The Metropolitan Transportation Authority expects its balanced $21.9 billion operating budget to give way to steadily larger deficits, reaching $897 million in 2030, as health care, benefits and other costs outpace revenue growth.
State Comptroller Thomas DiNapoli’s annual financial outlook, released Oct. 22, identifies savings, paid ridership and an unresolved labor contract as central to keeping the transit authority financially stable. Its review of the MTA’s July financial plan projects gaps of $295 million in 2027, $507 million in 2028 and $707 million in 2029 before the larger 2030 shortfall.
Costs rise faster than expected revenue
The gaps have widened despite stronger tax collections and progress on savings. Operating expenses are projected to increase 3.4% annually from 2027 through 2030, compared with 2.1% annual growth in revenues. That revenue forecast already assumes fare and toll increases in 2027 and 2029 that have not been approved.
Health care, pensions and benefits, energy, debt service and paratransit are expected to grow about 5% annually from 2026 through 2030. By the end of that period, these largely non-discretionary expenses would account for more than half of operating costs.
The Transport Workers Union contract expired in May, and a replacement agreement remains unresolved. The authority has lost more than 1,000 operations and maintenance workers since early 2026, while overtime costs remain a concern. A negotiated settlement would help clarify future spending, the report says.
The MTA reported $396 million in savings in 2025 through a program intended to reduce costs without cutting service. Its target rises to $750 million by 2029. DiNapoli urged continued monitoring of revenues and expansion of savings efforts as management addresses pressures within its control.
Other assumptions depend on decisions beyond the authority. Delays opening two casinos anticipated in 2030 could put $160 million of that year’s expected $300 million in gaming tax revenue at risk. Federal funding decisions, fuel prices and tariffs add uncertainty.
Paid ridership remains central to recovery
The financial plan assumes systemwide ridership will reach 74% of its 2019 level in 2026. Recovery varies sharply: the Long Island Rail Road is projected at 97%, Metro-North at 87%, subways at 78% and buses at 60%.
Fares and tolls covered more than half of operating costs before the pandemic, compared with 34% in 2025. The MTA projects that fares will supply 26% of revenue in 2027 and tolls another 12%, leaving the authority more dependent on taxes and subsidies.
Bus fare evasion has moved in the opposite direction from the authority’s recovery goals. The MTA estimated that 49% of bus passengers did not pay in the second quarter, up from 45% a year earlier. The comptroller estimated that a 10 percentage point reduction in evasion in 2026 could generate up to $150 million in additional bus revenue.
Customer surveys show both progress and setbacks. Subway satisfaction rose from 47% in spring 2024 to 63% in spring 2026, while satisfaction with local, limited and select bus services reached 64%. LIRR satisfaction fell to 73% from 81% a year earlier, and Metro-North fell to 79% from 87% the previous fall. The report connects the commuter rail declines to fare increases and ticket policy changes.
A separate April comptroller report found that weekend travel had recovered more strongly than weekday commuting. In 2025, weekend LIRR ridership reached 127% of 2019 levels, compared with 92% for Metro-North, 89% for subways and 67% for buses. It recommended reassessing service availability against changing travel patterns.
Capital projects carry debt and federal funding risks
The $68.4 billion 2025-2029 capital program had $9.2 billion in commitments and 38 of 485 projects completed at the time of the review. The preceding $55.4 billion program was 74% committed, with 454 of 1,042 projects finished. The 2015-2019 program was 92% complete.
Total outstanding debt is projected to rise from $45.3 billion in 2025 to $88.9 billion in 2033. Annual debt service, including borrowing backed by dedicated capital revenues, could reach $6.9 billion in 2034, more than twice the 2025 cost. Dedicated capital accounts separate some debt payments from the operating budget, reducing pressure on day-to-day service.
The capital plan assumes $14 billion in federal support. The report warns that lower funding levels could leave at least a $750 million shortfall over the final three years of the program. Additional borrowing to cover that gap could add $50 million in annual debt service by 2033.
The MTA also estimates tariffs could add $1 billion to train car and bus replacement costs. Borrowing that amount could add $65 million in debt service by 2033; the authority has indicated it could instead seek efficiencies or buy fewer vehicles.
DiNapoli urged the MTA to avoid deferring principal payments in ways that shift costs to future years. The report supports level debt payments for the newest capital program and calls for sustained savings, reliable service and a labor agreement to preserve the authority’s near-term stability.
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