The Metropolitan Transportation Authority signaled last March that it would need billions of dollars to recover and a year later, the MTA now finds it needs more money to get back on track.
The American Rescue Plan signed by President Joe Biden included a $6.5 billion stimulus package for the MTA. Officials said this economic boost could not have come at a better time for the MTA, as the transit agency experiences an $8 billion budget deficit expected through 2024.
Now, the MTA board is optimistic that with the federal funding and the hope riders will soon return, this financial hole would be easily filled and the agency back on track.
“New Yorkers know that mass transit is still the quickest and safest way to get around town, and many are now coming back to the system for the first time,” MTA Chairman Pat Foye said to the board last month. He said ridership numbers are on the rise — with subways reporting over 2 million customers for the first time since the beginning of the pandemic.
Foye also said the additional federal aid will enable the MTA to avoid planned service cuts and layoffs.
The lack of revenue has led to some serious, but temporary cutbacks to service. A schedule change that went into effect on the Long Island Rail Road on March 8 brought swift backlash, and one commuter advocacy group, Passengers United, took to Penn Station to call for the resignations of Foye and New York Governor Andrew Cuomo.
“They are going to leave essential workers stranded,” said Passengers United President Charlton D’Souza at the protest. “They are going to have to wait one hour for a train only to bring them to Penn Station.”
This change did not last, as passengers demanded service to be restored. They said it was a health hazard for train cars to be overcrowded with no room for social distancing during a pandemic. The original timetable was reinstated two weeks later on March 26.
Passengers now want the federal funding to be used to improve their commutes with increased service, accessibility, and security.
Financial Losses Hit Harder Than A Locomotive
Last March, the pandemic curbed transportation. Trains and buses had to figure out how to implement social distancing measures, reducing the number of passengers allowed at a time. Ridership hit an all-time low. Anyone who was not an essential worker was told to stay home, and tourism to Manhattan by rail was nearly nonexistent.
The MTA was performing financially well, according to its March 2020 finance committee meeting. The authority’s budget czar, David Keller, reported that revenues, expenses, overtime, and subsidies were all favorable, though the MTA had $5.7 million in debt. Despite this, he summarized that overall expenses and subsidies for the beginning of the year showed that the MTA was in good financial standing.
Then, the pandemic hit.
Within a month, ridership sank to levels unimaginable for the MTA, according to Foye at the April 2020 board meeting. Compared to April 2019, ridership on the subway saw a decline of 87%, 60% on buses, 94% on the Metro-North Railroad, and 90% on Long Island Rail Road. The authority was already beginning to feel the financial toll from this steep drop in customers.
To Foye, federal funding was the only answer..
“New York cannot get through this alone, and the MTA especially cannot get through this ongoing crisis without significant additional federal aid,” Foye said, calling on Congress for assistance. “There is no time to wait. The present, and future of the MTA is in serious jeopardy.”
“The pandemic has driven ridership down precipitously,” he continued, “decimating fare and toll revenue.”
By July, due to low ridership and a lack of sufficient tax revenue, the MTA was losing about $200 million in revenue each week. The authority revealed at its board meeting that month that about $3.2 billion was needed to keep the system afloat for the rest of 2020, and another $5.8 billion for 2021. According to the proposed plan, cutting “non-labor” expenses would not have been enough to accommodate the deficit the MTA faced, which meant service cuts and changes to the workforce had to be on the table if the authority was to survive — at that time.
In August, these changes were proposed at a special MTA board meeting. The financial update that was presented to the board said that a total of $1.1 billion in reductions to areas, such as overtime spending on contracts and fare and toll increases over the next three years, was necessary. Service was to be reduced by 40%, and all infrastructure projects paused.
For the next several months, the only thing that could have prevented these changes was an estimated $12 billion in aid from the federal government, according to the board.
The recent funding from the American Rescue Plan has provided the MTA the ability to breathe once again. The transit agency’s planned capital programs through 2024 are reinstated, according to Foye. Their financial struggles are not solved, however, as they still face a deficit of at least $1.5 billion through 2024.
Riders Want To Cash In On MTA Promises
Commuters want some of that federal bailout reinvested in them since the decisions made to limit services have impacted them directly. They want to make sure that the authority will use this money wisely.
In March 2021, advocacy groups and commuters told the board they wanted the board to allocate money into long-sought projects to improve accessibility at stations for people with disabilities.
“We’re getting more money from the federal government,” Commuter Aleta Dupree said. “So, I ask that we continue to go full-speed ahead on our ADA station work.”
She said she believes the MTA should be able to have improved accessibility at all stations by 2030. “We should not sacrifice one dollar against ADA work. It needs to be done,” Dupree said.
Monica Bartley, a researcher with the Center for Independence of the Disabled New York, asked the MTA to finally make a binding agreement to commit to improving the overall accessibility on the subway system. “It is time for them to fully commit to transforming the subways so that they are fully accessible,” Bartley said.
In early April, MTA Chief Development Officer Janno Lieber announced ‘Elevate Transit: Zoning for Accessibility,’ a new initiative with the Department of City Planning and the NYC Mayor’s Office for People with Disabilities, to fulfill the MTA’s $5.2 billion commitment to citywide accessibility by leveraging private development. Lieber claims this will be a “faster and cheaper” method of providing accessibility for taxpayers.
Also during the March public comment session, D’Souza with Passengers United demanded that the MTA increase service on the Long Island Rail Road and full service to the subway system without forcing riders to take on the financial burden.
“There should be no budget cuts, no fare increases, and the MTA needs to really start looking at expanding service now,” D’Souza said, acknowledging that more commuters have access to vaccinations. “People are going to be coming back in droves [this summer].”
D’Souza also wants the MTA to increase security on the subway for the safety of passengers. A recent MTA survey revealed that about 73% of riders who have yet to return to their commutes are most concerned about crime and harassment on the transit system.
However, Foye has other plans. At the April 2021 board meeting, he told the board he wants to further shift the MTA’s focus to help create a greener New York. “We must return our focus to the literal existential crisis of our time, the ongoing climate crisis,” he said, acknowledging that transportation makes significant contributions to greenhouse gas emissions each year. Projects to bring environmental changes to the MTA are already underway, such as the new testing of battery-operated train cars on the Long Island Rail Road.
The MTA not only has its sights on making the system more environmentally friendly but also on improving its aesthetic and appearance to customers.
Lieber presented a plan to renovate Penn Station following the recent completion of Moynihan Train Hall. The plan includes purchasing additional space from Madison Square Garden, raising the heights of ceilings, installing more stairways, escalators, and elevators, building brand new gateways to the station, and more. Lieber said he believes these changes will help Penn Station stand out more to customers, but says they will be costly.
“The downside of this plan…it may be disproportionately expensive,” Lieber said. “The result would be north of a billion dollars for this whole thing.”
The MTA still faces a $1.5 billion deficit. The agency will need additional revenue to satisfy the demands of riders and meet its goals. However, the money will likely not be coming from fares and tolls just yet. The recent survey found only 15% of New Yorkers intended to increase their usage of mass transit to five days a week. Working from home is also responsible for 61% of respondents saying they no longer need to use services for the foreseeable future.
The MTA still has a long road ahead to full recovery, an even greater battle to fund all of its programs through 2024.