The MTA expects final approval sometime this year of so-called congestion pricing for midtown Manhattan, the plan to impose tolls on motorists driving into midtown, according to a report from New York State Comptroller Thomas DiNapoli.
The MTA believes that the congestion pricing plan would bring it about $15 billion a year in new funding. According to DiNapoli, the MTA does not expect to begin receiving any of the money until 2023.
The scale of tolls has not been determined, but various amounts have been floated from $1 to $15. Federal approval of the plan is needed and Biden administration officials have been favorable to the idea.
DiNapoli”™s report reviewed other funding sources for the MTA’s capital program and debt and found that it does not have the resources to fully fund its $54.8 billion 2020-24 capital program. DiNapoli found that while the MTA expects to get $10.7 billion in federal support for the capital program, including $2.9 billion for the Second Avenue Subway, the new funding is not certain.
DiNapoli reported that the $54.8 billion 2020-24 capital program is the MTA”™s largest ever but instead of committing the intended $13.5 billion to projects last year the MTA committed only $5.4 billion. For the program, only 100 of 517 projects were either started or completed.
“The MTA and its riders face difficult years ahead, despite recent federal relief that helped avoid drastic short-term budget cuts,” DiNapoli said. “The MTA”™s mounting debts and devastated revenue make it unlikely that it can afford all the work it planned. The numbers just don”™t add up. Either ridership and revenue must recover faster than the MTA expects, or the MTA must find new sources of income, or other financial support, to pay for additional debt service.”
DiNapoli reported that to cover the loss of revenue from fares and other sources during Covid, the MTA borrowed $2.9 billion to cover operating expenses.
DiNapoli found that in the past the MTA generally spent about 16% of its operating revenue on debt payments, but by 2024 debt service will eat up 23% of revenues. Debt service is projected to reach $3.8 billion by 2028, which is $1.1 billion or 42% percent more than in 2020.
DiNapoli also reported that last month ridership still was sharply down when compared with March 2020: down 65% on subways; 51% on buses; and more than 70% on commuter railroads.
DiNapoli”™s report found that if ridership does not return as expected by 2024, the MTA will face having to institute service cuts while also collecting higher fare and toll hikes than are currently planned.
