New York State Comptroller Thomas DiNapoli has released the 2026 annual report on the Metropolitan Transportation Authority’s (MTA) finances, noting that outyear budget gaps fueled by rising costs require the MTA to find long-term strategies to further control non-discretionary costs while continuing to build ridership, hit its savings targets and negotiate a new labor contract.

“The MTA’s near-term financial outlook remains stable, but that could change in the coming years,” DiNapoli said. “Meeting higher savings goals, keeping a tight focus on growing ridership through safe, reliable service and working constructively with labor will help avoid a return to the fiscal instability of years past. New Yorkers need a strong MTA to keep our economy running well.”

The MTA’s most recent Financial Plan shows budget balance in its $21.9 billion 2026 operating budget, but outyear budget gaps continue to widen, according to the comptroller, driven by rising non-discretionary costs during the financial plan period, creating increases in unanticipated expenses when compared to earlier financial plans. The MTA projects gaps of $295 million in 2027, $507 million in 2028, $707 million in 2029 and $897 million in 2030, according to the report. The comptroller notes that these gaps have widened despite stronger than expected tax revenues and recent progress on savings initiatives.

Over its 2027-2030 Financial Plans, the MTA expects operating expenses to increase 3.4% annually. Much of this is driven by non-discretionary costs, including healthcare, pensions and benefits, energy, debt service and paratransit. These costs are expected to grow 5% a year from 2026 to 2030, by which point they will account for more than half of all operating costs. These costs are set against an expected 2.1% rise in annual revenues (including as-yet unapproved fare and toll increases in 2027 and 2029) from 2027 to 2030.

The MTA has yet to reach a new agreement with the Transport Workers Union following the contract’s expiration in May 2026. Since early 2026, the MTA has lost more than 1,000 operations and maintenance workers, amid concerns about ongoing increases in overtime costs.

DiNapoli’s report notes that management of several of the MTA’s budget pressures are within its control, and proactive monitoring of revenue collections, continued expansion of recent cost savings efforts and a negotiated labor settlement should provide clarity as to how it will maintain budget balance in the coming years.

The report also outlines budgetary risks that the MTA cannot directly control, including federal decisions regarding transportation capital funding and federal actions that affect the cost of fuel and goods impacted by tariffs. Any delay in the opening of two anticipated casinos expected in 2030 is another noted potential risk that could cost the MTA $160 million of the $300 million expected from casino gaming taxes that year.  

The MTA assumes ridership across the system will reach 74% of pre-pandemic levels by the end of 2026, with differences among its divisions. Subway ridership is expected to reach 78% of the 2019 level this year, but buses will only reach 60%. Long Island Rail Road, which has had the strongest recovery, is expected to reach 97%, and Metro-North Railroad is expected to reach 87% of 2019 levels this year.

Fare revenue remains a factor for understanding the MTA’s current fiscal position and the path forward, according to the comptroller. Before the pandemic, tolls and fares covered more than 50% of the MTA’s operating budget, but that number is now just 34% in 2025, reflecting an increased dependence on taxes and subsidies. In 2027, MTA projects 38% of revenue will come from fares (26%) and tolls (12%).

The report looks to new efforts to reduce fare evasion that should be monitored for effectiveness in improving paid ridership, as its recovery has stalled, most notably on buses. The MTA estimates 49% of bus riders did not pay in the second quarter of 2026, up from 45% in the same period last year. DiNapoli’s report estimates that a 10-percentage point drop in fare evasion in 2026 would have generated up to $150 million in additional bus fare revenue. 

The report also suggests the MTA continue to make greater use of its savings program. Starting in 2023, MTA has set savings targets to help balance its budget without impacting service. The MTA reported that its program achieved $396 million in savings in 2025 and has set a target of $750 million in savings by 2029.

The annual report also examined the MTA Customer Satisfaction Surveys, the status of its Capital Program  and its outstanding debt burden.