A Christmas Eve letter from the state legislative leaders was coal in the MTA’s stocking, rejecting its $65 billion 2025-29 capital plan.

But in her budget address, Gov. Kathy Hochul reaffirmed her support for the MTA in her budget address Tuesday.

What You Need To Know

  • The MTA board approved a $65 billion 2025-29 capital plan in September that had a $33 billion funding gap which was expected to be filled by Albany

  • The leaders of the state legislature who make up half of the capital program review board rejected the plan Christmas Eve which means the MTA must resubmit the plan

  • Gov. Kathy Hochul says negotiations around funding the plan will happen when an updated proposed is submitted but did not include any possible revenue streams in her executive budget 

“We must ensure that the MTA has the capital funding required to keep the system running,” the governor said. “And to deliver new and expanded services that the commuters deserve. MTA is developing an updated capital plan to propose to the legislature and myself. Once we receive it, we’ll determine the best way to fund it.” 

Despite rejecting the original plan, legislative leaders know what could still be a $33 billion dollar funding gap isn’t going away.  

“We’ve got to get an answer,” state Senate Majority Leader Andrea Stewart-Cousins said. “And I think now everybody knows that and so we will figure that out.”

“We have to see what the shopping list is before I can tell you how we figure out how to pay for it,” Assembly Speaker Carl Heastie said after the address. 

Much of the subway system’s integral components date back to when Franklin D. Roosevelt was president, but the governor has especially touted the one expansion project in the plan, the Interborough Express. The light rail would connect Brooklyn and Queens. But that may have to go, and capital plans have been cut down in the past.

“I think that we need massive investment. 90% of this plan is state of good repair,” Andrew Rein, president of government watchdog Citizens Budget Commission, said. “Frankly, we think it should be 100% but they have to balance it with New York’s affordability, and we have the nation’s highest taxes already.”

But new taxes could be on the table. The payroll mobility tax, a tax on certain businesses, was raised in 2023 to bail out the MTA, but just in the city. It could be expanded to the whole MTA region.

“But we have to protect working-class and middle-class New Yorkers and small businesses,” Manhattan state Senator Brad Hoylman-Sigal said. “They can’t be stuck with a tax that was proposed last session that was put squarely on businesses in New York City, and small businesses at that.”

MTA Chair and CEO Janno Lieber said last week he’s hopeful the plan will be fully funded, and not just by taxes.

“This is a pro-transit legislature. I’m incredibly confident that they’re gonna step up and solve things,” Lieber said last week. “But don’t assume that it’s all new taxes. There are sophisticated ways to fund infrastructure that the governor’s been studying, that our team has been studying, and I believe those will be part of the story in the end too.”

Any increase in the payroll mobility tax outside of the city could be a liability for democrats in the suburbs who are also vulnerable because of congestion pricing.