It was one of New York City’s most enduring crises: For decades, the Metropolitan Transportation Authority had warned that it was teetering on the brink of financial ruin.
A series of events compounded the threat. The Sept. 11 terrorist attacks brought ruin to large swaths of the subway network. The Great Recession depleted infrastructure investment. The coronavirus pandemic halted the daily commute for many, wiping out ridership, which has been slow to recover.
But now, the nation’s largest transit system has reached an unfamiliar milestone: fiscal solvency. A report released this week by Thomas P. DiNapoli, the state comptroller, said that thanks to federal pandemic aid and a large boost in funding from the state, the authority had balanced its budget through the next five years.
In his report, Mr. DiNapoli urged the M.T.A. to use its newfound resources to “execute its most critical goal: bringing riders back to the system.”
Weekday subway ridership has rebounded significantly since plummeting at the height of the pandemic, but still hovers at about 70 percent of prepandemic levels, according to M.T.A. data.
And the comptroller’s analysis of M.T.A. rider surveys showed that while customer satisfaction rates have improved overall, they have slipped in recent months, falling to 59 percent of customers satisfied with subways and 64 percent with buses. The authority’s stated goal is 70 percent satisfaction systemwide by next June.
If more riders don’t come back, Mr. DiNapoli warned, and find “safe, frequent and reliable” service when they do, the M.T.A.’s future is at risk.
The authority is under intense pressure to improve service, in part because the state has mandated that it do so as part of a budget deal that recently saved it from financial decay.
It faces other challenges, too: It must finalize a first-in-the-nation congestion pricing program that is designed to raise billions by tolling drivers, and that has drawn criticism and lawsuits. And it is counting on a mix of new revenue sources — including the tolling program and casinos that the state plans to open — to hit their targets, all so that it can maintain day-to-day operations, finish capital projects and rein in its long-term debt, which has ballooned to $48.4 billion.
But the reason the M.T.A. has any hope at all of achieving long-term financial stability is that state leaders this year made the biggest and most permanent contribution in recent memory to pay for it.
“We decided that we would have to make the case that transit was essential,” Janno Lieber, the M.T.A. chairman, said of lobbying efforts in Albany. “That this was not just any old governmental service. It needed to be protected. It needed to be funded. And everybody heard.”
The M.T.A., along with other transit agencies across the country, received a federal bailout at the height of the pandemic to keep it afloat. It also cut back on operating costs and raised the base fare for subway and bus trips in August, to $2.90 from $2.75.
But the biggest lifeline arrived in April, when Gov. Kathy Hochul and state lawmakers agreed to include new and recurring funding for the M.T.A. in the state budget.
The funding included an increase in the payroll tax paid by the city’s big businesses, which is expected to generate an additional $1.1 billion for the authority each year. The state also gave the authority a one-time payment of $300 million and another $65 million earmarked to reduce the August fare increase, and promised it future revenues from the casinos.
The changes have already had positive effects. The M.T.A. made five bus routes free as part of an experiment to attract more passengers and make the system more affordable, and announced service increases on certain subway lines. Both Moody’s Investors Service and Standard & Poor’s Global Ratings improved the M.T.A.’s credit assessments as a result of the state’s boost in tax support.
Before the infusion of money, the authority was facing a dire future. A potential budget gap of nearly $1.2 billion by 2024 left officials with limited options that included cutting service, laying off workers or raising fares more drastically.
Many other American transit systems are fighting steep losses caused by the pandemic, and they are looking to New York for hope. Leaders in Philadelphia, Washington, Chicago, Boston and New Jersey are all bracing for future deficits with no relief in sight.
“We love how the state legislature has acted in New York,” said Leslie Richards, the chief executive of the Southeastern Pennsylvania Transportation Authority, which serves Philadelphia and the surrounding area and expects a recurring $240 million deficit starting in the 2025 fiscal year.
“Quite frankly, the only way I see this fiscal cliff challenge being solved is with big, increased support from the state,” she said.
For years, transit leaders in New York lurched from crisis to crisis, pleading for funding with ominous warnings of a so-called transit death spiral, where falling ridership causes revenue to shrink further until the network collapses.
The tactic worked to stave off individual emergencies. But this time, the authority deployed an aggressive public relations campaign, drawing on political themes underscored by the pandemic and the racial justice protests after the police killing of George Floyd.
It noted that New Yorkers of color were far less likely to be able to work from home and disproportionately relied on mass transit.
Lawmakers were under extraordinary pressure to make the state more racially and ethnically equitable, Mr. Lieber said, and the transit system was well positioned to capture their attention.
“It was a very different political strategy for the M.T.A.,” Mr. Lieber said as he slipped through thick crowds at Grand Central Terminal, admiring the dense foot traffic as an unofficial metric of the city’s recovery.
Ms. Hochul seemed determined to fund the transit network. During her State of the State address in January, she described shoring up its finances as a top goal of her administration.
“The survival of the New York City metro area as we know it hinges on the existence of the M.T.A.,” Ms. Hochul said in a statement. “Protecting and investing in the M.T.A. was not something I wanted to kick down the road to deal with later.”
Still, major hurdles lie ahead for the system.
Much of the subway needs critical wear-and-tear upgrades, including to the outdated signals that keep trains running. Crowding, dirty conditions and late trains are perennial concerns. The system is still largely inaccessible to those with disabilities, a problem the M.T.A. has vowed to fix.
Last week, flooding from heavy rainfall shut down half of the subway lines, illustrating how hard it is for the century-old transit system to keep up with a climate crisis that it was not built to withstand.
And worries about safety have plagued the system, although since the city and state began a series of police crackdowns and surveillance initiatives, riders have reported feeling safer. Major felonies in the subway fell by 5 percent from January through August compared with the same time period last year.
Some experts worry that commuters will never use the transit system as frequently as they used to, especially if a recession materializes. The authority’s rosy new financial plan hinges on ridership returning to about 80 percent of prepandemic levels by 2027. If inflation worsens, it could depress needed tax revenue. And until the casinos are built, that source of funding is not guaranteed.
Government watchdogs have also insisted that in order to achieve true fiscal health, the authority must work harder to reduce its debt.
Transit advocates said that the authority would need to focus on communicating clearly with riders to keep them happy.
“I think messaging is key,” said Tiffany-Ann Taylor, the vice president for transportation at the Regional Plan Association, an urban policy group. She stressed the importance of reliable countdown clocks to tell riders when trains would arrive and signs to promote new investments in the system.
She also said M.T.A. leaders should work harder to explain the service disruptions that are inevitable in a sprawling and dynamic mass transit network. “People use the system, yes, out of necessity, but there are still choices in that necessity,” she said.
As part of their funding package, lawmakers required the authority to come up with $500 million annually in savings. The M.T.A. is trimming costs, in part, by hiring workers to clean the system instead of using contractors and by extending crew shifts to make schedules more efficient.
The authority will have to act carefully as it rolls out changes, because failures could test the loyalty of state leaders who finally came to its rescue.
“What has been kneecapping the M.T.A. has been an inability for Albany to actually rise to the occasion,” said Assemblyman Zohran K. Mamdani, a Queens Democrat who pushed the package of largely successful bills to give the M.T.A. more money and to expand service. “And now that that has changed, it means that it’s time for the M.T.A. to deliver on its promise.”
