M.T.A. Averts Fiscal Crisis as New York Strikes Budget Deal
Why It Matters
The deal creates a more permanent funding stream for the M.T.A., which is often at the center of feuds between the city and state over how to prop up its finances.
During each budget cycle, the authority has had to jockey for money against an array of other interests. There is also a long history of state and city officials from both parties cutting transit funds or diverting them to other uses.
Janno Lieber, the authority’s chairman, praised the budget agreement and said it would “assure the M.T.A.’s long-term financial stability.” Transit advocates also thanked the state for moving to put the authority on more steady financial footing.
“This was the most consistent and dependable funding proposal on the table,” said Danny Pearlstein, a spokesman for Riders Alliance, a grass-roots organization of transit riders.
Background
The authority was facing a potential budget gap of nearly $3 billion by 2025.
The Covid-19 emergency plunged the system into crisis as riders abandoned it, depleting fare revenue it had critically depended on. But while the M.T.A. has lost nearly half its annual operating revenue during the pandemic, its budget problems have long predated it.
Since at least the 1970s, when the system struggled with crumbling infrastructure and anemic revenues during the city’s fiscal crisis, transit leaders have struggled to find ways to stabilize its finances. The system was saved from decay in the early 1980s when lawmakers allowed it to issue bonds. But the authority’s debt load exploded, and expenses have outpaced income.
What’s Next
A fare hike remains on the table for riders.
Transit leaders had contemplated raising the standard price of a New York City subway ride to just over $3 in less than three years, even if they got the bailout they sought from the state. That proposal would have seen the current $2.75 base fare rise to $2.90 by this year and to $3.02 in 2025.
The state deal will provide $65 million to reduce the first potential fare hike, which could bring the fare closer to $2.86 instead of $2.90. The authority’s chief financial officer has said that any fare changes would be preceded by public hearings and a board vote.
There has not been a fare hike since the start of the pandemic. The authority has raised fares about 4 percent every two years since 2009, but it put off a planned round of increases in 2021 because it wanted to lure riders back.
Grace Ashford contributed reporting
Source: The New York Times
