Widening MTA Budget Gaps and Rising Costs Put Long-Term Financial Stability in Focus

Widening MTA Budget Gaps and Rising Costs

Put Long-Term Financial Stability in Focus

New York—The Metropolitan Transportation Authority (MTA) faces widening budget gaps in the coming years as operating costs continue to rise, requiring stronger savings efforts, revenue growth and progress on labor negotiations, according to State Comptroller Thomas P. DiNapoli’s annual report on the authority’s finances released Oct. 22.

The MTA’s $21.9 billion 2026 operating budget is balanced, but projected deficits are expected to grow from $295 million in 2027 to $507 million in 2028, $707 million in 2029 and $897 million in 2030. The gaps have widened despite stronger than expected tax revenues and progress on savings initiatives.

Operating expenses are projected to increase an average of 3.4% annually from 2027 through 2030, while revenues are expected to grow 2.1% annually. Healthcare, pensions and benefits, energy, debt service and paratransit costs are expected to rise 5% annually from 2026 to 2030, accounting for more than half of operating costs by the end of that period.

DiNapoli identified continued cost savings, revenue monitoring and a negotiated labor settlement as important steps toward maintaining budget balance. The MTA’s contract with the Transport Workers Union expired in May 2026 and the authority has lost more than 1,000 operations and maintenance workers since the early part of the year. The report also notes potential risks from federal funding decisions, tariffs and possible delays in anticipated casino openings, which could affect projected gaming tax revenue.

Ridership recovery and fare collection remain important to the MTA’s financial outlook. Systemwide ridership is projected to reach 74% of pre-pandemic levels by the end of 2026, with Metro-North Railroad expected to reach 87% of 2019 ridership and Long Island Rail Road 97%. The report also highlights bus fare evasion, estimated at 49% in the second quarter of 2026, up from 45% a year earlier.

The MTA reported $396 million in savings through its cost savings program in 2025 and has established a target of $750 million in savings by 2029. DiNapoli emphasized the importance of maintaining safe, reliable service while building ridership and controlling costs to support the authority’s long-term financial stability.

Published: October 28, 2026.