MTA plans 5.5% rate hike next year, needs $600 million more to make up shortfall

MTA plans 5.5% rate hike next year, needs $600 million more to make up shortfall

The MTA plans to raise fares and tolls by 5.5% next June to help address a major budget shortfall caused by declining ridership since the start of the pandemic, officials said Wednesday.

The increase is greater than the 4% increases in fares and tolls the MTA implemented every two years from 2009 to 2019.

The MTA’s board last year delayed raising transit fares in a bid to attract more riders, though the group raised bridge and tunnel tolls by 7% .

Riders won’t know exactly how the increases will affect their wallets until next year, when the MTA will hold hearings and present a proposed price structure.

Even if passengers and drivers pay more, MTA chief financial officer Kevin Willens said the agency still needs $600 million in additional grants next year to balance its budget, which is required. by the law.

If city, state and federal authorities don’t provide the money, transit officials have warned that service cuts, layoffs and even bigger fare hikes will be needed.

“My goal is to protect the service above all else, that any reduction in service, God forbid, should be a last resort,” MTA President Janno Lieber said Wednesday. “I want to make sure our system remains affordable, especially for our working-class riders.”

The figures were released as part of the MTA’s 2023 budget proposal, which will be voted on next month by the agency’s board. Lieber has warned for more than a year of a “fiscal cliff,” pointing to a sharp drop in revenue from transit fares, the agency’s biggest source of revenue. Subway ridership is down about 40% from pre-pandemic, or about 2 million fewer turnstile entries per weekday.

The MTA received $15.1 billion in congressional aid in 2020 and 2021 to help balance its books. Willens said Wednesday the agency had spent all but $5.6 billion of that money, and estimated the rest would dry up by the end of 2026.

Willens said next year’s $600 million budget shortfall is just the beginning: The MTA still faces a $1.2 billion shortfall in 2024, which will rise to $1.6 billion in 2026.

The MTA projects $19 billion in spending next year, including $11.4 billion for labor costs and $3.2 billion for debt payments. This comes as the MTA expects to negotiate a new contract with the Transportation Workers Union Local 100 next year.

Lieber said the agency should find out soon if it will get the $600 million, and if not, it could impact the job negotiations.

“We’re under fire if there’s no solution coming, we need to take action sooner than may be obvious,” Lieber said Wednesday after the MTA board meeting.

Lieber said any reductions in labor or services would take about a year and a half to implement.

“All levels of government must step up and fund the bus and subway system – or we’ll quickly slide back into another horrific era with equipment failures, delayed travel, track fires and graffiti everywhere,” he said. writes TWU Local 100 President Tony Utano. A declaration.

Andrew Rein, chairman of the Citizens Budget Commission, said workers should work with the MTA to find ways to make the transit system more efficient.

“At the end of the day, even when they roll up their sleeves and work with the workforce, they still need help,” Rein said. “No one should believe by chance that the state has a magic money tree to divert money from other programs to fill the MTA void.”

Rein also thinks state lawmakers should avoid raising taxes to raise money.

“We need a strong economy and a strong MTA and we cannot pit them against each other,” he added.

Governor Kathy Hochul said at a press conference this month that she would provide an update on the MTA’s new funding sources in January during her state of the state address. She also expects the MTA to find “alternative sources of revenue,” though she didn’t elaborate.

“Governor Hochul took action last year to avoid fare hikes or service reductions, and is committed to providing safe, quality, and reliable public transit service to passengers,” wrote Hochul spokesman John Lindsay in a statement. “We will continue to work with federal partners and state legislators on how best to support public transit.”

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