MTA plans 4% fare, toll hikes in 2025 as part of budget proposal

The MTA’s operating expenses will climb 3% to nearly $20 billion in 2025, and it’s planning for a 4% fare and toll hike next year to help pay for them, officials said this week.

On the same day that the Metropolitan Transportation Authority approved a congestion pricing plan that will charge most motorists $9 for driving below 60th Street in Manhattan during peak hours, it also unveiled a new financial plan that includes a $19.9 billion operating budget next year, and plans for fare and toll increases in 2025 and 2027.

The updated financial plan and proposed budget, which will be voted on by the MTA Board next month, did include some good news. Higher-than-expected ridership on the Long Island Rail Road, whose ridership reached 88% of pre-COVID levels last month, is contributing to a slightly improved financial picture at the MTA, compared to its last financial update in July. A projected deficit of $428 million in 2027 has been reduced by $50 million, MTA deputy chief financial officer Jai Patel said Monday.

The transit authority is also on pace to hit its annual cost-cutting target of $400 million, as required in a 2023 bailout package from the state that earmarked more than $1 billion in new annual operating funds for the MTA, primarily from a payroll tax increase.

"We are delivering on our piece of that deal," said MTA chairman and CEO Janno Lieber, who noted that the savings target will increase to $500 million next year. "We are living within the budget that they set."

Although the MTA Board would have to vote on a rate increase, the financial plan assumes the agency will raise fares and tolls next year, returning to its schedule of adjusting rates for inflation every-other-year. After sticking to that schedule for more than a decade, the MTA did not raise rates in 2020, 2021 or 2022, citing pandemic-related affordability concerns.

Fares and tolls did go up by 4% and 6%, respectively, last year. But Lieber pointed out that, following a 10% reduction in the cost of a monthly LIRR ticket in 2022, many Long Islanders are paying less for their commutes than they did five years ago.

A monthly ticket between Hicksville and Penn Station currently costs $287. A one-way peak ticket from Ronkonkoma to Penn costs $20.50. Tolls at MTA crossings including the Queens Midtown Tunnel and Throgs Neck Bridge are $6.94 for E-ZPass holders.

Still, the prospect of the MTA digging further into the pockets of transit riders, at the same time as it moves ahead with plans to charge more for driving into the city, rankled Republican state lawmakers who rallied against congestion pricing in Bethpage Tuesday.

"The solution is always charging more. The solution is never taking a look within your own organization to find out where there are opportunities for savings," said Sen. Steven Rhoads (R-Bellmore), who believes, by raising fares, the MTA would be "fighting against what the idea of congestion pricing is supposed to be."

"This is about the environment and encouraging people to take mass transit. So now they’re talking about increasing the expense you’ll have to pay in order to take mass transit," Rhoads said.

To improve its finances, the Republican lawmakers urged transit officials to rein in fare evasion, which costs the MTA about $700 million a year.

MTA officials on Monday offered evidence that their recent efforts to reduce fare evasion on the LIRR have made a difference. Railroad president Robert Free said, in the first week of November, the number of invoices issued by LIRR conductors to passengers who did not pay their fares fell.

The proposed 2024 budget also earmarks $1.075 billion for overtime expenses — less than the $1.362 billion that the agency expects to spend this year, according to its latest financial update.

Lieber also noted that, adjusted for inflation, the MTA’s operating expenses are "actually 3% lower than before COVID, before we opened that huge Grand Central Madison terminal."

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.