State Comptroller Thomas DiNapoli: MTA finances look good but risks lurk

The MTA is on better financial footing than it has been in years, according to a new state report, but is still facing major obstacles that could reverse its recent progress, including overtime costs that could be $200 million higher than expected this year.

State Comptroller Thomas DiNapoli’s annual report on the MTA’s financial outlook identifies several other financial risks, including from a potential recession and a slower-than-expected return of riders following the COVID-19 pandemic.

But, DiNapoli said in a statement, an influx of new funding should help the agency provide a “safe, clean, and on-time transit system that riders want to use.”

The report noted that the MTA’s fiscal outlook, which includes a balanced budget through 2027, is a “remarkable change from the dire state” of the transit authority’s finances earlier this year, when it was facing a $1 billion deficit in 2024.

A state bailout that included an increase in payroll taxes paid by New York City employers generated an extra $1 billion in revenue for the MTA. And a fare and toll increase approved in July — and similar hikes planned in 2025 and 2027 — are also helping shore up the MTA’s finances, according to the report.

Asked for a response to DiNapoli’s report, MTA officials pointed to recent remarks by the agency’s chairman and CEO, Janno Lieber.

“While transit agencies nationwide are struggling with impending financial crises, the MTA has five years of balanced budgets and is adding, rather than cutting, service for New Yorkers,” Lieber said in a statement Tuesday.

But risks remain, including from the MTA “underbudgeting for overtime.” The report noted that, through August, the MTA spent $750 million on overtime — $145 more than what it budgeted.

The MTA is on pace to exceed its annual overtime budget of $927 million by $200 million. To meet its projection, it would have to reduce its average monthly overtime costs by more than half, according to the report.

Also putting pressure on the MTA’s operating budget is the uncertain future of its congestion pricing toll plan, the report found. The agency is counting on having the new Manhattan tolls in place by mid-2024, but the report noted that potential delays in implementation — including from a pending court challenge by the State of New Jersey — could force the MTA to look elsewhere to pay for infrastructure projects, “reducing funding for operating needs.”

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

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.