Skip to Content
Streetsblog New York City home
Streetsblog New York City home
Log In
Economics

The Biggest Fare Hike Factor? It Could Be MTA Debt

mta_debt.gif

Saturday's Times delved into the history of the MTA's mounting debt burden, which, along with rising fuel costs and plummeting revenues from the real estate transactions tax, has severely squeezed the authority's finances:

Debt payments are the system’s largest single cost after payroll, andby 2012 they will account for one of every five dollars the authorityspends.

The problems facing the agency now are no surprise. Independentanalysts and the agency’s own financial planners have warned of risingdebt costs for years -- most loudly and urgently after a huge debtrestructuring in 2000.

Called at the time the largest deal inthe history of American municipal finance, the refinancing -- takingadvantage of lower interest rates -- led to lower debt payments. Theagency, facing political resistance to fare increases and new taxes,decided to sell new bonds to finance the system’s first major expansionsince the 1930s. In a few short years, the debt burden it had amassedover nearly 20 years had doubled.

Before the debt restructuring, the article notes, state and city contributions to the MTA capital budget fell to historic lows during the 1990s, causing the authority to rely more on borrowing.

When former MTA chairman Richard Ravitch proposed the authority's first bonds, issued in 1982, the cash made possible investments that revived a transit system in crisis. Now all eyes are again fixed on Ravitch, appointed by Governor Paterson to find a way out of the MTA's current funding woes. With the state and city facing budget crunches of their own, where might the money for transit come from?

Graphic: New York Times

Stay in touch

Sign up for our free newsletter

More from Streetsblog New York City

Friday Video: Meet the Subway’s Straphanger-Free Trains

We've all seen them. Now, thanks to YouTube's "Half as Interesting," we can tell you the purpose of each one.

October 3, 2025

The MTA Is Headed To The Lab To Design The Ridgewood Busway

A filthy private road underneath the elevated M tracks could become a gleaming bus-first corridor.

October 3, 2025

Friday’s Headlines: Good News Edition

The Department of Transportation reports that traffic deaths are way down through the first three quarters of 2025. Plus other news.

October 3, 2025

‘Bean-Counting Street Safety’: Advocates Blast Gale Brewer’s Daylighting Flip-Flop

The Upper West Side pol's inconsistent safety record is getting a second look from activists who once supported her.

October 2, 2025

There’s Good Science Behind the Human Craving for Livable Streets

It's time to understand the science of pedestrian-friendly cities. Or, why streets should be designed like gardens.

October 2, 2025

Thursday’s Headlines: Mourning Becomes Enforcement Edition

Why were cops ticketing cyclists at the very intersection where a bike rider was killed by a driver on Saturday? Plus other news.

October 2, 2025
See all posts