NEW YORK (BLOOMBERG) -- The head of New York City’s transit network is urging state lawmakers to resolve a $35 billion funding gap to help modernize its crumbling system and provide better service.
The MTA, which oversees the city’s subways, buses and commuter rail lines, needs the legislature to help find $2 billion to $3 billion of new or existing recurring annual revenue. The MTA would then borrow against those funds to raise the $35 billion and close the shortfall in its $68.4 billion 2025—2029 capital budget.
About 90% of that spending plan is dedicated to keep the MTA’s existing infrastructure in a state of good repair and to improve service. The transit agency needs to replace thousands of rail cars that are reaching the end of their useful life, update aging power substations and rehabilitate Grand Central Terminal’s more than 100-year-old train shed that’s falling apart.
Janno Lieber, the MTA’s chief executive officer, cautioned lawmakers against scaling back on the capital plan during a hearing in Albany on Thursday on transportation as part of the state’s own budget-making process.
“It ain’t getting smaller because we are at the minimum point where we can assure that we do not lose ground, that we don’t end up with elevated structures that are more likely to fall apart or power systems that are more likely to blow up,” Lieber told lawmakers.
The MTA helps fuel New York City’s economy as people use transit to get to work, school, shopping and cultural events. The 2025—2029 capital plan will create an estimated $106 billion of economic activity, according to an Ernst & Young report.
The transit provider is also looking to the federal government to help support the capital budget, as it has for prior MTA infrastructure spending. The next plan estimates Washington will provide $14 billion of funding. The MTA is seeking the federal money as President Donald Trump’s administration is focused on reducing spending and decreasing the size of the federal government.
While Washington is in a “tumultuous period of change,” Lieber told lawmakers, he said he believes that transportation infrastructure needs across the US will help build support for such spending.
“History says that bipartisanship on transportation investment prevails,” Lieber said. “We partnered with red-state transit systems through Covid and transit funding was preserved. So we are optimistic, but obviously we’re going to have to wait for the dust to settle before we have any indications.”
There are some options for how the state can help find additional funding for the MTA. Raising income taxes on the highest earners, boosting the state’s capital gains levy, directing 2% of the state’s budget every year to the MTA, imposing a 0.25-cent fee to every online package, and charging for New York City street parking are some proposals that have been offered, according to a report from the Permanent Citizens Advisory Authority to the MTA, a rider advocacy group that has a non-voting member on the MTA’s board.
The MTA is working to resolve its 2025—2029 capital plan after the transit agency on Jan. 5 began a congestion pricing program that charges motorists driving into the busiest parts of Manhattan. That new toll is expected to raise $15 billion for infrastructure upgrades within the MTA’s 2020—2024 capital budget.
— With assistance from Zach Williams