New York Metropolitan Transportation Authority (MTA) has adopted the 2021 budget and the and 2021-2024 financial plan. The authority’s spending plan assumes USD 4.5 billion in federal aid for the next year without which, the MTA Board would be forced to take drastic actions to cut service by 40% across metro network, buses and Staten Island Railway and by 50% across Long Island Rail Road and Metro-North Railroad. Additionally, in the case the MTA would be forced to reduce the number of positions across the agency by more than 9,400 and the authority’s historic USD 51.5 billion capital plan will remain on hold.
The authority says that even it will receive USD 4.5 billion in “desperately needed federal aid, this will only balance the authority’s 2021 budget, falling far short of solving the total deficit over the four-year plan.
The MTA projects it would still face nearly USD 8 billion in deficits through 2022-2024 financial plan that will need to be addressed. The organisation is prepared to make any necessary budget adjustments during this period, depending on the amount of federal aid it receives in the current negotiations in Washington.
“We are closely monitoring events in Washington and will revise the budget and prepare necessary actions, depending on what our federal leaders deliver. Congress should stay in session until passing a Covid relief bill that includes funding for public transport. The MTA continues to face a once-in-100-year fiscal tsunami and this is without a doubt one of the most difficult budgets in agency history, with devastating deficits projected,” MTA Chairman Patrick Foye said.
According to its estimation, MTA needs USD 12 billion in desperately needed federal aid, as it continues to face the worst financial crisis in history. “If Washington does not come through, our budget will be in free fall – and that does not even account for significant out-year budget gaps we are facing in 2022, 2023 and 2024. There will be hard choices ahead,” MTA Chief Financial Officer Bob Foran explained.
The MTA has closed budget deficits exceeding a combined USD 8 billion for 2020 and 2021 by leveraging USD 2.9 billion from the Federal Reserve Municipal Liquidity Facility and assuming USD 4.5 billion in federal aid in 2021, in addition to significant agency cost saving efforts.
Estimated reductions
Without emergency aid, MTA is proposing service reductions of 40% for the New York City metro and bus transport sector, and 50% for the Long Island Rail Road and Metro-North Railroad, for a combined annualized savings of nearly USD 1.3 billion. Service reductions are estimated to have a workplace impact of nearly 9,400 positions.
On metro transport, MTA estimates a service reduction of up to 40% that may result in reduced train frequency, suspension of service on some lines at certain times of day, and/or major weekend changes. The reduction in service may allow for a 35% metro fleet reduction, generating savings in maintenance, cleaning and inspection costs. The service reduction would result in the elimination of nearly 2,400 positions.
For LIRR and Metro-North Railroad, the authority proposes to reduce commuter rail transport service by 50%, which may result in peak period train frequencies of every 20 to 30 minutes along busier line segments, or hourly at less busy line segments. Proposed reductions under consideration take into account the existence of nearby alternate service and maintaining adequate service for essential workers. Off-peak and weekend service may be hourly, reflecting current ridership levels while maintaining sufficient service to prevent crowding. The railywas’ service reductions would result in the elimination of a total of more than 900 positions.
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