTA says it needs new sources of income.
Facing massive budget deficits, the MTA warned Wednesday of higher-than-projected fare increases that could push the cost of a subway or bus ride higher than $3 by 2025 — following another hike already planned for next year.
At the agency’s monthly board meeting, officials painted a dire picture of the MTA’s financial forecast, saying that without a return to pre-pandemic ridership levels or new recurring funding streams — from Washington, Albany or City Hall — a planned 4% fare hike may instead become a 5.5% raise next year, with another 4% bump two years later.
On the subways and buses, that could mean a $2.90 fare in 2023 and one that hits $3.05 by 2025 if the MTA goes over what it calls a fiscal cliff once $15 billion in federal emergency operating aid is spent.
The most recent increase came in April 2019, when the price of 7-day and 30-day unlimited ride MetroCards went up, along with express bus fares and MTA bridge and tunnel tolls. The $2.75 base fare for subway and bus trips has been in place since 2015.
But with federal money running out, fares could go up significantly over the next few years.
“The fact is that our remaining federal aid will not cover the next four years of deficits,” said Mark Willens, the MTA’s chief financial officer. “We only have $5.6 billion of the $15 billion left…it is clearly not enough to cover these deficits.”
MTA Chairperson and CEO Janno Lieber said service cuts or layoffs made to save money would be “a last resort.”
“Folks who depend on mass transit, it doesn’t make sense to me that they should suffer with much less service,” Lieber said. “We will work with all of the stakeholders — Washington is an important part of this equation, City Hall, Albany, comptrollers, advocates, budgeteers, whoever, everybody — to address the MTA’s financial issues.”
Looking for Revenue
Robert Mujica, the state’s outgoing budget director and an MTA board member, warned that the transit agency needs to show public safety and performance improvements if it’s going to seek more money from lawmakers at all levels.
“People are willing to fund a functioning MTA that is performing and meeting the needs of New Yorkers — not necessarily one that they don’t think is doing that,” Mujica said at the meeting.
Tony Utano, the head of the largest union for transit workers, echoed the MTA’s call for new funding, warning that the transit system could quickly backslide into an era of frequent equipment breakdowns, delayed trips and more track fires.
“All the investments made up to this point will have been wasted,” Utano, president of Transport Workers Union Local 100, said in a statement. “We’ve seen this movie before and it’s a disaster. It must be avoided at all costs.”
Lieber said higher-than-forecast fare increases may be avoided if lawmakers can come up with new streams of revenue to fill a $600 million-and-growing annual budget deficit.
“If they also want to help us come up with an answer that makes the fare hike unnecessary, we’re all ears,” Lieber said. “We’re all ears.”
The grim outlook quickly followed the enormous financial hit the MTA took during the pandemic, as bus, subway, and railroad ridership cratered. The agency had, for more than a decade, relied on farebox revenues to cover about 50% of its operating budget.
But with ridership at around 60% of 2019’s pre-pandemic levels — when there were more than 7 million weekday subway and bus trips — the transit agency now faces a post-COVID farebox revenue of around 35% for the foreseeable future, according to a Nov. 2 briefing MTA officials made to the City Council.
THE CITY reported earlier this month that Lieber made presentations in Puerto Rico on the MTA’s finances to city and state lawmakers at the Somos Conference in San Juan.
For months prior to that, he had been calling for the MTA to be funded similarly to police, fire and sanitation services, saying mass transit is “like air and water” to millions of New Yorkers.
“The very system that moved essential workers during the pandemic and which was and is expected to operate for all who need it when we need it is on a precipice,” said Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA. “The fiscal cliff is very real.”
‘Nobody’s Going to Pay’
Apart from raising the fare or finding ways to cut costs, Lieber declined to suggest alternate funding ideas to city, state or federal lawmakers, citing how they have “a lot of complex competing issues” to handle.
“We want to give them the flexibility to customize an answer, a plan, for dealing with a $600 million gap this year and the $1.2 billion gap in the years to follow,” he said. “And it is responsible not to be prescriptive, for us not to tell them how it ought to be done.”
Rachael Fauss, of the watchdog group Reinvent Albany, said MTA debt payments remain a “huge cost” to the agency’s operating budget.
“It’s spiked to historic highs and now makes up 21% of recurring operating funds, whereas in 2004, it was only 11%,” she said.
The MTA board is expected to vote on the final budget for 2023 next month. A vote on any fare increase would come after.
As she waited for a No. 1 train in Lower Manhattan, Rosemary Smith, 23, warned that higher-than-usual fare increases could hurt the MTA as it tries to woo riders back into the transit system.
“If you’re going to raise the fares, nobody’s going to pay,” said Smith, who commutes by subway from South Ferry to Chambers Street four times a week. “People are going to start jumping the turnstiles, people are going to start opening the doors, and that’s not good for the MTA.”