MTA will have more capital needs than funds, state comptroller says

The New York Metropolitan Transportation Authority has been coping with a capital fiscal cliff since June, when Gov. Kathy Hochul canned congestion pricing, and the toll revenue that was supposed to fund $15 billion of projects.

But that's just the beginning of the authority's capital shortfalls, according to New York State Comptroller Thomas DiNapoli. 

A new report from his office suggests the MTA's capital needs outweigh its available funding by roughly $20 billion dollars — beyond the $15 billion funding gap Hochul created. 

The report, published Thursday, found the MTA's capital needs over the next five years range from a low estimate of $57 billion to a high of $92 billion, and its available funding ranges from $30 billion to $71 billion. Those totals did not include any of the projects in the current capital plan. The agency's 2025-2029 capital plan is due on Oct. 1. 

The MTA has finished less than half of its $55.5 billion 2020-2024 capital plan. After New York Gov. Kathy Hochul canceled congestion pricing in June, the agency created an interim capital budget for state-of-good repair projects that covers $12 billion of the $28.5 billion of remaining work.  

The agency will have to decide whether to include the remaining capital projects in its next capital plan, and whether to include congestion pricing revenue in its budget projections.

Funding needs
State of good repair projects usually make up the majority of the MTA's capital needs. DiNapoli determined the agency will have at least $37.3 billion of state of good repair projects from 2025-2029. 

That figure could increase to $55.2 billion if the MTA decides to do certain work sooner, or pushes other projects back long enough that the price expands. 

The agency will likely need to replace between 1,100 and 1,725 of its more than 6,600 subway cars during the next capital plan, which will cost between $8.4 billion and $16.5 billion, the report estimates. The agency will also replace buses, which will cost around $3.5 billion if some buses run on natural gas, and $4.5 billion if it uses the planned all-electric fleet. 

Office of the New York State Comptroller

The report also included accessibility projects that the MTA committed to in a lawsuit and some expansion projects, for which it already has funding. 

Funding sources
The MTA can safely expect at least $7 billion from the federal government, the report found, and up to $14.7 billion if the feds adjust their funding formula or chip in for expansion projects. 

New York City is also required by the state to give the MTA between $2 billion to $4 billion, the report said. 

New York State, the agency's biggest source of funds, is more complicated. The state has several taxes and subsidies that support the MTA, and has increased them according to the MTA's needs. The MTA could expect as much as $29 billion from New York, DiNapoli's report suggested; he also included a low state funding estimate of $8.8 billion, in which the state would cut funding to its smallest contribution from the last five capital programs. 

According to the law, the state will implement congestion pricing tolls and give the MTA $1 billion per year. But, although Hochul claimed she "paused" the congestion pricing program, she has made many comments suggesting that she wants to lower the amount of tolls or find a new source of funding for the MTA altogether. In lawsuits, her lawyers' filings said the tolls should be decided "at the voting machine." 

There's also a chance that, if former President Donald Trump wins November's election, he will rescind federal approval for congestion pricing. 

Even without congestion pricing, the state will likely try to fill the MTA's budget gap. New York currently has five taxes that fund the MTA, which, if raised by 10 percent, could generate an additional $720 million of revenue. 

MTA could raise up to $3.5 billion of its own revenue through fare hikes, selling assets, and limiting fare evasion. 

Depending on the above, the MTA could afford to issue $12 billion to $21 billion of bonds, the comptroller's report said.