The Metropolitan Transportation Authority (MTA), a notoriously mismanaged and wasteful agency is facing an apocalyptic fiscal crisis, claiming the need for staggering cuts if Washington doesn’t come up with a $12 billion bailout. The agency is facing a deficit of over $16 billion through 2024 as the Covid-19 pandemic wiped out their revenue (which comes from fares, tolls, fees, and subsidies) in the blink of an eye. Ridership has returned to only a quarter of usual levels after plummeting by 90 percent during the worst of the pandemic. Projected revenue shortfalls are $4.2 billion from fares, $880 million from tolls, and $2.1 billion from subsidies.
Should the bailout fail to arrive the MTA threatens that subway and bus service will be cut by 40 percent. Commuter rail service will be cut 50 percent and Metro-North’s west-of-Hudson service will be eliminated. Furthermore, projects, like extending the Second Avenue Subway and connecting more commuter trains to Penn Station, would be paused indefinitely. Purchasing of electric buses and new subway cars, as well as adding elevators to stations to make them more accessible, would also be indefinitely paused. Making matters worse for those with accessibility needs would be the elimination of the Access-A-Ride program. Fares and tolls would be raised by one percent and one dollar, respectively, above already scheduled increases.
Of course, even though New York City finds itself in a painful financial situation, particularly in Midtown Manhattan, there are those who still push for the congestion pricing debt scheme. A tax that will fall hardest on those who can ill afford it right now especially the small businesses that are barely hanging on and the trucking companies that heroically kept the city afloat during the pandemic. Under this plan, the MTA would add around $15 billion to its current debt. It is the debt that put the agency on the road to ruin, long before the pandemic arrived. Per New York State Comptroller Thomas P. DiNapoli’s report from March of 2020:
- The amount of outstanding long-term debt issued by the MTA more than tripled between 2000 and 2019, reaching $35 billion, and is projected to approach $53 billion by 2023.
- Debt service is projected to reach $4.2 billion by 2023, an increase of 59 percent since 2019.
- The share of total revenue needed to pay debt service is projected to reach 22.5 percent by 2023, after averaging 16.1 percent over the past decade.
- The debt burden could grow even higher, depending on the timing of bonds to be issued by the MTA to fund its share of the 2020-2024 capital program.
Given the state of the economy, the debt burden is likely to rise even higher. So even if the Feds were to step up with a bailout, due to the debt, fare and toll hikes as well as service cuts would still be a strong possibility.
The proposed service cuts would kneecap the region’s ability to rebuild from the pandemic but if substantial MTA reform does not happen now it never will. The cycle of borrowing to fund grandiose Manhattan-centric projects left this city and its essential workforce especially vulnerable. For too long the outer boroughs have been disrespected by both MTA management and the business groups and think tanks who pick MTA projects. The new, New York needs a transit agency to match.