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The MTA Is Facing The Biggest Financial Crisis In Its History: “Everything Has To Be On The Table”
By
Stephen Nessen
Published Jun 25, 2020
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Marc A. Hermann / MTA New York City Transit
By
Stephen Nessen
Published Jun 25, 2020
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The MTA has been in tough financial positions in the past, but nothing like the $10 billion chasm it’s facing now with losses related to the coronavirus.
“To be clear, this is a four alarm fire,” MTA Chairman Pat Foye said at Wednesday’s monthly board meeting. “We are facing the most acute financial crisis in the history of the MTA.”
The September 11th terrorist attacks, Superstorm Sandy, and the 2008 financial crisis were nothing compared to losses from consecutive months in which ridership dipped below 95 percent of what it should be. The missing farebox revenue and dedicated taxes are expected to leave them about $8 billion short this year. While the federal government has agreed to pay half of that—the MTA is asking for another $3.9 billion to cover expenses this year. And then in 2021 it’s predicting another $7 billion deficit.
And if the feds don’t come up with more cash to plug that hole, the MTA says they will make cuts that everyone will feel.
“If we don’t get the funding everything has to be on the table,” Foye said.
The agency’s chief financial officer put up a slide at the board meeting with what exactly is on the table: wage freezes, reducing and/or delaying the 2020‐2024 Capital Program, non‐personnel expense reductions, reductions in force, fare and toll increases, service reductions, and “long‐term deficit financing.”
The MTA has already frozen work on all capital projects, which includes much of the 2015-2019 Capital Plan, and also the historically expensive $51.5 billion plan crafted by former Transit head Andy Byford.
But Janno Lieber President of MTA Construction & Development, in charge of these capital projects, warns cutting his program to save money now, will hurt the MTA in the future.
“Service gets unreliable, things break down, and our customers feel the consequences,” he said.
The current freeze does not include the $2 billion of capital work that was expedited recently to take advantage of the the pandemic slowdown, but pauses all the other work, including signal upgrades. All of the accessibility updates are also on pause.
“If we don’t get Heroes funding or something similar pretty soon we are moving closer and closer to a fiscal cliff for the MTA Capital program,” Lieber warned the MTA board. “And we know what that means because we’ve experienced it in 2009, during the last financial crisis, which was much less severe. The capital budget got cut dramatically and we know what happened: in the decade that followed service eroded. Those momentary cuts in investment, especially in an old system that needs state of good repair investment, have dramatic long term consequences, and we felt it.”
And no one wants to be responsible for more fare hikes. Despite the dire situation, Chairman Foye pledged there would be no “pandemic fare increase” in the foreseeable future.
For now, the state is allowing the MTA to use capital funds to pay the operating bills. As for congestion pricing, the plan that was supposed to fund the capital plan, Foye said Wednesday that because of federal foot dragging, it’s not likely the program would be up and running any sooner than early 2022. Cuomo didn’t bring it up when he met with Trump last month to discuss infrastructure projects.
As New York City slowly reopens, bus ridership is returning faster than the agency expected. The MTA is at 50 percent the pre-pandemic levels with more than 2 million riders. Subways are at 19 percent what they were before the coronavirus. The city has been slow to respond to the quick return of bus riders though. The MTA called for 60 miles of new bus lanes . Mayor de Blasio offered up 20 miles instead.
Despite the increase in bus ridership, it won’t help the MTA’s finances: the buses are still currently free.
Tagged
COVID-19
we the commuters
MTA
coronavirus
Stephen Nessen
Stephen Nessen covers transportation. Since 2008 he has reported on everything from Occupy Wall Street, the rebuilding of the World Trade Center site, Hurricane Sandy, to Trump’s campaign for president. His transportation reporting has taken him everywhere from the MTA’s secret Rail Control Center to the gleaming subways of Seoul. Got a tip? Email [email protected].
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