New York’s transit system needs $115 billion in repairs and improvements

(Bloomberg) — New York City’s transit system should prioritize repairing its current infrastructure rather than investing in expansion projects, a new report from a fiscal watchdog group recommends. That’s because the Metropolitan Transportation Authority’s total capital needs amount to about $115 billion, far exceeding available funds.

The MTA runs the city’s subways, buses and commuter rail lines and is working on a 2025-2029 capital budget to modernize a system that is more than 100 years old.

The size of that spending plan would be about $62.4 billion and would be spent solely on keeping its assets in reliable operating condition — what’s called a state of good repair — according to a report by the Citizens Budget Commission, a nonprofit that analyzes New York city and state finances. MTA officials have said the upcoming capital program would be larger than its current multiyear budget of $51.5 billion.

According to the report, the CBC budget estimate also includes a projected funding shortfall of $36.4 billion. The MTA and state lawmakers will look at ways to fund the upcoming capital plan. The transit provider plans to release the 2025-2029 budget later this month and submit it to the state legislature by Oct. 1.

The MTA’s overall infrastructure needs are staggering. The CBC estimates that it would cost up to $115 billion over five years to completely repair and upgrade the existing system. A report last week by Thomas DiNapoli, the state comptroller, estimated that the MTA’s total infrastructure needs would amount to $92.2 billion over five years, including some expansion projects such as extending the Second Avenue subway to 125th Street.

“Allowing the MTA system, a vital part of our region’s economy, to collapse would be detrimental to the entire region,” the CBC report said. “Still, New York must make smart decisions about which projects to fund and how to pay for them.”

The MTA has been trying to make up for years of disinvestment and neglect. It must rehabilitate Grand Central Terminal’s 110-year-old rail shed, modernize electrical substations, harden the system against flooding and extreme heat and replace thousands of rail cars that have outlived their useful life.

“We appreciate the thoughtful analysis from both Comptroller DiNapoli and CBC, and we intend to submit a detailed capital plan this month that will follow the same needs-based approach taken in those reports,” John McCarthy, the MTA’s chief policy and external relations officer, said in an emailed statement Monday, echoing his comments from last week after DiNapoli’s report was released.

State lawmakers will consider funding solutions for the MTA’s 2025-2029 budget, while also addressing a shortfall in the current capital plan after Gov. Kathy Hochul in June temporarily suspended a tolling initiative called congestion pricing that would have raised $15 billion for the MTA. That tolling plan would charge most motorists $15 to drive into Manhattan’s central business district.

The CBC recommends that Hochul move forward with congestion pricing to help raise money for the MTA. She has also urged the transit provider to find operational savings above the $500 million in annual spending cuts the MTA plans to implement.

Funding ideas for the upcoming capital plan include additional direct allocations from the state and city, expanding last year’s payroll mobility tax increase to businesses outside of New York City, extending the mansion tax beyond the city, raising fares and tolls above the planned 4% increase, and higher fees on driver’s licenses and vehicle registrations, according to the CBC report.

(Updated with MTA comment in eighth paragraph.)

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