In the San Francisco Bay area, commuters face a series of grim possibilities in 2026: Bay Area Rapid Transit trains that run once an hour, shutdowns of entire lines, no service on weekends.
The prospects for riders in and around Philadelphia are also bleak. While a judge’s September order overturned massive service cuts to dozens of Southeastern Pennsylvania Transportation Authority (SEPTA) bus and rail lines, a 21.5% fare increase survived.
But planned improvements such as station renovations, accessibility upgrades and the purchase of new electric and hybrid diesel-electric buses were postponed when SEPTA shifted $394 million in capital funds to its operating budget in order to cover shortfalls for this fiscal year and the next one, which begins in July.
Meanwhile, a long-term funding solution has yet to materialize for SEPTA’s nearly 800,000 daily riders, even as Pennsylvania’s governor moved over nearly $220 million in capital funding for safety and infrastructure work.
“This is a story that transit agencies or communities across the country are all dealing with,” said Stephen Bronskill of Transit Forward Philadelphia, an advocacy organization.
Yet in New York, North America’s largest mass transportation authority finds itself in an enviable and rare position: The MTA is financially stable in the near term, with years of projected balanced budgets and it’s adding service, not cutting, on the subways and buses.
“This is a remarkable turnaround just from a few years ago, when we were staring down the COVID fiscal cliff,” Jai Patel, the MTA’s chief financial officer, said at the transportation authority’s November board meeting.
The A and L last month became the latest subway lines to receive weekday service boosts. Several others — including the G, J and M — have had more frequent weekend service since July 2023, while the C, N and R lines are among those whose riders now spend less time waiting for the next train during the midday hours on weekdays.
With those changes, New York is bucking the national trend.
“Imagine in New York, if you went out for dinner and the subways and the buses weren’t running anymore late at night,” said Philip Plotch, principal researcher and senior fellow at the Eno Center for Transportation, a Washington D.C.-based think tank.
But that is exactly what’s facing transit systems in cities and states where vast funding gaps have yet to be filled.
“You have less money than you did just four or five years ago, and transit agencies across the country are hurting because of that,” Plotch said. “They don’t have the revenue coming in from the farebox because there’s fewer people riding.”
The MTA has managed to dodge mass layoffs to its workforce of more than 70,000 and keep every-other-year fare and toll increases at projected levels, even as the authority spends less money now than in 2019 — all while actually increasing weekday subway service by 2% across 13 lines and weekday bus service by 1.6% since 2023.
That translates, according to the MTA, to 162 additional weekday subway trips — from 8,179 two years ago to 8,341 now. On the buses, the number of weekday trips has climbed by 856 on weekdays, from 54,291 to 55,147.
How is all of this possible for a traditionally cash-strapped transit system?
Janno Lieber, MTA chairperson and chief executive, credited Gov. Kathy Hochul and state lawmakers for helping to put the authority in a more stable situation after ridership plummeted during the pandemic.
“They’re living the fiscal cliff, they’re going over,” Lieber said of peer transit agencies after the MTA’s November board meeting. “We don’t have that because Kathy Hochul stepped up in 2023.”
The firmer financial footing is the outgrowth of several factors that include a post-pandemic ridership return that’s among the highest in the country and an array of revenue sources and taxes dedicated to funding transit. Those include taxes on real estate, sales, ridesharing, car rentals, fuel and more.
Then there is the key 2023 buy-in from Albany lawmakers that significantly increased the transportation authority’s revenues by hiking the payroll mobility tax on employers within the MTA service area.
“Ridership is coming back and those dedicated taxes are now really making a huge difference for the MTA — you can’t say it’s just the payroll mobility tax, because there are so many existing ones,” said Rachael Fauss, senior policy advisor for Reinvent Albany, a fiscal watchdog group. “Taking them all together, plus that really significant operating investment in 2023, that’s why we’re at where we are, rather than in a really difficult place.”
The MTA is also counting on at least $1.5 billion through 2029 in casino-licensing revenues earmarked for its annual operating expenses — with billions more potentially coming from taxes on three new gambling palaces on the verge of getting licenses to operate in Queens and The Bronx.
