MTA considering 5.5% fare increase, service cuts to avoid 'fiscal cliff'

The highest fare increase in a decade, fewer cars on Long Island Rail Road trains, and reduced weekday LIRR service are among the measures the MTA is considering to shrink a projected annual deficit that could reach $3 billion.

The Metropolitan Transportation Authority laid out its proposals at a Manhattan meeting of the transit agency’s board Wednesday.

Among the recommendations made by MTA chief financial officer Kevin Willens is a 5.5% increase in fare and toll rates in 2023 — the highest since the MTA raised fares by 7% in 2013. Since then, the agency has stuck to a schedule of raising fares and tolls by 4% every other year, but deferred a hike in 2021 and 2022, citing financial hardships among riders caused by the pandemic. MTA officials said Wednesday that they expect ridership levels to be around 80% of pre-COVID-19 levels even by 2026.

Willens said raising fares by an extra 1.5 percentage points over the typical increase would generate an additional $50 million next year.

The MTA board will vote on the financial plan on Dec. 21, but it would not necessarily include a detailed fare plan and new ticket and toll prices. MTA chairman Janno Lieber said the agency likely wouldn’t hold legally required public hearings on its fare increases before next February.

It's unclear how the proposed increases would affect LIRR ticket prices, because the MTA can raise fare revenues in several ways, including by reducing discounts on certain fare types, like multi-ride MetroCards.

“The MTA is ready to do our part,” Lieber said. “For New Yorkers, transit is like air and water. We need it to survive. That means it needs to be reliable, safe, and, yes, affordable for everyone.”

Lieber called the proposed increase "modest," given that the MTA has not raised fares since 2019. But LIRR commuter Jade Harris expects the proposal will cause "huge controversy" among many riders.

“Some people are well off, [and can] pay that. So it’s no difference to them,” said Harris, 24, of Hempstead. “But I can see the majority of commuters not liking that so much.”

The transit agency also introduced other strategies to cut costs, such as using passenger data to reduce certain trains' lengths and "modify weekday schedules." LIRR interim president Catherine Rinaldi suggested those changes could include different schedules on Mondays and Fridays, days during which ridership has been considerably lower since the pandemic began compared to Tuesdays, Wednesdays and Thursdays.

Rinaldi said those changes would likely be made on Metro-North first, and wouldn't come to the LIRR until after it has a better sense of ridership demands for its forthcoming new service to Grand Central Madison. Rinaldi said any adjustments would target trains "that are underutilized."

Waiting for a train in Mineola, Elena Kraus said she understood why the LIRR would consider the cost-cutting measures, especially given that some trains “are almost empty.”

“It kind of seems like a waste to have all those cars running. If they do it right, then I think it could be OK,” Kraus said of the proposed changes. “I just worry that, sometimes, they might mess up and a train might end up being more crowded than they expect, and people would be without seats.”

Other cost-cutting strategies would include changing train maintenance cycles, expediting the delivery of needed materials, cutting energy costs, and hiring employees to save on overtime. Rinaldi said the measures would save the LIRR money “without compromising either the customer experience or the reliability of our service.”

Those and other efficiencies would shrink the MTA’s projected deficit, but not eliminate it. The agency would still have a budget gap of around $600 million next year, growing to $1.2 billion in 2024.

MTA officials have been pushing state and federal lawmakers to come up with a new dedicated revenue stream for the transit agency, which was devastated by the pandemic’s impact on ridership, fares and other revenues. Lieber said the MTA "could definitely avoid a fare hike if there is an answer coming from all the decision-makers — Washington, Albany and City Hall, and maybe others."

The MTA is counting on generating an extra $1 billion a year from a congestion pricing plan, which would toll vehicles driving below 60th Street in Manhattan beginning in 2024, but that money would go toward capital improvements, not operating costs.

The MTA received more than $15 billion in federal COVID-19 relief funding, and has spent all but about $5.6 billion of it. Willens has suggested cutting costs and using the remaining federal funds to pay off debt over several years. He called the alternative, “the kick-the-can approach.”

“We could just continue to spend the federal aid over the next couple years and run full speed into the fiscal cliff, which is now approaching $3 billion a year.”

Without a new revenue stream, Willens said the MTA could look to even more extreme measures to close its deficit, including steeper fare hikes, service cuts and layoffs.

Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA, said, of those options, “none are acceptable.”

“The situation is dire. We’ve reached a transformative moment on how to fund the MTA,” Daglian said. “The fiscal cliff is very real … We can’t afford to go off the cliff.”

MTA board member Samuel Chu, who represents Suffolk, supported taking measures right away to “send a signal” that the agency is serious about addressing its fiscal crisis, including by taking the various cost-cutting measures outlined by Rinaldi.

“Even with all those, I think it boils down to the fact that, at some point, we’re going to need help,” Chu said. “If we want this system to operate like we’ve been accustomed to our entire lives, we need help. We’re not going to be able to do this on our own.”

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.