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The Metropolitan Transportation Authority is facing a $295 million budget deficit next yea that could explode into a $900 million hole by 2030 — while the cash-strapped agency continues to hike fares and fees.
The MTA is expecting to cover its $21.9 billion budget this year but its bills are growing faster than its revenues, according to a recently released state comptroller report.
The transit agency is facing growing deficits after this year, spiraling to $507 million in 2028, $707 million in 2029 and $897 in 2030, the report stated.
Revenue is expected to grow 2.1% annually from 2027 through 2030, but spending is projected to grow 3.2% during that time period — despite planned fare and toll increases in March 2027 and March 2029.
“That is not a recipe for a good business model,” chair of the MTA finance committee chair Neal Zuckerman admitted at the committee’s meeting Monday.
News of the potential budget difficulties comes despite the agency recently rolling out a hated congestion toll for Midtown Manhattan drivers, and while fare evasion costs the agency hundreds of millions a year in lost revenue.
Healthcare costs, rising debt payments, overtime and bus fare evasion are squeezing the agency, even as stronger tax collections, extra taxpayer funding from Albany and FEMA reimbursements for pandemic expenses are helping to keep the budget balanced this year.
“Despite the more positive revenue picture, expenses have increased to fully offset these gains and add to the MTA’s out-year budget gaps,” the comptroller wrote.
Overtime remains a major pressure point as the MTA through August spent $821 million on overtime — $141 million above its forecast for that period.
Comptroller Thomas DiNapoli’s office warned the full year overtime costs are on track to exceed the authority’s $993 million budget for overtime by $225 million.
Bus fare evasion — a continual pain point for the MTA — also continues to look dismal.
The MTA estimated bus fare evasion reached 49% in the second quarter, up from 45% a year earlier. Bus fare evasion cost the MTA an estimated $568 million in 2024, the latest year available, according to the fiscal watchdog the Citizens Budget Commission.
The comptroller estimated cutting evasion on buses by 10% could generate as much as $150 million annually.
However, the MTA recently had to bench its fare evasion enforcement team because of recent physical altercations with passengers and hasn’t announced when the 350 member team will be back in service.
Meanwhile, the MTA’s last fare increase took effect in January raising fares 10 cents, from $2.90 to $3
The MTA’s long-term borrowing picture is bleak as well.
The agency borrows money to pay for construction, infrastructure repairs and purchases of trains and buses, and its total debt is projected to nearly double from $45.3 billion in 2025 to $88.9 billion in 2033, according to the comptroller’s report.
However, the MTA is getting more money than it expected from taxpayers and federal pandemic reimbursements to help cover its bills this year.
The authority expects $109 million more this year from the payroll mobility tax than it projected in February.
Albany also approved an additional $542 million of tax allocations for the MTA’s day-to-day operations than the authority had previously counted on.
The federal government also paid the MTA back for money the transit agency spent responding to COVID. The report said total reimbursements reached $747 million — $147 million more than the authority had budgeted for, but this is not a permanent annual source of funding.
Congestion pricing generated about $550 million in revenue through September, but the MTA puts that money toward infrastructure improvements rather than the agency’s day-to-day operating budget.