The potential for a wagering-driven windfall for the MTA — which puts the biggest chunk of its operating budget toward workforce salaries, benefits and pensions — has won over some who were not big on casinos.
“We were definitely skeptics on that, but it is good for them,” Fauss said.
But there is also the possibility of the MTA losing revenue from bus ridership, should Mayor-elect Zohran Mamdani succeed on one of his signature proposals to eliminate fares on buses. Mamdani has said that the no-fares program would carry an annual cost of $700 million — while Lieber has countered that the lost revenue is likely to be closer to $1 billion and that the proposal “probably needs to be studied a lot.”
Patel, the MTA’s chief financial officer, said last month that where farebox revenue once accounted for 38% of the authority’s nearly $20 billion operating budget, that figure is now down to 26%.
A Bay Area Rapid Transit train heads to Oakland International Airport, Oct. 06, 2019. Credit: Sheila Fitzgerald/Shutterstock
Transit agencies and experts have cited post-pandemic shifts in ridership as being tricky for traditional funding models, with officials from BART warning that the funding structure for the five-county system “no longer works” in a region with the highest work-from-home rates in the nation.
“BART is really high on the farebox,” Plotch said. “So that’s incredibly risky, too, when you have these changes in ridership.”
According to BART, 71% of its operating budget prior to the pandemic came from fares, along with revenue from parking and advertising. That figure fell to 29% in Fiscal Year 2024.
Close to 4 million people now ride the New York City subway daily, about 84% of pre-pandemic levels, while bus ridership is now near 1.2 million, down from just under 2 million pre-pandemic. Combined, the subways and buses account for about 80% of the MTA’s total revenue from fares, Patel said.
Paratransit ridership, meanwhile, is at an all-time high, with more than 1 million trips in October, according to MTA data.
That level of ridership, while still not at 2020 levels, makes the city and the surrounding suburbs, by far, the most transit-dependent area in the U.S.
“In the period from January through September 2025, 47% of transit riders in the country were using transit in the New York urban area, which is, of course, far disproportionate to the urban area’s share of the nation’s population,” said Yonah Freemark, a transportation and urban development expert at the Urban Institute. “This means that elected officials in New York are particularly focused on responding to rider concerns.”
Those factors have combined to pull the MTA back from the brink of financial calamity that is facing other big-city systems, where ridership has returned at a slower pace and where close to $70 billion in COVID-era federal emergency funding to keep trains and buses running is reaching the end of the line.
“The federal operating money, that was brand new, because the transit agencies took such a big (ridership) hit,” said Plotch, a former MTA manager of planning and policy. “Policymakers wanted the buses to keep on running because if the buses didn’t run, how were those emergency workers going to get to work, how were people going to get to the hospitals, how were the home-care givers going to make it to senior homes?”
State Stepping Up
Transit systems in and around Boston, Chicago and Minnesota’s Twin Cities are among those that have avoided falling off worst-case scenarios through legislative measures that shored up funding — at least for now — even while ridership is lagging.
Public transportation advocates say more such measures are essential for long-term sustainability of U.S. transit networks.
“We are seeing meaningful action from state and local leaders across the country who recognize the urgency of addressing public transportation’s financial challenges,” said Paul Skoutelas, president of the American Public Transportation Association.
“For the most part, states simply need to step in,” added Freemark, of the Urban Institute.
That’s the hope in Pennsylvania, where Bronskill of Transit Forward Philadelphia said the state has “kicked the can down the road about a year and a half.”
“Our state leaders know that we averted a crisis in Philly, but it by no means solved a problem,” he said. “We’ll be right back in this mess in about a year and a half if action isn’t taken.”
Ninety miles to the north, the outlook is significantly brighter — for now.
Neal Zuckerman, an MTA board member who heads the panel’s finance committee, praised Hochul for committing to the transportation authority’s fiscal sustainability, adding that the agency “always figures it out.”
He warned that depending on money based on factors beyond the MTA’s control — such as real estate taxes or city funding — could add pressure with deficits projected toward the end of decade.
“Do I worry about the fiscal health of the MTA over the medium term?” Zuckerman said. “Heck yes.”
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