Metropolitan Transportation Authority (MTA) leadership has identified rising bus fare evasion as a significant factor contributing to the transit system's substantial looming deficits, a problem that will require Governor Kathy Hochul's attention to resolve.
Janno Lieber, the MTA chief, pointed to increased bus fare evasion, exacerbated by rhetoric supporting free bus services, as a key driver of financial strain. Data indicates that over 48% of bus riders are not paying their fares, a rate nearly five times higher than that of subway fare evasion. While uniformed and civilian enforcement had shown progress in reducing evasion rates prior to last fall, the issue has resurfaced as a concern.
This surge in evasion occurs as the MTA faces a significant budget shortfall projected to reach $22.8 billion by 2027. The authority's financial update revealed a 13% increase in next year's budget compared to two years prior. Projections indicate deficits could exceed half a billion dollars by 2028 and approach $900 million by 2030. "Structural cost pressures" are cited as a primary cause, with health benefits for workers and retirees alone increasing by 52% since 2019, totaling $3 billion in 2027.
Further complicating the financial picture are the costs associated with recent labor agreements and benefit expansions. The settlement of a recent Long Island Rail Road (LIRR) strike, which included a 3.8% annual raise for workers, undermines the MTA's goal of holding annual raises to 2% in ongoing negotiations with the Transport Workers Union. These increased labor costs could amount to nearly $200 million annually. Additionally, a decision to expand pension benefits for transit workers hired after 2008 will add an estimated $30 million per year.
The MTA is already anticipating revenue from fare and toll increases, including two 4% hikes over the next three years and an increase in the congestion pricing toll from $9 to $12 starting in 2028. However, these anticipated revenues are expected to fall short of covering the growing financial gap.
Governor Hochul is tasked with addressing the MTA's fiscal challenges through several key actions. First, she must publicly clarify that the concept of free bus services is not a viable option for the MTA, which stands to lose an estimated $1.1 billion annually if such a program were implemented. Second, to combat current fare evasion, the governor should oversee a concentrated effort by law enforcement and MTA civilian teams to ensure fare payment compliance on buses. This could involve directing additional NYPD resources if needed. Finally, the governor must hold firm on labor negotiations, ensuring any wage increases are tied to operational efficiencies and a reduction in issues like bus driver absenteeism that impact service.
Without these cost-containment measures, the revenue generated from congestion pricing and other tolls and taxes will not be sufficient to stabilize the MTA's budget, which already includes $12.4 billion in annual taxes and tolls.