The original op-ed can be read here.

A strong public transit system is essential to New York’s economy and New Yorkers’ quality of life. To paraphrase a political axiom: as goes the MTA, so goes the region. Unfortunately, the MTA may not be going well for much longer if decisive action is not taken soon to address impending massive budget shortfalls.

Amid concerns about safety, service and ridership, the Metropolitan Transportation Authority has a huge structural operating budget deficit. Its recurring annual expenses are at least $2.5 billion more than its revenues. Federal Covid aid that has filled this gap temporarily will soon run dry.

Though much discussion focuses on lower ridership depressing fare revenue, recall that the MTA had a prepandemic structural deficit of roughly $750 million, which was widened by eliminating the 2021 subway fare increase. The MTA is not merely a victim of circumstance; its structural deficit also is due to its high costs, partly from operating differently than other transit systems.

The MTA also needs more than $35 billion in capital investment in the next few years just to bring its tracks, cars and signals up to, and keep them in, a state of good repair. Absent these investments, service will start to break down.

This eye-popping amount does not even include the many wished-for service expansions, or the tens of billions of additional dollars for state-of-good-repair work likely to be included in the 2025-29 capital plan.

Some good news

The good news is that solutions that do not sacrifice service or compromise competitiveness exist. Increasing efficiency should be a significant portion of the MTA's gap-closing actions. The MTA budget includes a $100 million efficiency plan, which would close just 4% of its gap. Much more is needed.

The Citizens Budget Commission identified billions of dollars in potential savings from adopting operating strategies common to other public transit systems and aligning costs with industry benchmarks.

Nearly all other subways use one-person train operation, and commuter trains use conductor spot checks rather than checking every ticket. Also, national data shows that the productivity of New York City Transit subway facility maintenance work is 44% lower than the national median.

Implementing structural changes such as these are not easy and will require a multiyear, all-hands-contributing approach. The efficiency push should start as soon as possible, with changes that can be achieved by actions of the MTA's leadership alone.

But the greatest savings are possible only with changes to labor contracts. The MTA's leadership and labor unions should work together, using the collective wisdom of management and workers, to identify and phase in efficiency reforms. These could narrow the structural gap, support raises workers deserve, likely involve gainsharing, and preserve services critical to New Yorkers' livelihoods and quality of life.

The MTA is smartly considering using federal aid to reduce its recurring debt service costs, but that accelerates the fiscal cliff to next year. Most of the discussion on closing the structural gap has focused on getting more money from taxpayers. There is no magic money tree that grows resources free of consequences. New revenues or subsidies should be sought only with great care to identify trade-offs and impacts.

New York needs competitive taxes and public services to attract people and businesses. It has the nation’s highest combined top personal income tax and corporate franchise tax rates and future budget gaps approaching $6 billion for the State and $10 billion for the City. Casually raising taxes or cutting other services without considering the impacts on families and businesses would be short-sighted.

State of good repair

The MTA's strength also depends on making significant capital investments to bring and keep its current assets in a state of good repair. Congestion pricing remains critical. It should be implemented expeditiously, and revenues should not be diverted to narrow the operating budget gap.

Our research found that the MTA's recent success at increasing the capital contracting and delivery speed still will leave more than $25 billion in planned projects outstanding at the end of 2024. To ensure the system functions reliably, the MTA should keep laser-focused on increasing its capital project throughput, use techniques such as Fastrack closures to facilitate repairs and upgrades, and prioritize the state of good repair before expansion projects.

Ensuring a strong future for the MTA relies on all New Yorkers: its employees; riders, who should pay reasonable fares that increase with costs; drivers, who pay tolls, including congestion pricing; taxpayers, who already support the system; and elected officials willing to make the hard choices for our future.