MTA's long-term borrowing could fuel fare hikes, comptroller's report says
Two years after the coronavirus outbreak, LIRR weekday ridership remains below 60% of pre-pandemic levels. Here, a commuter purchases an LIRR ticket at Penn Station in 2019.
Credit: Charles Eckert
The MTA’s debt level has risen by 55% since 2010, and is expected to grow another 43% over the next eight years to more than $57 billion — an amount that could put pressure on the agency to further raise fares and cut service, according to a new report.
The report released Tuesday by the office of State Comptroller Thomas DiNapoli examines debt at the Metropolitan Transportation Authority, which relies heavily on long-term borrowing to finance infrastructure initiatives, including at the Long Island Rail Road.
According to the report, the amount of long-term debt issued by the MTA increased from $25.8 billion in 2010 to $40.1 billion in 2021, and could reach $57.4 billion by 2030.
About 20% of the MTA’s annual revenue, including from fares and tolls, already goes to paying off debt, the report said. That debt payment figure is expected to reach $4.3 billion by 2031 — $1.5 billion more than in 2021. The MTA's goal is to keep debt its annual debt burden at around 18% of its revenue spending.
Borrowing further “will strain the authority’s operating budget,” especially considering the decline in ridership since the COVID-19 pandemic began, the report said.
“Unless ridership returns faster than expected, or additional State or City support for the operating budget is identified, the MTA may have to resort to other measures,” the report said. “This may include higher than planned fare and toll increases, service cuts or adjusting capital investments, putting the system’s state of good repair and resilience at risk.”
Two years after the coronavirus outbreak, LIRR weekday ridership remains below 60% of pre-pandemic levels. DiNapoli’s report noted that, using $14 billion in federal COVID-19 stimulus funds, the MTA expects to be able to balance its books through 2025, but might look to borrow further to fill a projected $2 billion budget deficit by 2026.
In a statement, MTA spokesperson Aaron Donovan said the report “speculates on a potential future situation and possible future solutions.”
“The MTA has always strived to find and achieve financial efficiencies and will continue to do so,” Donovan added.
The report commended the MTA for setting goals to reduce borrowing, from $2.9 billion in 2020 to $499 million in 2025. “To its credit, the MTA . . . has recently noted that deficit financing is a last resort while stressing the need to find alternative ways to close its budget gaps,” the report said.
The MTA on Monday announced another initiative aimed at strengthening its finances. The agency’s chairman and CEO, Janno Lieber, at a Manhattan meeting of A Better New York — a business group — revealed the creation of a 12-member “blue ribbon panel” to combat fare evasion.
MTA officials said that subway fare evasion has grown in recent years from about 3% of riders to more than 12%. In 2018, the LIRR estimated that it lost about $20 million annually to fare beaters.
“This is a really significant challenge. Obviously, it hits us in the farebox,” Lieber said. “Equally important, I would argue, fare evasion tears at our social fabric.”
MTA officials said the members of its “fareness panel” will review different ways to address fare beating, with a focus on education, equity and enforcement. The panel will partner with district attorneys in New York City to “seek a uniform five-borough approach to what will and won’t be charged and under what circumstances.”
Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.
