Lagging ridership leaves MTA with hard choices, must adjust to changing demand
Looming budget gaps demand MTA put options on the table for all to see
New York State Comptroller Thomas P. DiNapoli released a report Thursday detailing the latest fiscal pressures facing the Metropolitan Transportation Authority (MTA). The MTA provided 3.8 billion trips across its subway, bus, and commuter railroad services in 2019, but the pandemic brought new troubles to the nation’s largest transit system.
Overall ridership on New York City’s regional transit system is not recovering as hoped, leaving revenue well below pre-pandemic levels and forcing the MTA into a difficult financial position as federal aid dwindles, according to a report issued today by New York State Comptroller Thomas P. DiNapoli.
“The MTA’s large budget gaps are coming into greater focus as ridership remains well below pre-pandemic levels and federal relief runs out,” DiNapoli said. “Unless there is an additional influx of city, state or federal aid, the MTA is facing stark options for closing its budget gaps that will impact riders. The MTA needs to lay out what is at stake and explain to the public what options it’s considering to close budget gaps and how it can adjust to continued low ridership levels and shift service to meet changes in demand.”
Even through ridership remains well below 2019 levels, the MTA has restored subway and bus service to encourage ridership and economic recovery. But because farebox revenue from riders has not recovered nearly as well as the MTA had anticipated, large budget gaps exist without the use of federal funding. In 2019, fares covered 51.1% of MTA’s overall operating costs (52.8% for NYC Transit). As of May 2022, fares covered just 31.9% of these costs, which is well below the 40% that the MTA had expected in its budget.
Starting in 2025, the MTA will face growing budget gaps. That year it plans to borrow to bridge a $500 million planned deficit in its operating costs. While borrowing only covers one or two years of expenses, it will increase the MTA’s debt burden and will not be paid off until 2053. If ridership does not return that $500 million gap could grow and even double. After 2025, federal funding will have been used up, resulting in structural deficits of $2 billion or more.
How the MTA chooses to close these gaps in the coming years will likely impact riders on subways, buses, Metro-North and Long Island Railroad. The possibility of service cuts, higher than planned fare hikes, reductions in staffing or maintenance and reduced capital spending are all on the horizon without additional contributions from the MTA’s funding partners or substantial increases in ridership. Additionally, MTA must prioritize its capital plan and determine which projects are most critical and increase budget flexibility.
As DiNapoli’s report notes, other cities have altered service to focus on riders that most rely on public transit. The MTA has taken some steps to meet changes in demand by exploring increased rapid bus service in the outer boroughs. But there are other changing ridership patterns that may offer opportunities for the MTA to improve service even as it looks for savings. For example, weekend subway ridership in June was at 69% of 2019 levels, while weekday was at 61%. Meanwhile, bus ridership was higher on weekdays than weekends. Commuter rail ridership was at, or near, pre-pandemic levels on weekends in June, but weekday ridership was between 60% and 65%.
Economic and Policy Insights: Existential Questions Facing National Public Transit Systems Create New Fiscal Pressures for MTA
DiNapoli’s Subway Ridership Dashboard can be found here.
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