The Metropolitan Transportation Authority (MTA) is seeing improvements in its financial outlook, but significant uncertainties remain due to potential changes in federal funding, according to State Comptroller Thomas P. DiNapoli’s annual review of the authority’s finances.
“The MTA’s budget is currently balanced, but outyear gaps persist as the Authority faces substantial fiscal uncertainties, led by funding threats from the federal government,” said DiNapoli. “It’s imperative that the MTA stay focused on improving the system and bringing riders back, which is one of the surest ways it can help stabilize its fiscal outlook at the farebox, and by following through on its savings initiatives.”
Although the MTA has reduced projected budget gaps over the past year, it still expects shortfalls of $345 million in 2027, $354 million in 2028, and $428 million in 2029. The authority’s financial plan depends on revenue streams such as reimbursements from the Federal Emergency Management Agency (FEMA) for Covid-related expenses and casino licensing revenue. If these sources are delayed or lost, the MTA could face an $800 million budget gap in 2026. FEMA has recently delayed reimbursements and suggested possible cancellation of these funds, which could result in a $300 million gap this year and add immediate pressure to the MTA’s budget.
Efforts to boost fare and toll revenues are ongoing. The MTA’s July Plan anticipates fares and tolls will bring in $205 million more than previously forecast over four years. A planned fare and toll increase has been rescheduled for January 2026. The authority aims to achieve $500 million in annual savings through various initiatives and may need to identify further cost reductions, especially in areas like paratransit costs that have increased in recent years.
DiNapoli emphasized the need for clarity regarding capital project priorities. The MTA’s $68.4 billion capital program for 2025-2029 faces uncertainty because of possible reductions in federal support. By August 2025, the MTA had committed $9 billion toward capital needs and is on track to meet its annual commitment target of $12.6 billion. Major investments include rolling stock purchases and the Second Avenue Subway extension. Maintaining this pace is important for improving system safety and reliability, which could help increase ridership.
Potential cuts to federal transit formula funding could leave a $4 billion gap in the MTA’s capital budget. Nearly $7 billion in federal funds for the Second Avenue Subway Phase 2 are also under review, though this project is covered by an existing grant agreement. Ongoing litigation over congestion pricing, expected to provide $15 billion for capital projects from 2020-2024, adds further uncertainty.
If expected funds are cut, the MTA may need to issue more debt, find efficiencies in capital projects, or postpone or cancel planned projects. Recent steps to reduce debt’s impact on the operating budget could be undermined if new borrowing becomes necessary.
System ridership has recovered compared to 2019 levels. In 2024, overall ridership was at 68% of pre-pandemic numbers. Paid subway ridership exceeded projections in July 2025 by reaching 76% of 2019 levels. Increased feelings of safety among riders may have contributed; 75% of respondents to a June 2025 survey said they felt safe on trains and in stations, compared to 45% in March 2024.
The MTA projects a gradual return of subway riders, reaching 77% of pre-pandemic levels by 2029. However, ridership recovery varies by location, with stations in the Bronx, Upper Manhattan, and outer Brooklyn lagging behind. The Comptroller’s Subway Ridership Dashboard provides detailed figures by station.
Bus ridership recovery remains slower, though paid bus ridership improved to 68% of 2019 levels in July 2025 from 60% in September 2023. Fare evasion continues to reduce MTA revenues despite these gains.
Commuter rail services are recovering more quickly. The Long Island Rail Road is expected to reach 90% of pre-pandemic ridership and Metro-North Railroad 83% in 2025.
Further information on these trends can be found through related resources such as the Subway Ridership Dashboard, analyses of subway delays, and updates on MTA debt.
