MTA to cut its deficit by $2 billion

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(The Center Square) – New York’s Metropolitan Transportation Authority on Wednesday passed a 2023 budget, which will cut its deficit for the year by $2 billion, and enact the first fare increases in nearly four years.

However, one state official continued to raise questions on how the agency would cover the remaining $600 million gap.

The looming financial crisis has been discussed by leaders of the state-run transit agency, and other officials for months. While the MTA received billions in federal COVID-19 relief funding, ridership numbers have not returned to pre-pandemic levels. As a result, the MTA was eyeing budget deficits of $2.6 billion next year, and deficits approaching $3 billion for the three years after that.

The budget the MTA Board approved Wednesday assumes $600 million in new dedicated funding and projects, a need for double that starting in 2024. If a new revenue stream isn’t found, the Board would be forced to take other actions, which may include service or staffing cuts.

“The ridership trends that have emerged post-COVID have created a fiscal cliff higher and earlier than previously anticipated,” MTA CFO Kevin Willens said. “The much-needed federal aid the MTA received from three COVID-relief packages has enabled a reduction in deficits in the immediate future. However, beginning in 2023, we need new dedicated revenue streams to ensure that essential transit service remains at the levels riders expect.”

The agency approved a 5.5% fare hike set to take effect next June. MTA officials expect that to generate about $373 million in revenue. Another fare increase would likely happen two years later.

In a statement after the MTA Board vote, State Comptroller Thomas DiNapoli said the agency’s deficits create pressure to find new public funding sources, and for it to do a better job of finding opportunities to save money.

“As the MTA balances riders’ needs with its savings plans, it must communicate directly with the public on the impact these measures will have on straphangers and commuters and on its budget,” DiNapoli said. “We need the MTA to continue to provide service that meets demand if we hope to continue our regional recovery and increase ridership to return to a fiscally sustainable path.”

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