For the first time in decades, the Metropolitan Transportation Authority had been on the verge of having as much money as it needed to run and repair the continent’s biggest transit system.
That changed on Wednesday, when Gov. Kathy Hochul said abruptly that she would suspend a tolling plan that would have raised money the authority needed for critical improvements to New York City’s subways and buses.
The authority is now suddenly contending with a gap of $15 billion in its capital plans, throwing into question whether it will be able to maintain the century-old infrastructure that millions of New Yorkers rely on by repairing and upgrading aging equipment, modernizing signals and technology, and making subway stations more accessible for people with disabilities.
The governor could replace the money, at least temporarily, with funding from the state’s reserves. She is also said to be considering proposing a tax on New York City businesses, which would require the approval of the State Legislature. That is far from guaranteed, especially with just one day left in the legislative session.
Ms. Hochul’s decision has put the M.T.A. back in the familiar position of having to jockey against other state interests in order to fill its coffers.
“Where it leaves the governor is in between a rock and a hard place, because she’s the one that said that she had the money,” said Lisa Daglian, executive director of the authority’s Permanent Citizens Advisory Committee, a watchdog group. “It’s going to be very surprising to very many of us as to where that money is going to come from,” she added.
While transit agencies around the country have struggled to save their budgets from pandemic deficits, Ms. Hochul and state lawmakers gave the authority a lifeline last year when they agreed to include new and recurring funding for the M.T.A. in the state budget. In recent memory, transit leaders in New York had lurched from crisis to crisis, warning of a so-called transit death spiral, where falling ridership causes revenue to shrink further until the network collapses.
Until her reversal on Wednesday, Ms. Hochul had seemed determined to fund the transit network and to push congestion pricing through the finish line. Just two weeks ago, the governor told attendees at the Global Economic Summit in Ireland that implementing congestion pricing was necessary to “making cities more livable.”
This week’s development could now pit the governor’s political interests against the needs of the M.T.A. Authority officials did not immediately respond to requests for comment.
The $15 billion from congestion pricing was to have paid for crucial, long-planned projects in the M.T.A.’s $51.5 billion capital program. Under state law, the money could not be used to support daily transit operations, or to subsidize subway and bus fares. The $15 billion was to have been secured through bond financing, backed by projected toll collections of about $1 billion annually.
But in recent months, as the transit agency faced legal challenges from lawsuits against congestion pricing, M.T.A. officials had halted new contracts for all but the most urgent construction. No bonds have been issued yet for congestion pricing, M.T.A. officials said.
M.T.A. officials have previously said that if the congestion pricing money fell through, they would have to delay or scale back these projects. On Wednesday, the transit agency referred questions about what will happen to these projects to the governor’s office.
Andrew Rein, president of the Citizens Budget Commission, a watchdog group, said that further delaying critical repairs and improvements to the subway system would allow its aging infrastructure to deteriorate even more, affecting millions of riders.
“Our transit system urgently needs investment to bring it to a state of good repair; we should not be hurtling towards more ‘Summers of Hell,’” he said.
Mr. Rein added that when repairs are finally made, “ultimately it’s going to cost a lot more to fix up.”
The M.T.A. capital projects now on hold include:
• $3 billion to upgrade signals on a stretch of the A and C lines in Brooklyn and on the B, D, F and M lines in Manhattan, which have switches dating back to the 1930s.
• $2 billion for new subway cars and electric buses and charging equipment.
And the M.T.A. needs $3 billion to advance the second phase of the Second Avenue subway, which would extend service north from 96th Street to 125th Street and add three new stations. New York has already received $3.4 billion from the federal government for the project.
In a report last month, the state comptroller, Thomas P. DiNapoli, stressed the importance of the M.T.A.’s capital program, which “is critical to winning riders back to public transportation and increasing fare revenue.”
“There’s more at stake than just delayed projects,” Mr. DiNapoli said in the report. “If the M.T.A. covers the shortfall in capital funds by using its operating budget to pay for more borrowing, less money would be available for day-to-day operations and goals, like increasing service.”
The sudden pause on congestion pricing raises questions about the more than $555 million the M.T.A. approved for the installation, operation and maintenance of dozens of gantries and other equipment for congestion pricing at close to 110 tolling points across Manhattan.
In 2019, the M.T.A. selected TransCore, a transportation infrastructure company in Nashville, to design, build and oversee the traffic monitors. A spokeswoman for TransCore declined to comment, directing questions to the M.T.A.
The M.T.A. did not respond to questions about how much of the contract was paid, but most of the infrastructure for the tolls has already been installed.