Largest Investment in New York State's Transportation History

Governor Kathy Hochul today signed new legislation as part of the FY26 Enacted Budget to fully fund the Metropolitan Transportation Authority’s (MTA) $68.4 billion 2025-29 Capital Plan — a move that represents the largest investment in New York State’s transportation history. The plan will enable the MTA to make transformative investments that will include breaking ground on the new Interborough Express (IBX), rehabilitating the Grand Central Artery and improving the overall rider experience.

“Public transit is the lifeblood of New York and our investments in this century-old system will ensure it can thrive for years to come,” Governor Hochul said. “For too long, leaders had ignored the needs of straphangers and underfunded public transit. When I took office we changed that approach — and now, we’re making long-overdue investments to keep this system strong.”

MTA Chair and CEO Janno Lieber said, “The Governor and legislature have been great supporters of MTA riders and understand the importance of mass transit to New York’s economy. An extraordinary effort went into identifying what needs to be done to maintain the $1.5 trillion asset that is our region’s transportation network. The women and men of the MTA look forward to getting to work on important capital projects that deliver on the Governor’s vision and ensure that New Yorkers keep moving for decades to come.”

The investment will enable the MTA to:

• Start construction of the new Interborough Express (IBX) — a transformative new rapid transit service between Brooklyn and Queens
• Rehabilitate the Grand Central Artery — a four-mile stretch that carries 98 percent of all Metro-North service
• Purchase thousands of new subway and rail cars
• Modernize signals to provide faster, more frequent and more reliable service
• Upgrade maintenance facilities
• Renew electric power systems to enhance reliability
• Repair structurally deficient bridges and tunnels
• Deliver full ADA-accessibility improvements at more than 65 subway and railroad stations
• Make safety enhancements at stations and across infrastructure systems
• Install modern fare gates at more than 150 stations to prevent fare evasion
• Grow its zero-emissions bus fleet to stay on track for a fully-electric fleet by 2040
• Increase resiliency against flooding and protect the Hudson Line against severe weather

All of this will be achieved with a funding plan that also includes cuts to the regional Payroll Mobility Tax (PMT) for roughly 10,000 small businesses and an elimination of the PMT for self-employed individuals earning $150,000 or less. The plan will also fully eliminate the PMT for all local governments outside of New York City.

Notably, the FY 2026 Budget also reallocates up to $1.2 billion from the Penn Station redevelopment project to be put towards priority capital projects such as the Interborough Express, safety initiatives, and efforts to reduce fare evasion.

The MTA’s capital plan will also spend $6 billion on the Metro-North Railroad, including:

• Rolling stock: Completing the replacement of 40-year-old railcars with new, fully accessible M9A trains for use on the Harlem and Hudson Lines
• Station platforms and components: Replacing and rehabilitating deteriorating station platforms and other major station components
• Climate and weather protection: Coordinating investments at the most vulnerable locations – including bridges, culverts, retaining walls, and shoreline structures – to reduce service disruptions and equipment damage caused by extreme weather

Additionally, the MTA’s capital plan will spend $6 billion on the Long Island Railroad (LIRR) which would include:

• Rolling stock: Purchasing new railcars to allow MTA to retire 1980s-era M3 cars and provide for more reliable new dual-mode locomotives
• Power system improvements: Replacing or renewing 16 substations making the system more reliable
• Accessibility: Achieving 98 percent accessibility by making four more stations accessible, including Bellerose, Douglaston, and Cold Spring Harbor

Finally, the MTA capital plan includes $800 million to advance regional investments that help create additional capacity, connect with underserved communities, and respond to changing populations and land-use patterns. The plan supports projects to reduce conflicts at the nation’s busiest railway junction, electrification and capacity initiatives on the LIRR and MNR, and the evaluation and development of promising improvement and expansion projects.

The funding plan includes a balanced and responsible mix of local, state, federal and MTA sources as well as new Payroll Mobility Tax (PMT) revenues from the region’s largest businesses. In addition to providing $8 billion in total operating aid for the MTA, the FY 2026 Budget will provide a $3 billion State capital appropriation to support the MTA capital plan. The modest change to the Payroll Mobility Tax (PMT) will cause the largest businesses in the region with payrolls of $10 million or more to pay less than one percent more in PMT.

The FY 2026 Budget also requires the City of New York to provide $3 billion toward the MTA capital plan and requires the MTA to find $3 billion in efficiencies.