Fare thee unwell.
The MTA has only figured out how to balance its budget through the middle of next year and may be forced to raise fares in July despite Gov. Kathy Hochul’s pledge earlier this week to delay fee hikes “indefinitely.”
MTA Chief Financial Officer Bob Foran said Wednesday the MTA’s current financial plan would require four percent fare increases every two years starting next summer.
Officials will have to make “hard, ugly choices” in order to keep fares static while avoiding massive deficits, Foran told MTA board members.
“We need additional revenues coming in,” he said. “We have to look at those hard, ugly choices of things that have to be done. The federal funds are a godsend, but they are a bridge to the future.”
Hochul and MTA Chairman Janno Lieber on Monday said the bipartisan infrastructure package just signed by President Joe Biden had allowed the MTA to delay fare hikes “at least six months.”
The budget framework presented by Foran and Deputy Chief Financial Officer Jail Patel on Wednesday showed officials have only figured out how to stave off fare hikes through “mid-2022” — and will lose $105 million as a result.
After 2022, “the plan’s balanced bottom-line is … contingent on fare and toll increases in ’22, ’23 and ’25, which contribute a total of $1.8 billion in revenue,” Patel said.
Come 2025, the MTA will have to borrow $1 billion to balance its budget, she said.
The MTA’s rocky finances have been in crisis since the start of the COVID-19, which annihilated revenues from rider fares and state taxes. Billions of dollars in federal aid have helped the transportation authority avert financial peril for now.
“We’ve been saying this since 2017. We have been structurally out of balance every year since then,” Foran said. “We’ve been saying we need additional recurring revenues coming in every year.”
Foran said the MTA’s “ugly choices” could include concessions from labor and “aligning our service to the public’s needs.” Lieber denied the latter would amount to service cuts.
He said called delaying fare hikes “a business decision” because higher costs could suppress ridership. While he conceded “small” fee increases in mid-2022 or later may still be in the table, he said he wants to move the MTA from relying on fares to make ends meet.
“Riders have choices. People are trying to figure out what’s their new pattern: Are they commuting to work? Are they staying at home [and] how frequently? We how do they reorganize their lives after COVID? We don’t want to do anything that discourages them coming back to transit,” he said. “We found out during COVID for New York [that] we’re like the police, we’re like fire department, we’re like sanitation. We’re an essential service that needs to be paid for – and it shouldn’t be on the backs of the riders.”