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Railing Over MTA’s One-Track Mind on Federal Bailout Hope

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The Jamaica Center station in Queens

Ben Fractenberg/THE CITY

The MTA has placed a $12 billion, all-or-nothing bet on a bailout from the federal government.

But budget watchdogs and some of the transit agency’s own board members are pushing the MTA to look beyond Washington for salvation from a pandemic-driven economic crisis that’s alternately been described by officials as a “fiscal tsunami” and a “five-alarm fire.”

”Absent a miracle in the next few weeks, the MTA is not going to get the $12 billion of funding it needs,” said Denise Richardson, vice president of research at the nonprofit Citizens Budget Commission. “So, what’s the plan?”

Without another infusion of federal funding, the transit agency has warned of 40% cuts to subway and bus service, layoffs and delays to long-planned system upgrades and expansion efforts. The MTA previously received $3.9 billion in federal aid to help cover operating expenses during the pandemic, but that money ran out in July.

MTA Chair Patrick Foye

Ben Fractenberg/THE CITY

“It doesn’t get much worse than the Great Depression,” MTA Chair Patrick Foye told THE CITY. “This is not only worse for the MTA, it’s dramatically worse.”

The MTA says it’s bleeding more than $200 million a week from the enormous drop in collection of fares, tolls and dedicated tax revenues.

Much of transit officials’ hopes rest with the Trump administration, which Gov. Andrew Cuomo has accused of “trying to kill New York City” — and which recently pulled funding used to sanitize subway cars and buses during the pandemic.

Multiple MTA board members told THE CITY the agency should be looking at other funding options in case another round of emergency federal aid fails to materialize. 

Board Games

Board member Neal Zuckerman criticized the MTA’s board as “not a functioning board” that’s been short on alternative funding ideas.

“If it were a functioning board, either publicly or privately, we would have a discussion as a board about our fiscal options,” he said. “We would talk about what’s our Plan A and our Plan B and our Plan C.”

An MTA official disputed that, saying board members have “been repeatedly briefed on our financial situation.” The ones who have questioned the focus on federal funding, the official said, “have not come up with any recommendations,” except for an increased gas tax. 

Among the gas-tax supporters is Robert Linn, who was appointed to the MTA board by Mayor Bill de Blasio. 

Commuters wait for a 7 train at Queensboro Plaza.

Ben Fractenberg/THE CITY

Linn said “any solution will require federal aid.” But the impact of the pandemic is so widespread that the MTA is far from alone in needing help, he added.

“It’s the state, it’s the city, it’s the Port Authority, you then have hospital systems, you have restaurants, you have hotels,” Linn said. “Given that extraordinary problem, what do we do?”

Zuckerman said the MTA should be looking for assistance from corporations and banks with New York headquarters, the city’s large real estate owners and the labor unions that represent transit workers.

“I don’t know the perfect answer, but what I do know is the problem,” he said. “And there are least four constituencies in the New York area with trillions upon trillions of dollars that could be a source of short-term capital.”

But Foye cited the “incredible pressure” on real estate companies that have been staggered by lower demand for office space during the pandemic. 

Transit ‘Absolutely Essential’

An August survey by the Partnership for New York City showed that less than 10% of office workers had returned to their workplaces and that only 26% are expected to come back by the end of the year.

“What we’re looking for is economic recovery so the taxes that the MTA depends on can keep flowing,” said Kathryn Wylde, the head of the Partnership, which represents business leaders. “Keeping a viable regional transportation system is absolutely essential.”

Foye said the MTA “can’t cut its way out” of the fiscal crisis, though the agency’s financial plan has identified an additional $540 million in savings for 2021 through reductions to overtime and consulting contracts.

That’s on top of $2.8 billion in annual savings over the last decade, an MTA spokesperson said.

As with other transit agencies across the country, the MTA is banking on another influx of federal money. Foye called the economic crisis created by the pandemic “dramatically different” than the one faced by the city in 1975, when the city teetered on the brink of bankruptcy and then-President Gerald Ford essentially told New York, as the Daily News memorably put it, to “drop dead.”

“I don’t think this is a case in which it’s reasonable to think the city or the state can come to the rescue,” Foye said.

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