New York’s MTA May Run Out of Federal Funds in Early July

(Bloomberg) -- New York’s Metropolitan Transportation Authority is urging Congress to approve another $3.9 billion of aid, continuing a lifeline that’s kept the MTA afloat as farebox and toll revenue has plummeted, and saying it may otherwise run out of federal cash within weeks.

Ridership dropped from mid-March as people were ordered to work from home if possible, and businesses such as stores and restaurants were closed to slow the spread of the coronavirus.

The MTA has about $1 billion left of the initial $3.9 billion that Congress approved to help cover lost revenue and increased expenses for cleaning and disinfecting. Those funds may run out after the first week in July, according to Bob Foran, the MTA’s chief financial officer.

“Our finances are on life support,” Foran said in a statement. “We need the Senate to take action now and follow the House of Representatives’ leadership on continued pandemic funding. As the MTA is the lifeblood of New York and the nation’s economy -- our financial health will be critical to the country’s economic recovery.”

The MTA, including New York City’s iconic subways, is the largest public transit system in the nation. Its deficit may reach as much as $8.5 billion this year; officials expect ridership may only recover as much as 60% of pre-pandemic levels by the end of 2020.

‘Phase Two’

Federal funds have helped plugged the hole of revenue lost due to the coronavirus. MTA farebox and toll receipts are down $1.4 billion, or 40%, this year through May, according to documents for the agency’s next board meeting set for Wednesday. State and city subsidies are $353 million below budget for the same period, including $94 million less from levies on certain New York City real-estate transactions, called an Urban Tax.

While New York City enters its “Phase Two” reopening on Monday and subway ridership has started to increase, usage is still down sharply from usual levels. Nearly 4.4 million people entered the subway’s network during the work week ending June 12, up 19% from the prior week, data compiled by Bloomberg show. That’s still 80% lower than the average for the past year.

“Phase Two” for the city will include the return of outdoor dining, in-store retail, hair salons and other businesses, all to be operated with social distancing and guidelines on hygiene, as well as the reopening of some offices.

Ridership on MTA subways in April fell 92% compared to the same month in 2019, while the number taking the Metro-North Railroad was down 94% and Long Island Rail Road ridership dropped by 97%, according to MTA board documents.

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