In a notable turn of events, the New York Capital Program Review Board has vetoed the Metropolitan Transportation Authority’s (MTA) proposed capital plan for 2025-2029, which was ambitiously set at $68 billion. The veto, issued by the legislative leaders of both houses, largely stems from a significant $33 billion budget gap that has raised eyebrows and concerns among stakeholders. This development not only delays critical projects for New York’s transit system but also places additional pressure on Governor Kathy Hochul, who will now need to devise a funding strategy as part of her upcoming executive budget scheduled for January.
The MTA’s spokesperson, John McCarthy, expressed optimism regarding the importance of the capital plan and emphasized that it was developed based on a comprehensive 20-Year Needs Assessment. McCarthy noted the potential of the plan to unlock transformative projects that are already funded and ready to commence, which could enhance the reliability and safety of transit across New York City. Despite his optimism, the stark reality remains that substantial funding gaps need to be addressed urgently if the proposed projects are to move forward.
The veto was not merely a procedural formality; it represents deeper political maneuvering within New York’s government. Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, the architects of the veto, communicated their concerns in a letter to MTA CEO Janno Lieber, highlighting the need for either legislative action or additional non-state revenue sources to fill the funding void. Their focus was not on the contents of the plan itself, but rather the lack of financial backing, indicating a strategic move to enhance their bargaining power during the upcoming budget discussions.
Rachael Fauss, a senior policy advisor at Reinvent Albany, opines that the current process for approving the MTA’s capital plans is fundamentally flawed. Traditionally, the MTA submits its plan in good faith, anticipating that the legislature will subsequently provide the needed funding. This backward sequence raises questions about accountability and transparency in New York’s budgetary framework, leaving the MTA in a precarious position. Even in past iterations, such as the capital plans of 2015-2019 and 2020-2024, similar issues arose, yet decisive action was often deferred.
As Governor Hochul prepares to propose revenue sources for the MTA’s capital deficit in January, analysts anticipate her approach will focus on regional tax revenue. Historically, some taxes aimed at supporting MTA funding have gained traction, though the legislature often prefers to impose these burdens within New York City itself. The payroll mobility tax, which was leveraged to bolster the MTA’s operational budget in 2023, demonstrated the trend of shifting financial responsibilities onto city taxpayers. Many, including Fauss, have raised alarm over this trend, emphasizing the necessity for a regionally-funded MTA to ensure equitable distribution of costs among all beneficiaries of the transit system.
Moreover, Hochul may seek to elevate the state’s capital contribution grant from the current $4 billion, a figure well below historical norms. In the 2015-2019 plan, state contributions amounted to $9 billion, and increasing this allocation could mitigate the MTA’s reliance on debt financing. This proposal is likely to encounter less political resistance, but it remains uncertain whether it will suffice to address the entire $33 billion funding gap.
The MTA cannot afford major cuts to its capital plan, primarily because it focuses on the “state-of-good-repair” that is vital for sustaining the existing transit infrastructure. A recent assessment revealed $90 billion in necessary capital improvements, encompassing crucial updates and replacements for aging subway cars and commuter trains, alongside other essential enhancements.
The urgency of these needs is amplified by important upcoming projects, including accessibility upgrades mandated by legal settlements and the eagerly awaited expansion of the Second Avenue Subway. Additionally, the Interborough Express, which will connect Brooklyn and Queens, has been outlined as a priority by Hochul. Given these factors, stakeholders across the board must advocate for a transparent and effective funding strategy that not only addresses immediate needs but also lays a solid foundation for the city’s long-term transit infrastructure.
The MTA’s vetoed capital plan reflects a multifaceted crisis that extends beyond mere numbers. It encapsulates the ongoing struggle between legislative bodies, the governor’s office, and the pressing demands of an aging transit system. As New York readies for another round of budget negotiations, the pathway toward a robust transit system hinges on collaborative efforts and innovative solution generation—one that truly represents all New Yorkers. The situation is precarious, but it also presents an opportunity for reform and revitalization that, if navigated correctly, could positively reshape the Metropolitan Transportation Authority for years to come.