New York City transit system needs $115 billion in repairs and upgrades

(Bloomberg) — New York City’s transportation system should prioritize repairing existing infrastructure rather than investing in expansion projects, a new report from a fiscal watchdog group recommends. That’s because the MTA’s overall capital needs, totaling about $115 billion, far outstrip available funding.

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

The spending plan should be about $62.4 billion just to keep its assets in a reliable operating state, or a state of good repair, according to a report from the Citizens Budget Commission, a nonprofit that analyzes the finances of New York City and New York state. MTA officials say the next capital plan will be larger than its current $51.5 billion multiyear budget.

The CBC’s budget estimate also includes a $36.4 billion funding deficit forecast. The MTA and state lawmakers will be looking for ways to fund the next capital plan. The transit service provider will release its 2025-2029 budget later this month and submit it to the state legislature by Oct. 1.

The MTA’s overall infrastructure needs are staggering. CBC estimates that a comprehensive repair and improvement of the existing system would cost up to $115 billion over five years. A report released last week by State Comptroller Thomas DiNapoli estimated the MTA’s total infrastructure needs at $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 regional economy, to collapse would harm the entire region,” the CBC reported. “But New York must choose wisely which projects to fund and how to pay for them.”

The Metropolitan Transportation Authority (MTA) has been struggling to make up for years of underfunding and neglect. It must repair Grand Central Terminal’s 110-year-old train shed, upgrade electrical substations, harden the system against flooding and heat, and replace thousands of train cars that have outlived their useful lives.

“We appreciate the careful analysis by Auditor General DiNapoli and the Canada Capital Commission and intend to produce a detailed capital plan this month that will follow the needs-based approach employed in those reports,” John McCarthy, the MTA’s director of policy and external relations, said in an email Monday, echoing comments he made last week after DiNapoli’s report was released.

State lawmakers will consider funding solutions for the MTA’s 2025-2029 budget while addressing gaps in the current capital plan after Gov. Kathy Hochul in June temporarily halted a toll program called congestion pricing that would have raised $15 billion for the MTA. The toll program would have charged most drivers $15 to enter Manhattan’s central business district.

CBC recommended that Hochul push for congestion pricing to help the MTA raise money. It also urged the transit provider to find operating savings beyond the $500 million in annual spending cuts the MTA is planning to implement.

Funding ideas for the next capital plan include additional direct grants from state and city governments, expanding last year’s payroll turnover tax increase to businesses outside New York City, expanding the mansion tax outside New York City, raising fares and tolls above the planned 4 per cent, and raising driver’s license and vehicle registration fees, CBC News reported.

(Updates with MTA comment in eighth paragraph.)

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