Day: July 29, 2026

The MTA faces growing projected budget gaps over the next four years amid ballooning health care and fuel costs that come as it struggles to regain the level of farebox revenue it enjoyed prior to the coronavirus pandemic, according the agency’s July budget update released on Wednesday.

MTA officials, during a presentation at the agency’s July board meeting, said that while the transit authority’s budget remains balanced in 2026, it is projected to go further and further into the red over the next four years. They also revealed that the agency’s 2027 preliminary budget stands at $22.8 billion.

Officials said the MTA is facing out-year gaps of $295 million in 2027, $507 million in 2028, $707 million in 2029, and nearly $900 million in 2030 — all far exceeding the deficits the agency projected in its November financial plan last year.

“Deficits are starting to return in 2027,” MTA Chair and CEO Janno Lieber said during the meeting. “They’re not huge at first, but they’re increasing thanks to factors outside the MTA’s control.”

Jai Patel, the MTA’s chief financial officer, outlined a handful of expenses that are driving the cost increases. She said health care benefits for current employees and retirees are projected to increase by more than 100% between 2019 and 2030 — nearly 10% a year.

Electric power costs have risen by 71% and paratransit costs soared by 135% over the same period, Petal said. The MTA’s one-year deal with five unions representing roughly half of the Long Island Rail Road workforce, who went on strike before reaching that accord in May, also contributed to the agency’s growing expenses.

But Lieber insisted that the deal, even accounting for the fact that it sets a new bargaining pattern for its other unions, is not the driving force behind the MTA’s fiscal headwinds.

“Long-term cost growth is concentrated in a key number of rapid growth areas, not across the MTA’s operating budget,” Patel said. “Understanding that distinction is critical because these categories are primarily driven by underlying economic, contractual, and service-delivery factors, making them fundamentally different from the day-to-day operational costs that management can improve through efficiencies.”

As expenses have gone up, Petal said, farebox revenue has fallen short of its anticipated levels by $30 million or 1%. Farebox revenue is only increasing by 2% each year, Petal said, which falls far short of the rate by which the expenses she highlighted are going up. 

“You just can’t make up that growth in revenue on the farebox side,” Patel said.

The category is on pace to make up just 26% of the agency’s revenue for this year, a steep drop-off from the 40% farebox revenue accounted for pre-pandemic. It still sits below pre-pandemic levels at 85%, Patel said, and will likely take 10 years to reach 2019 levels.

One bright spot that officials highlighted was that the agency achieved roughly $75 million in savings through “efficencies” in 2026.

Lieber, however, made clear that while the deficits are cause for concern, they do not represent the fiscal “tsunami” the agency went through after the pandemic, which was averted by a 2023 state government bailout.

“The pandemic may have been a one-time fiscal tsunami, but what we’re seeing now is the reemergence of a disalignment between some of these uncontrollable costs…Healthcare and fuel and paratransit are the three biggest ones that I highlighted. So I’m not. I don’t think of it as a tsunami,” Lieber said. “I think of it as a slow-moving event.”