The operating budget is balanced at the MTA, according to the transit agency’s financial pros. Reducing costs through the use of OMNY and lowering maintenance costs with new rolling stock have contributed to the state-run agency’s money-saving goals.
The MTA said on Wednesday that it plans a $675 million savings over the next four years, which is in addition to a half-billion annual savings that was already announced.
Specifically, the MTA on Nov. 19 released its final 2026 operating budget and four-year financial plan, which includes a “new round of operating efficiencies” over the next four years that transit reps said significantly reduce out-year deficits announced in the July financial plan by a total of $418 million.
MTA leadership said new cost savings of $675 million are the primary driver of the financial “achievement,” and raises the cumulative total to more than $2 billion in operating savings through 2029.
Saving money with OMNY tap-and-ride
The MTA’s operating budget covers costs related to day-to-day operations, including keeping stations clean and trains and buses in good repair. It is separate from the agency’s $68.4 billion 2026-2029 capital plan and revenue collected from congestion pricing.
“In 2021, the MTA was looking at a $2.5 billion annual deficit, but we have been able to get back on track thanks to the amazing support from Albany,” MTA Chair and CEO Janno Lieber said. “That support allowed us to stay afloat without cutting service, without any layoffs. And another major factor in this agency’s fiscal stability has been the cost savings that we’ve achieved in recent years.”
One of the major cost savings actions includes the ongoing transition to OMNY tap-and-ride. For example, thanks to OMNY, the MTA said, the agency spends less for coin processing.
“We’re realizing savings from the transition to tap-and-ride, which is not what motivated us to move to the more modern system, but not having to go around and collect money from all those MetroCard machines is going to save money,” Lieber said.
The public has expressed concerns about OMNY, including its lack of on-the-spot features that show balances, as well as other mechanics of the system.
Lieber said the MTA is addressing those concerns.
To date, the agency is on a roll with full adoption of OMNY. Lieber said 90% of customers have already signed on to the digital payment system.
“All the new vending machines for OMNY have been installed, and we’re well ahead of where we expected to be in terms of the penetration of tap-and-ride among our riders,” he said.
Subway and bus fare increase in January
Fares and tolls help support the MTA’s operating budget. Although a fare and toll increase will go into effect in early January, Lieber said New York is faring better, in several ways, than other transit agencies across the country.
“Thanks to the governor [Kathy Hochul], we are alone among major U.S. transit agencies; we are not grappling with 20% fare increases like NJT or SEPTA. And we’re not facing the huge service cuts being contemplated in Chicago, in San Francisco and in Philadelphia.”
However, similar to NYC, other American cities such as Chicago and Boston have battled or continue to battle ongoing fare evasion.
Washington, D.C.,’s Metro system overhauled its fare gates last year, installing new, modernized gates at its rail stations. It helped bring down fare evasion by 82%, the transit agency reported.
Meanwhile, the MTA said it also identified cost savings through lower maintenance costs with the rolling deployment of newer and “more reliable” subway and rail cars, the optimization of railroad train crew schedules and other identified efficiencies of internal processes across its agencies.
“The MTA has kept real costs below 2019 levels and, through these new cost savings, continues to meet the challenge of identifying new operating efficiencies to further reduce out-year deficits,” said MTA Chief Financial Officer Jai Patel.
She added that the transit system will continue to make “smart” decisions related to budget stability.
