2025-29 MTA Capital Plan Faces $35.4 Billion Shortfall Yet 24—and Counting— Funding Options Raise $747 Billion Total When Bonded
February 5, 2025
New York: From dedicated state funding to a new progressive income tax to repealing Madison Square Garden’s Property Tax Exemption, at least two dozen options exist to fill the now $35.4 billion funding gap in the MTA’s 2025-29 Capital Program. To examine those options in detail, today the Permanent Citizen’s Advisory Committee to the MTA (PCAC) released a new report “Take Your Pick Albany: Evaluating the Dozens of Options for Albany to Fund the MTA’s 2025-29 Capital Plan.” Additional potential funding sources will continue to be added and evaluated.
The report comes after the Capital Plan Review Board unexpectedly rejected the Capital Plan on Christmas Eve—citing the lack of concrete, delineated funding sources —which leaves the plan and riders in a state of limbo. The Plan outlines $68.4 billion worth of MTA investment over the next five years to make sure New Yorkers continue to have access to safe, reliable, resilient, accessible, and affordable transit.
“Our report clearly shows there is no shortage of viable options for funding the 2025-29 MTA Capital Plan, if the Governor and Legislature put their collective heads together to come up with and realize them,” said Lisa Daglian, Executive Director, Permanent Citizens Advisory Committee to the MTA. “Of course, not all funding sources are created equally, and how the revenue raisers affect those least and most able to afford them must be weighed. Regardless of their choice, the Governor and Legislature must find a way to fully fund the Plan without delay, or risk subjecting riders to an increasingly unreliable system.”
The Capital Plan is rooted in the MTA’s 20 Year Needs Assessment, which rigorously examined the status of all of the MTA’s $1.5 trillion worth of physical assets and is almost entirely comprised of projects to keep those assets in a State-of-Good-Repair. Without the plan, riders could quickly face another “Summer of Hell” with endless delays, or another storm that brings catastrophic flooding to our transit system.
Key Report Findings:
- The 24 funding sources listed total $44.8 billion in recurring revenue sources that can be bonded by the MTA for a total of $747 billion – or more than 21 times the required amount to fully fund the plan. For a funding stream to be bondable, it must be continuous and predictable, not a one-time infusion of cash
- 21 of the 24 options have positive equity evaluations due to either being progressive revenue raisers or having additional positive societal impacts
- Two thirds of the options have positive climate benefits, with seven options rated as having direct benefits and nine with indirect benefits. All of these options will help the state meet its ambitious climate goals
- The funds suggested would come from a variety of geographies, including 12 exclusively on New York City alone; three on the 12 county MTA region; and nine impacting all of New York State
- Ten sources would be levied on individuals; eight on businesses; and six sources would apply to a combination of both individuals and businesses
- 15 funding streams are progressive, three have nuanced effects depending on the structure of the revenue, while four are likely regressive
- 19 of the sources represent funds that are less than 1% of the state’s overall budget
Recommendations:
- First and foremost, Albany must fully fund the MTA’s 2025-29 Capital Plan using long-term, dedicated, bondable funding sources
- Legislators and Governor Hochul should prioritize funding sources that could have positive equity and climate benefits in addition to funding the MTA transit system, which is already a downpayment on equity, sustainability, and resiliency around the region
- Funding streams should not disproportionately be raised from low-income New Yorkers or fall solely on the backs of businesses or individuals in New York City. The MTA is the backbone of our state’s economy, so the entire MTA region and state should invest their fair share into transit
In addition to sparing the millions of daily MTA riders from broken elevators and escalators, delayed trains, ancient train cars and inaccessible stations, MTA Capital Plans are an economic engine for the state and region. A recent report from EY and the Partnership for NYC estimated that the plan would generate more than $106 billion in economic activity and 70,000 jobs across New York State over the next five years.
The 2025-29 Capital Plan makes a wide range of investments to improve and expand the MTA system, including:
- Purchasing 1,500 new subway cars, 500 new railroad cars and 500 electric buses
- Resignaling the N, Q, R, W and J, Z in Manhattan and A, S in Brooklyn and Queens with CBTC for faster, more frequent and more reliable service
- Rebuilding Grand Central’s Train Shed and Metro-North’s arterial tracks up to the Harlem River
- Starting the Interborough Express, which will link Brooklyn and Queens and connect 17 different subway lines, 51 bus lines, and the LIRR
- Upgrading power systems, maintenance facilities, and transit structures
- Making at least 60 more subway stations and six railroad stations fully ADA accessible