Gov. Kathy Hochul and the MTA would have to increase the cost of a subway or bus trip by 79-cents to recoup pre-pandemic revenue levels, State Comptroller Tom DiNapoli warned Tuesday.
With ridership hovering around 60% pre-pandemic levels, fare revenue is expected to rise to just 32% of the MTA’s operating budget by 2026 — compared to 44% before COVID-19, the comptroller’s office concluded in a new report.
Without new sources of funding — and in lieu of a sudden uptick in ridership — officials will be forced to enact severe service cuts and fare hikes, DiNapoli said.
“No one wants to see steep fare hikes or service cuts. However, it is unclear how the MTA will avoid these outcomes unless it lays out additional options,” he said.
A 4% fare hike is currently scheduled for next year and again in 2025, according to the MTA’s most recent financial documents. Officials would have to raise fares 19% on top of that to match pre-COVID revenues, DiNapoli said. The current subway and bus fare is $2.75; under the comptroller’s calculations, that price would rise to $3.54 by 2026.
Officials had planned to raise fares earlier this year, but Hochul provided state funding that allowed her appointed MTA leadership to delay such hikes “indefinitely.”
Ridership levels dropped over 90% in the initial weeks of the pandemic and are expected to remain as low as just 73% of pre-pandemic levels come the middle of 2026, according to the projections by consultants at McKinsey & Company.
A $15 billion cumulative infusion of federal cash over 2020 and 2021 temporarily secured the MTA’s budget — but only until 2024. The MTA’s budget is further hamstrung by over $40 billion in debt, which is pays off in part with money from rider fares, the report said.
MTA CEO Janno Lieber has warned that increasing fares could actually deter ridership — inadvertently reducing the transit authority’s fare revenue.
A rep for the MTA said DiNapoli’s new report “identifies serious issues that transit agencies across the country are facing, including the MTA.”
“We are committed to maintaining robust service for our riders and this report underscores that solving post-pandemic budget gaps with fare increases and service cuts alone is not an attractive option,” spokesman John McCarthy said in a statement.
