“Recent modest financial gains” will allow the New York Metropolitan Transportation Authority (MTA) to stave off “worst case” service cuts that had been eliminated for 2021, but had been discussed for 2022, as well as immediate associated layoffs.
Service reductions of up to 40% had been discussed for MTA New York City Transit subways and buses as well as MTA Bus Co., and of up to 50% for MTA Long Island Rail Road and MTA Metro-North Railroad. They would impact some 9,400 positions.
The short-term stability, MTA announced during a recent Board briefing on financials (download presentation below), comes from $2.9 billion in deficit financing through the Federal Municipal Liquidity Facility; improved re-estimates in dedicated taxes and fees; and receipt of $4 billion through the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA), which passed on Dec. 27. (MTA’s 2021 budget and 2021-24 financial plan, which the Board approved on Dec. 16, assumed the receipt of $4.5 billion in CRRSAA funding.)
The agency noted, however, that service reductions are still on the table for 2023 and 2024, without future federal aid to support its remaining cumulative $8 billion deficit (see chart below).
Compared with the adopted 2021 Budget and 2021-2024 Financial Plan, MTA said it now anticipates $1.15 billion in additional resources. It explained: “This improvement is the result of four major factors that are partially offset by three significant setbacks. The improvements are an anticipated additional $550 million in subsidies from the state of New York, an unused 2020 general reserve of $170 million, an end-of-year cash balance from 2020 that was $514 million more than had been anticipated, an increase of $268 million in other subsidies, and debt service costs reduced by $66 million. These are offset by a remaining federal need of $500 million from the CRRSAA, MTA savings achievements that are $92 million lower than had been estimated, and a delay in the 2021 fare/toll increases reducing revenue by $32 million.”
The MTA also predicted a “gradual return to normal ridership levels, with increases in 2021 and 2022 leading to a ‘new normal’ ridership that stabilizes in 2023 and 2024 between 80% and 92% of pre-pandemic levels.”
“The pandemic is projected to continue to wreak havoc on the MTA’s finances for the next four years as ridership gradually rebuilds,” MTA Chairman and CEO Patrick J. Foye said. “We continue to urgently request $8 billion in additional Federal aid as part of the American Rescue Plan so we can serve as the economic engine leading New York’s recovery from this devastating pandemic.” (See Railway Age’s “COVID Relief Bill: What’s in it for Passenger Rail?” for more.)
Download the presentation of MTA 2021 February Financial Plan: