Hochul punts on new MTA revenue source amid threat of big fare hikes


The MTA needs $600 million this year to avoid draconian cuts to mass transit service in New York — but how Gov. Kathy Hochul will fill that budget gap remained a mystery Tuesday after her State of the State speech.

During her address to the state Legislature presenting her agenda for 2023, Hochul said, “the MTA is the lifeblood of the New York City metro region, and we’ll continue to invest in and ensure its long-term fiscal health.”

Hochul’s office added in a separate briefing that the governor was working with city, state and federal lawmakers on “a comprehensive set of solutions” for the agency.

A spokesperson for Hochul said additional funding details will be included in the governor’s executive budget, which is due Feb. 1.

State Assemblymember Zohran Mamdani, who represents part of Queens, said he was “dismayed by the lack of policy” about the MTA in Hochul’s speech.

“In her silence on addressing the MTA’s operating deficit, Gov. Hochul leaves the possibility of fare hikes and service cuts on the table. This will be the reality if she refuses to invest even the bare minimum in the MTA,” Mamdani said.

Without new funding sources, MTA officials have warned major service cuts, layoffs and steep fare hikes are possible. The agency last month said it expects to raise transit fares 5.5% this year, but the increase could be even greater without funding to fill the gap.

Nicole Gelinas of the Manhattan Institute said Hochul’s omission in her speech of an MTA funding plan “sounds like a statement from a junior partner relative to the Legislature and the city.”

“It is the governor’s job to come up with a specific solution and sell that solution to the Legislature,” Gelinas wrote in an email. “Otherwise, the Legislature is going to create its own ideas in a vacuum.”

Transit officials approved a budget for 2023 that relies on $600 million of new revenue this year to balance the books. The agency will need an extra $1.6 billion in new revenue by 2026 to stay afloat.

The new revenue stream is necessary to replace money from fares, which have plummeted since the pandemic. Mass transit ridership in New York is down by roughly 40% from 2019.

In October, state Comptroller Thomas DiNapoli sounded the alarm about the fiscal cliff the MTA faces. He wrote that if only 73% of pre-pandemic riders return by 2026, the MTA could face a $4.6 billion operating deficit without new funding sources.

During her speech on Tuesday, Hochul announced plans to rezone for more housing near subway and commuter railroad stations to boost ridership in the long term.

Congress in 2020 and 2021 approved a combined $15.1 billion in COVID-19 relief to keep the MTA afloat — but agency leadership anticipates that money will dry up by the end of 2024.

“We want to leave it to the governor to show a path to address those concerns, and then we’ll all work with the legislature to see what is a workable plan,” MTA chairman Janno Lieber said following Hochul’s speech. “We don’t want to cut service to people who rely on the MTA every day of the week because people in more affluent neighborhoods are riding a little less because they can telecommute or remote work or they’re dialing it in from Telluride or East Hampton.”

Transport Workers Union President John Samuelsen, who represents a majority of the MTA’s workforce, said he expects the governor and Legislature to approve new funding for the MTA through the state budget due April 1.

“If there’s not specificity in the budget we’ll have to figure out what to do about that,” said Samuelsen.

He suggested the MTA could use revenue from its congestion pricing program that’s expected to toll motorists who drive south of 60th Street in Manhattan next year. The program is required by state law to generate at least $1 billion a year – but only for MTA construction projects and mass transit upgrades.

The Legislature would need to pass new legislation to allow the MTA to use the money from congestion pricing to cover the agency’s day-to-day operating costs.

“During this time of crisis, it only makes sense that if congestion pricing comes along that the money be able to be flexed into the operating budget to mitigate against this, hopefully, short-term crisis,” said Samuelsen. “When they’re about to embark on service cuts, I think people will be lining up to say, ‘let’s flex this capital money into the operating budget.'”

Jon Campbell contributed reporting to this story


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