More than $16 billion worth of work to upgrade and maintain New York City’s transit system will be halted due to Gov. Kathy Hochul’s pause of congestion pricing, MTA officials said on Wednesday.
The announcement came during the transit authority's first board meeting since Hochul suspended the tolling program earlier this month. Details of the new plans — which board members described as “a financial disaster” and “dire” — mean officials are temporarily gutting the MTA's capital plan that was formed five years ago with the promise of bringing the aging subways, buses and commuter railroads into the 21st century.
MTA executive Tim Mulligan said the lack of revenue from congestion pricing tolls, which were previously expected to begin on June 30, forced the agency to prioritize maintaining the system and defer projects worth a total of $16.5 billion. That includes the purchase of $1.5 billion worth of new subway cars and 250 new electric buses.
The work to make 23 train stations accessible to riders with disabilities will also be put on the shelf, according to the MTA. And, as officials at the agency said last week, work on the Second Avenue subway extension to East Harlem won’t move forward.
“That presentation was dire,” said Midori Valdivia, an MTA board member who was appointed by Mayor Eric Adams, on Wednesday.
Lisa Sorin, who was appointed to the board by Hochul, called the cuts “very disturbing.”
The board meeting began with a line snaking around the MTA's headquarters — 140 people signed up to speak, and a majority of them opposed Hochul’s pause on congestion pricing.
The governor's decision cratered the MTA’s current capital plan for construction projects throughout the system. When the plan was first presented in 2019, former MTA Chair Pat Foye described it as “historic” and “transformational,” promising it would give riders “more reliable, efficient service.”
Congestion pricing was designed to finance $15 billion worth of upgrades, about 30% of the five-year plan's total cost. But officials said on Wednesday that the tolling program's pause will cost the MTA even more because the agency will need to defer federal grants that depend on local funding.
The good government group Reinvent Albany estimated that Hochul's move also imperiled 100,000 jobs in the state that are tied to MTA projects.
State Comptroller Thomas DiNapoli estimated that signal modernization projects in the subway will likely face the most cuts due to the congestion tolling pause. Mulligan said during the MTA board meeting that upgrades to the the A, B, C D, F and M lines will be deferred.
The now-on-hold Second Avenue subway project to extend the Q line into East Harlem relies on both a $3.4 billion federal grant and roughly $5 billion that the MTA previously planned to get from congestion pricing. Officials said $2 billion of the federal money can’t be delivered without the MTA funding its own share, though MTA Chair Janno Lieber said the grant won’t disappear.
The agency has “no intention to abandon that grant, we’re being straight up about the fact we need to take some time to advance the work,” Lieber said.
The MTA had planned to turn on congestion pricing toll readers June 30.
Earlier this month, the MTA announced that it had already issued a stop-work order on the relocation of utilities for the project and would hold off on issuing a contract to dig the tunnel for the extension.
In recent weeks, Hochul and state lawmakers have said they’re exploring other funding sources to fill the MTA's budget gap. But the state Legislature's annual session ended without a replacement plan moving forward. Hochul could call lawmakers back for a special session this summer to cut a deal.
“When that financial solution that is being talked about arrives, God willing, we will be ready to put Humpty Dumpty back together again as quickly as possible,” Lieber said, emphasizing that MTA must be ready to initiate the deferred projects when the funding materializes.
In a statement following the board meeting, Hochul said she still plans to fund all the MTA projects that have been put on hold. She also called for the agency to reduce its costs.
“This administration’s proven commitment to the MTA, as well as my record of delivering resources for critical priorities in the State budget, should provide the MTA with full confidence in future funding streams," she said. "While the timing of the next budget may necessitate temporary adjustments to the timeline of certain contracts, there is no reason for New Yorkers to be concerned that any planned projects will not be delivered."
DiNapoli said he expects that the transit authority will roll over many of the projects into the next four-year capital plan, which is due in the fall.
“The MTA’s decisions in the coming weeks and months will affect riders for years to come,” he wrote in a statement. “The MTA will be forced to put off badly needed investment in expansion and improvements to the system. Those choices will directly affect riders.”
Hochul justified her decision by saying the $15 base fare on drivers entering Manhattan below 60th Street would have imposed an excessive economic burden on them and imperiled the city’s recovery from the pandemic. She has also said she needs time to figure out a new source of revenue for the MTA with the state Legislature.
In an appearance on CNBC over the weekend, she said "$15 is not the right price."
“I’m the biggest supporter of the New York subway system,” Hochul continued.
This story was updated with a statement from Gov. Kathy Hochul.
