DiNapoli: MTA Fiscal Outlook Continues To Improve but Uncertainties Tied to Federal Actions Cloud Future

The stability of the Metropolitan Transportation Authority's (MTA) finances is increasingly reliant on its ability to find significant savings, grow ridership, and efficiently execute capital improvements, according to State Comptroller Thomas P. DiNapoli's annual review of the authority's fiscal outlook. These efforts have taken on heightened importance as federal threats over capital funding cloud future investments, which could force the Authority to make difficult choices between balancing debt levels with maintaining the system in a state of good repair.

"The MTA's budget is currently balanced, but outyear gaps persist as the Authority faces substantial fiscal uncertainties, led by funding threats from the federal government," DiNapoli said. "It's imperative that the MTA stay focused on improving the system and bringing riders back, which is one of the surest ways it can help stabilize its fiscal outlook at the farebox, and by following through on its savings initiatives."

Operating Budget Gaps

As the MTA navigates several budget risks, it has been able to reduce the size of outyear gaps over the past year, but it still estimates them at $345 million in 2027, $354 million in 2028, and $428 million in 2029.

The MTA's financial plan is reliant on some revenue streams that are outside its ability to control, including reimbursements from the Federal Emergency Management Agency (FEMA) for Covid expenses and casino licensing revenue. DiNapoli's report estimates that delays, reductions or loss of those two revenue sources could open up a budget gap of $800 million in 2026. FEMA recently delayed reimbursements for Covid expenses in federal fiscal year 2025 and has suggested it could cancel the distribution of these funds altogether, which would open up $300 million in budget gaps this year, creating immediate pressure on the Authority's finances.

Two areas where the MTA can more directly manage its budget are increasing farebox revenue by bringing back riders and by closely monitoring its savings programs. In the July Plan, fares and tolls are already expected to bring in $205 million more than initially forecast over four years. The July Plan also assumes a fare and toll increase will go into effect in January 2026, pushed back from the initial start date of August 2025. The MTA is implementing initiatives to generate $500 million in annual savings, but must reach this target to maintain balance; it can also continue to identify new savings to propose and implement. Paratransit costs, which have risen substantially in recent years, may be one area to review for additional savings.

Capital Budget

DiNapoli has called on the MTA to be clear about its capital project priorities, both due to uncertain federal support and the need to accelerate financing to meet the ambitious goals of its $68.4 billion 2025-2029 capital program.

Through the first eight months of 2025, the MTA had committed $9 billion to capital needs, nearly on pace to reach its annual capital commitment target for the year. A significant portion of this, about $6 billion, was for major commitments, including rolling stock purchases and extending the Second Avenue Subway and the MTA looks on pace to reach its goal of committing $12.6 billion this year. Meeting this goal is important because projects that improve the safety, frequency, and reliability of service help increase paying ridership.

Cuts to federal transit formula funding could put a $4 billion hole in MTA's capital budget. The federal government has also put nearly $7 billion in funding for the Second Avenue Subway Phase 2 under review, however, the project is subject to an existing federal funding grant agreement. Questions over congestion pricing, which is expected to provide $15 billion for the Authority's 2020-2024 capital program, are currently being litigated.

If these funds were to be cut, the MTA could issue additional debt, find further capital project efficiencies or postpone or cancel these projects. The MTA has taken steps in recent years to reduce the impact of its debt load on its operating budget, including leverage capital lockbox funds, and this progress could be at risk.

Ridership

In 2024, combined system ridership was 68% of what it was in 2019. Paid subway ridership, however, has exceeded MTA's growth projections, reaching 76% of the pre-pandemic level in July 2025, above the 73% expectation for that month. One factor that may have played a role in the increase is that 75% of riders reported on MTA's June 2025 monthly customer survey that they felt safe on trains and in stations, far above the 45% who said they felt safe in March 2024.

MTA expects a gradual return of subway riders that will reach 77% of pre-pandemic ridership in 2029. Subway ridership is also very uneven across the city, with stations in the Bronx, Upper Manhattan and outer Brooklyn lagging others. DiNapoli monitors and provides subway ridership figures by station, which are available on the Comptroller's Subway Ridership Dashboard.

Buses continue to be slower in paid ridership recovery, although the MTA has made progress in combating fare evasion on buses, with paid bus ridership at 68% of 2019's level in July, up from 60% in September 2023. Fare evasion, however, continues to cut significantly into MTA revenue.

Commuter rail has recovered faster with Long Island Rail Road expected to reach 90% of pre-pandemic numbers and Metro-North Railroad 83% in 2025.

Report
Financial Outlook for the Metropolitan Transportation Authority

Related Work
Subway Ridership Dashboard
Trends in New York City Subway Delays
Annual Update: Metropolitan Transportation Authority Debt Profile