'Structural Deficit Problem': MTA Says $300M Budget Gap Driven By LIRR Raises; Union Calls It 'Irresponsible'

NEW YORK, NY — The MTA is facing annual budget deficits that could reach almost $1 billion by 2030, the transit agency said at its board meeting Wednesday, with MTA chair Janno Lieber calling the budget shortfalls a "structural deficit problem."

"The gap…between our moderately growing revenues and our fast-growing costs reminds us, and should remind policymakers, that we have a structural deficit problem," Lieber said. "We're starting this discussion now — although this is a mid-year update, not the final budget — so that everybody who has a role to play in the MTA's policymaking — stakeholders, Albany and so on — know exactly what's going on."

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At the annual level, MTA CFO Jai Patel said the agency's expected deficits for each of the next three years has grown.

The 2027 budget deficit, projected back in November to be $160 million, is now projected to be $295 million. In 2028, a year the MTA had been expecting a $242 million shortfall in its November budget, the agency now expects a deficit of $507 million. Finally, a 2029 budget deficit that was estimated in November to amount to $306 million is now expected to rise to $707 million, the MTA said. The 2030 budget deficit, an MTA chart shows, is projected to reach $897 million.

"That's 800 [million] more than what we had discussed in November," Patel said. "These gaps are driven primarily by the one-year labor pattern of 3.8 percent that was negotiated with the Long Island Railroad, and structural cost pressures including health benefits, workers' compensation, public liability claims, paratransit, electric power and fuel, which continue to grow faster than inflation and our recurring revenues."

That 3.8 percent raise came after a May strike that left hundreds of thousands of Long Islanders without service for a workday before a contract was reached. On that single weekday impacted by the strike, Long Islanders reported seeing more traffic than ever before.

In the leadup to that strike, the MTA said that raises above a certain percentage were not in its budget. The MTA said back before the strike began that the precedent the May contract could set was also a concern, noting that these five unions represent a relatively small portion of the transportation authority's workforce.

In a conversation with Patch Thursday, Brotherhood of Locomotive Engineers and Trainmen General Chair Gil Lang called Patel's reporting on the budget, specifically the comments on the union raises, "irresponsible."

"I think it's plain to see that the MTA is trying to use labor as the scapegoat," Lang said. "I think it's pretty irresponsible for the CFO to report that the primary cause of whatever they're talking about, however they're going to balance their budget, is due to the contract that was just negotiated with them."

While the anticipated deficits are larger than they looked in November, the MTA said it had already made some strides through so-called "efficiency" measures that saved over $500 million.

"The MTA remains on a strong financial foundation we've worked hard to build over the last several years," Patel said. "The MTA did its part by committing and delivering the $500 million in operating efficiencies, which was 25 percent of the total deficit we faced at the time. In fact, we've committed to another $250 million in operating efficiencies through the end of this [financial] plan."

Ultimately, Patel said those "structural cost pressures" were such that the MTA knew 2027 would be a difficult budget to balance.

"We knew that 2027 would start to have small deficits again due to structural cost pressures that continue to shape our long-term financial outlook," Patel said.