N.Y. MTA Eyes $4 Billion of Debt Due to Standoff With New Jersey
(Bloomberg) -- A stalemate between New York and New Jersey on how to divvy up federal coronavirus relief funds for public transit may force New York City’s subway system to borrow as much as $4 billion in short-term debt to cover operating costs.
The Metropolitan Transportation Authority, the largest public transit system in the U.S., is considering issuing the short-term debt as officials work to resolve a dispute with New Jersey over federal funds allocated to the region’s mass transit providers. Congress approved the funding for the region in two coronavirus relief packages, with the states responsible for dividing up the money.
“The regional allocation, what’s referred to as the whack up between the states of New York, New Jersey and Connecticut, is not resolved and due to that continuing issue we need that money sooner,” Pat McCoy, MTA’s deputy chief, financial services, said Monday during the agency’s monthly finance committee meeting.
The standoff is delaying the MTA’s receipt of $10.5 billion of federal aid that it needs to cover lost revenue during the pandemic, when subway ridership plunged by as much as 90%. The states must decide how to allocate the funds by Nov. 8 to participate in a $2.2 billion pot of federal discretionary funds for mass transit systems hit hardest by Covid.
“We do anticipate resolution soon,” McCoy said. “I would anticipate by Nov. 8 because that’s when we need to file application papers for a $2.2 billion competitive or discretionary grant for coronavirus support.”
MTA’s finance committee approved the borrowing on Monday. The agency’s full board is set to weigh in on the short-term debt on Wednesday during its monthly meeting.
New Jersey’s allocation formula would shortchange New York by $810 million, including $730 million for the MTA, the agency has said.
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