MTA may need to increase fares by 23% to reclaim pre-COVID revenue

Gov. Kathy Hochul and the MTA would need to increase the cost of a subway or bus ride by 79 cents to recoup pre-pandemic revenue levels, state auditor Tom DiNapoli warned Tuesday.

With ridership hovering around 60% before the pandemic, fare revenues are likely to grow to just 32% of the MTA’s operating budget by 2026 — compared to 44% before COVID-19, the Comptroller’s Office concluded in a new report.

Without new sources of funding — and instead of a sudden surge in ridership — officials will be forced to implement severe service cuts and fare hikes, DiNapoli said.

“No one wants to see steep fare increases or service cuts. However, it is unclear how the MTA will avoid these outcomes if it does not identify additional options,” he said.

A 4% fare increase is currently planned for next year and again in 2025, according to the MTA’s latest financial records. Officials would need to increase fares by an additional 19% to match pre-COVID revenue, DiNapoli said. The current subway and bus fare is $2.75; According to the Comptroller’s calculations, that price would increase to $3.54 by 2026.

Officials had planned to increase fares earlier this year, but Hochul provided government funding that allowed its appointed MTA leadership to postpone such increases “indefinitely.”

A man in a suit at a microphone
Comptroller Tom DiNapoli has issued dire warnings regarding the MTA’s financial prospects.
STEFAN JEREMIAH
a man in a suit behind a podium
Fare increases could deter ridership, MTA CEO Janno Lieber warned.
Robert Mueller

Rider numbers fell by over 90% in the first few weeks of the pandemic and are projected to be down to just 73% of pre-pandemic levels by mid-2026, consultants at McKinsey & Company forecast.

A cumulative infusion of federal funds of $15 billion over 2020 and 2021 temporarily secured the MTA’s budget – but only until 2024. The MTA’s budget is further hampered by over $40 billion in debt, partially funded with fare monies, the report said.

Janno Lieber, CEO of MTA, has warned that rising fares could actually discourage ridership – and inadvertently hurt transit companies’ fare revenues.

a woman pulls her metrocard into the subway
The MTA may need to increase fares unless it increases ridership or finds new sources of funding.
Getty Images

An MTA representative said DiNapoli’s new report “identified serious issues facing transit agencies across the country, including the MTA.”

“We are committed to providing our drivers with a robust service, and this report underscores that addressing post-pandemic budget gaps through rate increases and service cuts alone is not an attractive option,” spokesman John McCarthy said in a statement.

https://nypost.com/2022/11/29/mta-may-need-to-raise-fares-23-to-regain-pre-covid-revenues/ MTA may need to increase fares by 23% to reclaim pre-COVID revenue

JACLYN DIAZ

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