CBC Releases What to Look For in the MTA's November 2022 Budget Update
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READ: What to Look For in the MTA's November 2022 Budget Update
The Metropolitan Transportation Authority’s (MTA) July 2022 Financial Plan reported a structural operating deficit of more than $2.5 billion per year. CBC’s guide identifies what observers should look for when the MTA releases its budget update next week. The update will show whether the MTA’s fiscal condition has further deteriorated, and how the MTA has modified its gap-closing plan.
The MTA’s plan uses its remaining $7.7 billion of emergency federal aid to close the gaps through 2024. The MTA does propose a debt restructuring plan that would reduce the annual gaps in 2024 to 2028 to $1.6 billion, but it would open a new gap of $800 million in 2023. To close these gaps, the MTA seeks additional State funding.
The MTA proposed efficiency savings of $100 million per year, just 4 percent of the deficit. Past CBC research found that the MTA could do much better—up to $2.9 billion per year in recurring savings is possible—but much is challenging since it relies on working with labor to modify contracts.
CBC's new blog identifies seven critical questions to ask about the November 2022 Financial Plan and 2023 Proposed Budget:
- How does the structural gap change in comparison to the July 2022 Financial Plan and why?
- How does the MTA balance the 2023 budget and what are the implications of these choices for 2024, 2025, and 2026?
- How much new aid does the MTA want the State to provide?
- What are the details and the total value of the MTA’s plan to increase efficiency and productivity?
- How does the MTA expect ridership and revenues to change?
- How are tax revenue forecasts updated?
- Will the MTA proceed with the planned 2023 and 2025 fare increases?
Importantly, the existing gaps could grow by as much as $2 billion a year if risks—such as high inflation, higher-than-expected collective bargaining agreement costs, increased overtime spending, and lower ridership—become reality. This update will provide critical insight into the MTA’s latest thinking on the likelihood of these risks and how it plans to address them.