NEW YORK (BLOOMBERG) — New York City’s public transportation network, the biggest in the US, is facing yearly budget deficits that are expected to grow to nearly $900 million by 2030 as rising healthcare costs strain its finances.
The Metropolitan Transportation Authority, a state agency that runs the city’s subways, buses and commuter rail lines, is facing rising labor expenses, health-insurance costs for current and former workers, and more spending on its Paratransit system, which provides transportation for disabled New Yorkers. That is all taking up more of the transit agency’s budget, Jai Patel, the MTA’s chief financial officer, said Wednesday during its monthly board meeting.
The agency is finding about $600 million in operating efficiencies every year, with those savings set to increase in future budgets, but it’s not enough.
“Our basket of revenue sources simply do not keep pace with the uncontrollable expenses,” Patel told MTA’s board members.
The MTA carries about six million riders each weekday across its system and is a major contributor to the region’s economy. Like other transit providers throughout the US, it depends upon revenue sources beyond its farebox and toll collections to help cover operating costs. The MTA receives dedicated revenue from levies on businesses, real-estate and sales transactions to supplement its budget.
It will again need help from state and city lawmakers to resolve the anticipated budget gaps. The MTA is projecting a $295 million deficit next year — about 1.3% of its anticipated $22.8 billion budget — which will increase to $897 million in 2030, according to MTA financial documents.
Those shortfalls could increase even more if there is an economic downturn. The MTA anticipates losing as much as $600 million each year in dedicated tax revenue if the economy cools.
The MTA tends to raise fares and tolls by about 4% every other year, with the next hike set for 2027. Still, those regular fee increases fail to match rising costs.
“We need a strategy together with the political leadership statewide to deal with the reality that we have to balance between the real cost growth and our revenue situation,” Janno Lieber, the MTA’s chief executive officer, told reporters after the meeting.
Healthcare benefits for current employees and retirees are expected to cost the MTA a combined $4.1 billion in 2030, an approximately 50% jump from $2.8 billion in 2025, according to MTA financial documents. Electric power expenses will reach $759 million in 2030, up from $444 million in 2019.
It will take $1.1 billion in 2030 to run Paratransit, compared with $717 million last year, as the number of trips increase. New York City funds 80% of Paratransit costs, but that will drop to 50% on July 1, 2027, unless state lawmakers pass legislation to keep the city’s higher share.
MTA officials struck a deal in May with Long Island Rail Road engineers on a 3.8% salary increase and anticipates reaching similar agreements with other labor groups. Still, that’s higher than the 2% wage boosts the MTA has budgeted for.
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