MTA Requests $3.9B in Funding on Heels of Economic Analysis (Updated With Commentary)

Written by Andrew Corselli, Managing Editor
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The New York Metropolitan Transportation Authority (MTA) issued a letter to the New York State Congressional Delegation immediately requesting $3.9 billion in federal funding as Congress considers its next COVID-19 relief package.

In addition, the MTA released a new third-party economic analysis by McKinsey & Company examining the expected impact of the COVID-19 crisis on the MTA’s operating budget, which projects the full impact of the pandemic to reach up to $8.5 billion in 2020. The analysis examines how ridership will be impacted this year when the system begins to rebound, and projects a massive drop in toll and farebox revenue between $4.7-$5.9 billion, a significant decline in dedicated state and local tax revenues between $1.6-$1.8 billion, and a huge growth in costs associated with customer and employee safety of up to $800 million.

“I am requesting that the next federal legislation include an additional $3.9 billion to stem the immediate financial hemorrhaging in the MTA’s 2020 operating budget,” MTA Chairman and CEO Patrick J. Foye said in a letter to the New York Congressional Delegation, which, along with McKinsey & Company’s economic analysis, can be found below. “In a few short weeks, the crisis in New York has dramatically worsened and we are projecting significant additional losses as a result of the extraordinary economic downturn facing the region and nation. I thank the New York Congressional Delegation for their leadership in securing the first round of funding and we are once again asking Congress to step up and do the right thing for our millions of customers, tens of thousands of employees and for all of New York and the nation.”

Last month, the MTA secured nearly $4 billion in federal funding through the CARES Act. The COVID-19 crisis has since worsened dramatically in New York, dwarfing initial estimates and requiring a new and detailed economic analysis. Ridership has declined 93% on subways, 95% on Metro-North and 97% on the Long Island Railroad with bridge and tunnel crossings declining 62%. The MTA is immediately requesting $3.9 billion in emergency funding from the federal government, which is the midpoint of the projected range of impact examined in the analysis on the MTA’s 2020 operating budget, after subtracting the $3.8 billion slated to be delivered in the CARES Act.

MTA Chairman Patrick Foye

Commentary by Retired FTA Region 2 (New York) Official Larry Penner

There are other solutions for the MTA asking for additional $3.9 billion from Washington. The agency just recently finally decided to place their $51 billion 2020 – 2024 Five Year Capital Plan on hold. This new bailout request from the federal government is on top of the $3.8 billion emergency COVID-19 funding that Uncle Sam just made available on March 25. How long will it take for the MTA to apply for and actually spend the $3.8 billion under future Federal Transit Administration grants? Based upon ARRA, 9/11 and Hurricane Sandy supplemental emergency appropriations, it will take several years or more. Has the MTA presented to the FTA a list of eligible expenses for reimbursement as part of a grant application? Does it even have a cash flow plan to spend these funds once a grant is approved?

There is no indication that the MTA has ever taken advantage of the FTA expanded eligibility of federal assistance available under FTA’s Emergency Relief Program to help transit agencies respond to COVID-19. This includes allowing transit providers such as the MTA to use previous federal formula funds for emergency-related capital and operating expenses. It also raises the federal share of those expenses from 80% to 100%. There is $1 billion or more in available funding within $12 billion in existing FTA grants that could be used under this option. Has the MTA taken advantage of this funding opportunity?

MTA budgeted $4 billion of local funding within the $32 billion 2015 – 2019 and $51 billion 2020 – 2024 Five Year Capital Plans to be used toward the $6.9 billion Second Avenue Subway Phase Two project, which benefits only a handful of the five million daily transit riders. There is also $1.5 billion for the Bronx East Metro-North Access to Penn Station project. Suspending the 1% Arts in Transit expenditure requirement for capital projects could free up millions. Stop wasting hundreds of millions on outside consultants when in-house resources are available to do the same work. All combined could save the MTA almost $6 billion.

Diogenes is looking for a brave MTA Board member or elected official to have the courage to speak up. It is time for the MTA to match Washington dollar for dollar. Every COVID-19 federal dollar should be matched by a corresponding dollar cut to the $51 billion 2020 – 2024 Five Year Capital Plan. Millions of Americans make due with what they have when facing a loss of income. The MTA must do the same.

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