MTA Proposes Unprecedented Service Cuts, Layoffs in New Financial Plan
The MTA anticipates a 40% reduction in subway and bus service and to furlough 9,300 workers, which would still leave the agency with a $12 billion deficit through 2024.
During its most recent board meeting on Nov. 18, the Metropolitan Transportation Authority, which oversees much of New York City’s public transportation, presented its 2021 budget and updated financial plan through 2024. As expected, both updates were grim.
The proposed 2021 budget includes a plan to furlough 9,367 employees. It also anticipates a 40% reduction in subway and bus service, and a 50% service reduction on the MTA’s commuter railroads. These cuts could result in 15 minute wait times for all subways on weekends and 20–30 minute wait times during peak hours on commuter railroads.
The proposed reductions, which would begin in May 2021, are an effort to lower the agency’s expenses by more than $1.2 billion per year, amidst a ridership decline that is worse than the Great Depression. However, with ridership and farebox revenue down 70% due to less commuting during the pandemic — and no promise of additional federal aid — the MTA is still projecting a $12 billion budget deficit through 2024, with a $3.1 billion shortfall in 2021 alone.
“It’s hard to not feel like we’re looking at the downfall of New York City before us,” Liam Blank, a Policy and Communications Manager at Tri-State Transportation Campaign, a transit advocacy group, told prox. in an emailed statement.
“Millions of New Yorkers rely on public transit,“ he continued. “We need the system to be in good shape to help the city — and region — quickly recover from [this] economic collapse.”
During the meeting, the MTA’s Chief Financial Officer Bob Foran stressed the importance of securing funding from the federal government. This has been a priority for the MTA throughout COVID-19. The first and only federal stimulus package, signed in March 2020, allocated $3.9 billion to the MTA. This bailout — in addition to the $2.9 billion loan the MTA plans to seek from the Federal Reserve’s Municipal Lending Facility — will yield the MTA a budget surplus for 2020. But, Foran indicated, without additional aid, even with the 2020 surplus carried forward, more drastic measures may need to be taken to close the 2021 budget shortfall. These measures could include: additional layoffs, service reductions and revised negotiations with labor unions.
John Samuelson, President of Transport Workers Union and member of the MTA Board, defended MTA workers during the meeting. He said that the union, to which many MTA workers belong, is “not going to open up [their] contracts” to reduce the budget deficit. He pointed out that MTA employees were the frontline workers who kept public transportation moving during the height of the pandemic. “[The workers] have given so much already,” he said.
Fare increases were also proposed during the meeting. The MTA will hold public hearings in December for a routine, biannual 4% fare increase set to take place in 2021. This 4% fare increase was determined before the pandemic began and is unrelated to the MTA’s new budget situation. However, some board members also raised the idea of reducing fares, either permanently or temporarily, in an attempt to attract more riders.
Foran also shared longer term projections about the future of ridership for the transportation network. According to an analysis from McKinsey & Company, a consulting firm that is working with the MTA, ridership will permanently decline to between 80% and 92% of pre-pandemic levels by 2024. This comes as a result of changes in commuting lifestyles, based on estimates that people will work from home 1–3 days per week, as opposed to half a day per week, on average, beyond 2024. The measure was presented as “the new normal” that the MTA would have to grapple with.
Blank told prox. that the MTA needs to find more diverse sources of revenue to tackle these long term challenges. He pointed out that the agency relies heavily on fare collection, taxes and toll money, all of which “took a big hit” during the pandemic.
Samuelson echoed this sentiment during the board meeting. Without new revenue sources, he said, the MTA “will be right back in this boat [in coming years], talking about service reductions and headcount reductions.”
The MTA has considered a few new revenue sources in recent years, including congestion pricing, a plan that would toll cars in Manhattan south of 60th Street. This plan, which is projected to yield $1 billion in additional revenues, was approved by New York lawmakers in April 2019, but has not been approved by the federal government for more than 18 months. Additionally, the MTA is running a proof-of-concept for a subscription electric bike and scooter service with the Transit Tech Lab and a New York City start-up, Beyond.
In a press conference after the board meeting, MTA Chairman Patrick Foye acknowledged that the agency is seeking new revenue sources. But as of right now, he said, it would be imprudent to include any of those ideas in the budget because there is little assurance that any new revenue-generating concepts will be rolled out.
Reflecting on the current state of the agency, Foye said, “This is the greatest financial calamity the MTA has ever faced.”
The MTA board will vote on the proposed budget and any modifications during its December meeting. The date has not yet been set.
Bio: Akash Pasricha is an M.S. Candidate at the Columbia University Graduate School of Journalism. He has written for the Globe and Mail, Toronto Star, and Financial Post Magazine in Canada. He hosts the podcast “Spotlight on the Six,” acclaimed as one of Toronto’s best upcoming podcasts by Hot Docs Podcast Festival. Akash is a former Deloitte consultant, having advised multinational companies in mining, insurance, retail, and financial institutions. He holds an HBA from the Ivey Business School and a B.Sc. from Queen’s University, and he regularly slices his driver off the tee when golfing!
