New York MTA in Survival Mode as Agency Seeks Federal Aid
New York’s Metropolitan Transportation Authority is in survival mode as the coronavirus outbreak decimates its revenue.
(Bloomberg) -- New York’s Metropolitan Transportation Authority, the nation’s largest mass-transit provider, is in survival mode as the coronavirus outbreak decimates its revenue, agency officials warned state lawmakers.
The MTA is losing $200 million a week because of the drop in ridership and an increase in virus-related expenses, Pat Foye, the MTA’s chief executive officer, said Tuesday during the state legislature’s joint public hearing on the impact of Covid-19 on the agency. The MTA is seeking $12 billion of additional federal funds to help cover budget deficits through 2021.
“Our sole focus now is on survival, how to reduce costs, maintain service and minimize reductions in force while protecting the capital program,” Foye said during the hearing.
The financial crisis has prompted the MTA board -- which typically skips meeting in August -- to schedule one Wednesday to discuss the agency’s finances.
The MTA faces a projected $16 billion deficit through 2024 and has warned that without additional federal help it will be forced to boost fares higher than originally planned, freeze wages, reduce service and stop major capital projects. Those include expanding the long-awaited Second Avenue subway, updating train signals and creating direct access to Penn Station from Connecticut and New York City suburbs.
The MTA was able to borrow $451 million last week from the Federal Reserve’s new $500 billion lending program for states and cities. The 1.92% interest rate was lower than what Wall Street banks first offered the MTA, giving the agency nearly $12 million of debt-service savings over the three-year loan, Bob Foran, the MTA’s chief financial officer, said during the hearing.
That sale helps the MTA’s near-term liquidity. Still, some lawmakers urged the MTA to ask Congress for a smaller amount to help it just get through 2020. Agency officials said the system is too large and too important to run on a month-by-month basis.
“We don’t have unlimited reserves,” Foran said. “We cannot continue to spend money unless we have assurance that we’re going to receive this federal support. So that’s why we’re asking for the $12 billion for this year and for next year so that we don’t run off a cliff beginning in January.”
While MTA ridership has increased as the number of new infections and deaths have dropped in New York City, it is still below pre-pandemic levels. Subway ridership is down 75%, as of last week, while Metro-North Railroad is 83% below prior levels and Long Island Railroad is down 76%, Foye told lawmakers.
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