MTA plans 5.5% fare hike next year, needs $600M more to plug deficit

MTA plans 5.5% fare hike next year, needs $600M more to plug deficit

The MTA plans to elevate fares and tolls by 5.5% next June to assist plug a serious price range deficit attributable to dwindling ridership because the begin of the pandemic, officers introduced on Wednesday.

The hike is bigger than the 4% fare and toll will increase the MTA put in place each two years from 2009 to 2019.

The MTA board final yr held off on rising transit fares in an effort to appeal to more riders, though the group did elevate bridge and tunnel tolls by 7%.

Riders received’t know precisely how the will increase will have an effect on their wallets till next yr, when the MTA holds hearings and lays out a proposed pricing construction.

Even with riders and drivers paying more, MTA Chief Monetary Officer Kevin Willens mentioned the company nonetheless needs one other $600 million in subsidies next yr to stability its price range, which is required by legislation.

If metropolis, state and federal officers don’t provide you with the cash, transit officers warned service cuts, layoffs and even increased fare hikes will probably be mandatory.

“My goal is to protect service first and foremost, that any cuts to service, God forbid, have to be a last resort,” MTA Chairman Janno Lieber mentioned Wednesday. “I want to make sure our system remains affordable, especially for our working-class riders.”

The figures have been launched as a part of the MTA’s 2023 price range proposal, which will probably be voted on next month by the company’s board. Lieber has for more than a yr warned of a “fiscal cliff,” pointing to a pointy drop in income from transit fares, the company’s largest income. Subway ridership is down by roughly 40% from earlier than the pandemic, or about 2 million fewer turnstile entries per weekday.

The MTA acquired $15.1 billion in aid from Congress in 2020 and 2021 to assist stability its books. Willens on Wednesday mentioned the company has spent all however $5.6 billion of that cash, and estimated the remaining will dry up by the top of 2026.

Willens mentioned the $600 million price range shortfall next yr is just the start: The MTA nonetheless faces a deficit of $1.2 billion in 2024, rising to $1.6 billion in 2026.

The MTA is projecting $19 billion in bills next yr, with $11.4 billion of that going to labor prices and $3.2 billion used for debt funds. This comes because the MTA is anticipating to negotiate a brand new contract with Transport Employees Union Native 100 next yr.

Lieber mentioned the company needs to know quickly whether or not it’s going to get the $600 million, and if not, it may affect the labor talks.

“We’re under the gun if there’s no solution forthcoming, we have to take earlier action than may be self-evident,” Lieber mentioned Wednesday after the MTA board assembly.

Lieber mentioned any labor or service cuts would take a few year-and-a-half to implement.

“All levels of government must step up and fund the bus and subway system — or we are going to quickly slide back into another horrible era with equipment breakdowns, delayed trips, track fires and graffiti everywhere,” TWU Native 100 President Tony Utano wrote in a press release.

Andrew Rein, president of the Residents Funds Fee, mentioned labor ought to work with the MTA to discover methods to make the transit system run more effectively.

“The bottom line is even when they roll up their sleeves and work with labor they still need help,” Rein mentioned. “Nobody should be casual in the belief that the state has a magic money tree to divert money from other programs to fill the MTA’s gap.”

Rein additionally thinks state lawmakers ought to keep away from elevating taxes to discover the cash.

“We need a strong economy and a strong MTA and we can’t be pitting those against each other,” he added.

Gov. Kathy Hochul mentioned at a press convention this month she would supply an replace on new funding sources for the MTA in January throughout her State of the State tackle. She additionally expects the MTA to discover “alternative sources of revenue,” though she didn’t elaborate.

“Gov. Hochul took action last year to avoid a fare hike or service reductions, and she is committed to providing safe, quality, and reliable transit service to riders,” Hochul spokesperson John Lindsay wrote in a statement. “We will continue working with federal partners and state legislators on how to best support public transit.”

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