The MTA has been in tough financial positions in the past, but nothing like the $ 10 billion chasm it now faces with coronavirus-related losses.
“To be clear, this is a four-alarm fire,” MTA President Pat Foye said at the monthly board meeting on Wednesday. “We are facing the most acute financial crisis in MTA history.”
The terrorist attacks of September 11, Superstorm Sandy and the 2008 financial crisis were nothing compared to the losses of consecutive months in which the number of passengers fell below 95 percent of what it should be. Revenue from the missing fee box and dedicated taxes is expected to drop them close to $ 8 billion 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, she predicts another $ 7 billion deficit.
And if the feds don’t have more cash to plug that hole, the MTA says they will make cuts that everyone will feel.
“If we don’t get the financing, everything has to be on the table,” Foye said.
The agency’s chief financial officer presented a slide at the board meeting with exactly what is on the table: wage freezes, reduction and / or delay of the 2020-2024 Capital Program, reductions in non-staff related expenses, reductions in force, rates 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, as well as the historically expensive $ 51.5 billion plan drawn up by former Chief of Transit Andy Byford.
But Janno Lieber, president of MTA Construction & Development, in charge of these capital projects, warns that cutting his program to save money now will hurt the MTA in the future.
“The service is unreliable, things break down and our clients feel the consequences,” he said.
The current freeze doesn’t include the $ 2 billion capital work that was recently streamlined to take advantage of the pandemic slowdown, but stops the rest of the work, including signal updates. All accessibility updates are also paused.
“If we don’t get funds from Heroes or something similar very soon, we are getting 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 experienced it in 2009, during the last financial crisis, which was much less severe. The capital budget was cut dramatically and we know what happened: In the decade that followed, service was eroded. Those momentary cuts in investment, especially in an older system that needs an investment in good repair, have dramatic long-term consequences, and we are sorry. “
And no one wants to be responsible for more rate hikes. Despite the dire situation, President Foye promised that there will be no “pandemic rate increase” for the foreseeable future.
For now, the state is allowing the MTA to use capital funds to pay operating bills. As for congestion pricing, the plan that was supposed to finance the capital plan, Foye said Wednesday that due to the federal foot drag, the program is unlikely to be in place before early 2022. Cuomo did not mention it when He met with Trump last month to discuss infrastructure projects.
As New York City slowly reopens, bus passengers return faster than the agency expected. The MTA is at 50 percent of pre-pandemic levels with more than 2 million passengers. Subways are 19 percent of what they were before the coronavirus. However, the city has been slow to respond to the rapid return of bus passengers. The MTA ordered 60 miles of new bus lanes. Mayor de Blasio offered up to 20 miles instead.
Despite the increase in the number of bus passengers, it will not help the MTA’s finances: buses are still free.