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Comptroller Releases MTA Financial Outlook

September 23rd, 2019

This week, Comptroller DiNapoli released a report on the financial outlook of the MTA. According to the report, the MTA’s latest financial plan projects budget gaps that grow from $392 million in 2020 to nearly $1.6 billion in 2023. These estimates, however, already assume successful implementation of the MTA’s proposed budget reduction program. Excluding that program, the gaps are much larger, growing from $705 million in 2020 to $1.9 billion by 2023. The report also concludes that the MTA has large unfunded capital needs as well. New state resources for the MTA’s capital program, such as congestion pricing, and federal funding are expected to contribute $32 billion to the MTA’s 2020-2024 capital program, but additional funding will still be needed to modernize the subway system.
The report also found the following:
  • Even before taking into consideration the next 5 year capital program, outstanding debt is projected to reach $41.8 billion by 2022, an increase of 19 percent from 2019.
  • Debt service would increase by 31 percent, exceeding $3.5 billion by 2023 when debt service will represent nearly 20 percent of total revenue.
  • As of June 2019, the MTA has committed just 65 percent of the funds for its 2015-2019 capital plan and finished just 25 percent of its projects.
  • Overtime grew by 143 percent between 2010 and 2018, reaching a record of nearly $1.4 billion, which exceeded the MTA’s initial forecast by more than one-third ($396 million). The MTA expects overtime to fall by $255 million to $1.1 billion this year, but that is still $123 million more than it projected at the beginning of the fiscal year.
  • Health and welfare costs for MTA employees and retirees rose 34 percent to $1.8 billion from 2013 to 2018. MTA expects these costs to further increase by 41 percent by 2023.
  • Despite record job growth in NYC, annual subway ridership has fallen for three consecutive years (2016-2018) to 1.68 billion, although it has held steady through May 2019.
  • Weekday on-time subway performance fell from 87.7 percent in 2010 to 63.5 percent in 2017, the lowest since 1991. Through the MTA’s Subway Action Plan and Save Safe Seconds campaign, on-time performance improved to 79 percent through July 2019. On-time performance on lettered lines has lagged behind the numbered lines. The MTA reports that weekday on-time performance reached 84 percent in Aug., up from 69 percent in Aug. 2018.
  • LIRR’s reported on-time performance, which had slipped to 90.4 percent by 2018 — its worst level in 22 years — has improved in 2019, averaging 93 percent through July.
  • Metro-North’s reported on-time performance also improved in 2019 after recent declines, to 94.8 percent through July.
Comptroller DiNapoli said:
“This is a critical moment for the MTA and for riders. As everyone agrees, the MTA needs to transform itself into a more efficient organization, improve service and modernize the system. The right choices and effective implementation are crucial, and transparency and openness with all stakeholders is essential. If it fails, the consequences could be felt for years to come, and riders could face reduced services, unplanned fare hikes, and deterioration of the system.”