Tighten the belt, cut the frills, crack down on lawbreakers and raise every fee that isn't nailed down — and then you'll still only be about halfway there.
That's the dire warning from the Citizens Budget Commission, which wants Gov. Hochul and state legislators to cut $17 billion from the $33.4-billion hole in the MTA's 2025-2029 capital budget by abandoning the proposed Interborough Express, among other expansion plan. And on top of that $3.6-billion savings, the CBC wants lawmakers to increase the city and state's contributions from $3 billion each by another $7 billion from the state and $2 billion from the city.
And on top of that, the business-aligned CBC says the state must raise fares, raise tolls and increase vehicle registration fees by 6 percent as opposed to the planned 4 percent — to bring in another $6.8 billion.
All that would still leave a $16-billion funding shortfall. To fill that, state leaders could use a combination of increased taxes, labor cost efficiencies, a crackdown on fare evasion and regulatory changes to lower capital costs, according to the report, "All Aboard: How to Fairly Fund MTA Capital Investment Now."
"Anybody who thinks that the choices are easy is kidding themselves," CBC President Andrew Rein told Streetsblog. "The system is in such a bad state of repair that it needs a massive investment."
On Thursday, Assembly Speaker Carl Heastie indicated state leaders were considering tax hikes — or "revenue raisers," in his words — to fund the gap, Politico reported. Hochul's office specifically proposed a payroll tax hike on New York City employers for the second time in three years, according to Gothamist.
The pressure on state coffers is even more intense as the Trump administration seems disinclined to give liberal, Democratic-controlled states any money. The MTA expected $14 billion in federal grants for the 2025-2029 capital plan — if that money doesn't come through, the funding gap will be even larger.
In its report, the CBC emphasized the need to fund the plan as soon as possible — since any funding delays will increase costs. But that revenue should be generated "fairly among ... different constituencies," Rein said.
Aside from raising taxes, the MTA could try to cut costs of MTA capital projects via regulatory changes, the report suggested. It could also negotiate sacrifices from organized labor or work harder to reduce fare evasion.
The latter two could help close the MTA's forecasted operating budget deficits — easing the agency's ability to use operating revenue to pay back the $10 billion in debt in plans to take on through transit revenue-backed bonds.
The average MTA worker worked 196 days in 2023 — down from 206 in 2019 — which requires the agency to spend more money on overtime wages. The CBC estimates the MTA loses $800 million per year to fare and toll evasion.
"We're talking about flexibility from labor. That's not about lowering wages, that's about increasing productivity," said Rein, edging close to toeing one of the crackling third rails of state politics.
Hochul's plan to raise the payroll tax on only New York City employers goes against the recommendations in the CBC report to "regionalize" taxes currently applied exclusively or primarily to New York City. That could raise another $300 million per year to borrow another $4.8 billion for the capital plan, the report said.
Still, with so much of the plan unfunded, expansion may simply have to wait.
"We have to prioritize state-of-good-repair, basic modernization, and delay some of the system expansions," said Rein. "Expansions can be beneficial, but we can't have them at the cost of the system crumbling."
Hochul has made the Interborough Express a key piece of her transit agenda. The proposed light-rail would link Bay Ridge and Jackson Heights via an existing 14-mile freight line, and serve an estimated daily ridership of 115,000, according to MTA estimates.
But the first Brooklyn-Queens transit expansion in decades "would draw capital resources from urgent state of good repair and modernization work that should take priority to keep the system functioning safely and reliably," the report said.
The MTA, which proposed its $68-billion capital plan in 2024 under very different political circumstances, said it welcomes the CBC's ideas.
“We agree with the Citizens Budget Commission’s assessment of the MTA’s capital investment needs and appreciate their thoughtful proposals," MTA Chief of Policy and External Relations John J. McCarthy said in a statement.
It's not that the CBC opposes the MTA's funding priorities — in fact, the report called the original capital plan price-tag "reasonable" given how much it hoped to accomplish.
But restraint is the new order for the new day, the CBC argued, given that Albany leaders in the past kicked the can down the road when faced with funding the MTA capital plan.
Ex-Gov. Cuomo did not fully fund the 2015-2019 capital plan under until the 2016 budget cycle — resulting in the "Summer of Hell" subway service crisis. After that, Albany got its act together and fully funded the 2020-2024 MTA capital plan with congestion pricing, but that toll revenue doesn't apply to the 2025-2029 plan (and, besides, it's now under threat by the Trump administration).
MTA Co-Chief Financial Officer Jai Patel on Thursday warned City Council members that service will decline precipitously if Albany doesn't figure out a way to fund the transit system's maintenance needs.
“Many components are falling apart and need to be replaced or preserved," Patel said, according to the New York Post. “If we don’t do this critical work it’s not an exaggeration that we will be looking at another ‘Summer of Hell.’”
