The MTA's new 2025-2029 investment plan must be submitted to the state legislature by Oct. 1, ramping up pressure to find funding.
The Metropolitan Transportation Authority (MTA) unveiled an ambitious plan to invest $65,4 billion over the next five years to improve infrastructure, buy thousands of new trains and renovate iconic locations like Grand Central Terminal. The project also aims to better protect stations and tracks from the increasing threat of extreme weather. However, the financing of this major renovation is a big question mark. Of the required $65,4 billion, $33,4 billion is still unmanaged.
outdated network
The MTA, responsible for New York City’s subway, bus and commuter rail systems, has been under pressure for years to maintain its aging network. The system is more than a century old, and the need for urgent repairs and modernization has long been recognized. According to Janno Lieber, the MTA’s CEO, these improvements are essential for both the safety of passengers and the economic stability of New York City. “I am confident that everyone involved recognizes the critical role of the MTA understands in our daily lives and takes this challenge seriously,” Lieber stated in a recent interview at Bloomberg.
Gov. Kathy Hochul acknowledged the challenges, especially with the current capital plan running a $15 billion shortfall, partly due to the suspension of congestion pricing, a toll system that was supposed to ease traffic in the city’s downtown. “We will thoroughly review the MTA’s proposed new five-year plan and fight for as much funding as possible,” Hochul said in a statement. She also said she will continue to advocate for more federal infrastructure money and work with city and state lawmakers to set priorities during upcoming budget negotiations.
These negotiations are crucial, as talks won’t begin until January, when state lawmakers reconvene. Meanwhile, the MTA’s financial situation is dire, with more than $47 billion in outstanding debt as of July of this year. While the proposed capital plan would inject significant resources into the system, experts warn that the MTA’s total infrastructure needs far exceed its enacted budget. The Citizens Budget Commission (CBC), a nonprofit that analyzes New York City and State finances, estimates that at least $115 billion is needed over the next five years to make essential repairs and improvements. That figure doesn’t include future expansion projects.
The future of New York City’s public transportation system hangs in the balance, and it will take a concerted effort from all levels of government to ensure the system is prepared for both daily crowds and the growing threat of climate change.
State Treasurer Thomas DiNapoli said the cost is slightly lower, according to Bloomberg reports. He estimates the MTA needs about $92,2 billion, including potential expansions. The MTA itself predicts that more than 90 percent of the proposed budget will go toward core infrastructure, with an emphasis on maintaining existing assets such as aging tracks, stations and power systems. Jamie Torres-Springer, head of the MTA’s construction and development department, emphasized the importance of these investments during a press conference. “If we don’t continue to invest in the health of a system that’s over 100 years old, we can’t continue to provide safe and reliable service,” he told Bloomberg.
financing gap
To finance the plan, the MTA is looking to several sources of revenue. Kevin Willens, the MTA’s chief financial officer, said the agency expects to raise about $14 billion in federal funds, $10 billion from bond sales, and possibly $4 billion each from the state and city. However, that still leaves a $33,4 billion funding gap. DiNapoli suggested that one possible solution would be to increase certain taxes, such as the payroll mobility tax, the business franchise tax, and the sales tax. He estimates that a 10 percent increase in these taxes could result in about $11,6 billion in new bonds.
In addition to finding new revenue streams, the CBC has MTA recommended further cuts. The organization argues that the agency could reduce its spending by $500 million per year and seek additional funding from direct contributions from the state and city. Further, increasing the payroll mobility tax to areas outside the city limits, along with further increases in fares and tolls beyond the planned 4 percent increase, could provide a solution. As the MTA Board prepares to vote on the capital plan on Sept. 25, everyone is watching with bated breath to see how state and city leaders will address the funding gap.
