The transit agency that oversees New York City’s subway, buses and two regional commuter rails will postpone fare increases for at least six months and defer drastic service cuts now that it anticipates receiving billions of dollars from the federal infrastructure bill, officials said on Monday.
Hours before President Biden was expected to sign the $1 trillion spending bill, Gov. Kathy Hochul said that the legislation would allow the state and the agency, the Metropolitan Transportation Authority, to avoid price and service changes that would have hurt riders.
“We anticipate there’ll be no fare hikes for the M.T.A.,” Ms. Hochul, a Democrat, said at a news conference at Albany International Airport, before she flew to join Mr. Biden at the White House. The planned service cuts, she said, “are now off the table.”
Janno Lieber, the acting chair and chief executive of the transit agency, later said that the agency was also helped by federal coronavirus relief packages, including nearly $11 billion New York would receive after resolving a protracted funding fight with neighboring Connecticut and New Jersey.
The money, he said, would allow the authority to stave off decisions that it worried might lower ridership at a time when the subways, buses and commuter trains are aggressively trying to lure back passengers. The agency is facing a staggering financial crisis in the wake of the pandemic, which decimated ridership and the agency’s revenue.
“Incentivizing people to come back means maintaining the pretty robust service that we have,” Mr. Lieber said. “And it also means that for the time being, we need to stand on the fare.”
The agency has for months been warning about service cuts. In their worst-case scenario earlier this year, officials projected reducing subway and bus service around 40 percent, though as ridership has come back, they have said cuts would be more modest.
The announcement on Monday marked the third time this year that transit officials delayed fare increases. Though the agency had planned a 4 percent increase earlier this spring, it decided in January and July to postpone that increase through the end of 2021 as it focused on winning back riders.
It remained unclear how long fare increases would be averted. The transit agency typically raises fares every two years, and officials did not address whether they plan to raise fares in 2023 as had been anticipated.
Mr. Lieber said only that transit officials were “taking fare hikes off the table for at least six months and maybe well beyond that.” When asked in a radio interview when the next fare increase might come, he said it was “not the moment to speculate.”
But Mr. Lieber acknowledged that the agency was still facing a looming deficit it would need to address.
Before the pandemic, fares accounted for about 38 percent of the agency’s total revenue. But transit ridership — and with it, fare collections — plummeted when the virus upended life in New York City.
Since then, subway and bus ridership has slowly recovered, but it remains about 40 percent below prepandemic levels, raising fears that the M.T.A. will soon face a multibillion-dollar budget shortfall.
The agency is expected to present its latest financial plan, with more details on its 2022 budget, at its board meeting on Wednesday.
But Mr. Lieber said that officials expected that the infrastructure bill would reduce the agency’s need to borrow money, easing pressure on its operating budget in the next year. Still, he warned that large shortfalls were expected in the future.
“We’re going to be counting on the Legislature and other stakeholders to figure out a way to put Humpty Dumpty back together again, to help us balance the budget without a lot of service cuts and fare hikes,” Mr. Lieber said. “We need that help. But it doesn’t have to all be solved in the next year.”
Lisa Daglian, the executive director of the Permanent Citizens Advisory Committee to the M.T.A, a watchdog group, applauded Ms. Hochul’s announcement, saying it would help restore confidence at a crucial time for the transit system.
“It means that there’s some good stability that riders can expect,” she said, “in terms of keeping their fares stable and service levels as high as possible.”
But the Citizens Budget Commission, a financial watchdog group, said that delaying the fare hikes could put further financial pressure on the transit agency in the future.
Without considering some continued fare increases and service cuts, “the financial circumstances of the M.T.A. will only grow more precarious in 2026 and beyond,” said Alexander Heil, the group’s vice president of research.
Rachael Fauss, a senior research analyst at Reinvent Albany, a good-government advocacy group, also said that while Monday’s announcement was a positive development for riders, she remained concerned about the financial road ahead for the agency.
“What remains to be seen is where the M.T.A.’s financial troubles still remain,” she said.
Ana Ley contributed reporting.