The MTA plans to invest $20 million per year in new subway, bus and commuter railroad service, as well as an additional $125 million over the four-year plan period for new operational and maintenance needs. These initiatives are detailed in separate news releases from MTA New York City Transit, the MTA Long Island Rail Road and MTA Metro-North Railroad. The budget also makes major investments in customer, employee and public safety which total $363 million over the four-year plan period. These investments are also detailed in a separate news release from the MTA.
The plan makes several long-term trade-offs to ensure revenues meet ongoing obligations. Over the four-year period, supplemental contributions to an LIRR pension plan totaling $110 million will be eliminated, though all actuarially-required contributions will continue. Also, $254 million will be withdrawn, and additional contributions totaling $533 million will be suspended for four years, from a discretionary fund for future retiree health benefits which has no mandatory funding level. The plan also reduces pay-as-you funding for the MTA Capital Program by $80 million per year, which is equivalent to a $1.5 billion reduction in Capital Program funding capacity.
The favorable budget trends and the management actions noted above allow the MTA to project a year-end cash balance of $162 million in 2014, which would be rolled forward to help balance the 2015 budget. A previous $255 million deficit projected for 2017 has been eliminated, and the 2018 projected deficit is reduced to $262 million. Fare and toll increase assumptions remain unchanged at 4% revenue increases in 2015 and 2017, which is broadly equivalent to the rate of inflation.
The MTA’s annually recurring savings, from a series of management actions that began in 2010, continue to play an important role in the MTA budget’s stability. The MTA expects to save $1.3 billion in 2015, a figure that rises to more than $1.5 billion in 2017. The savings expectations have increased with each consecutive annual budget since they were first introduced.