The bad news keeps on coming for public transportation systems around the world. In New York City, the New York Metropolitan Transportation Authority (MTA) will reportedly announce deep cuts tomorrow in response to the ongoing financial crisis caused by the coronavirus pandemic.
According to the New York Times, which spoke with MTA chairman Patrick J. Foye ahead of the board meeting scheduled for July 22, the agency finds itself in the deepest financial hole it’s ever seen. And with ridership hovering at about 20 percent of the 5.5 million daily commuters the bus, rail, and subway system saw pre-pandemic, raising revenue through fare hikes are off the table.
The pandemic has ravaged New York City’s public transportation systems. As previously reported, the MTA’s $51.5 billion 2020-2024 capital plan, which would have modernized signals, improved rails, bus lanes, and roadways, and renovated 70 subway stations, has been put aside for the time being. The agency has also lost the $1 billion in annual revenue from congestion pricing it was expecting, as the Trump administration has reportedly been slowing implementation of the plan to tax vehicles entering Manhattan below 60th Street.
Falling ridership, lost revenue sources, and uncertainty over a federal bailout have left the struggling MTA with a $16.2 billion deficit through 2024. That shortfall is more than ten times the amount the agency was facing after the 2008 crash; with real estate tax revenue falling, the MTA faced a $1.2 billion deficit at the end of 2008 and ultimately raised fares, permanently cut dozens of bus routes, and removed two entire subway lines. Those very noticeable cuts only saved the agency $400 million (in 2010 dollars).
What’s on the chopping block this time?
The MTA will continue to lobby the federal government for another $3.9 billion bailout after receiving $3.8 billion in March. Even if that money comes through, it would only cover operating costs. This year, the MTA has lost $5.1 billion in fare and toll collection and $2.1 billion in tax revenue and subsidies—next year, the agency expects to lose $3.9 billion from fares and tolls and $1.9 billion from taxes and subsidies. The first step the agency is expected to take tomorrow will be to trim $1 billion by eliminating overtime, cutting outside consultants, and reducing non-essential services.
That’s a drop in the bucket, and to continue operating for the foreseeable future, the MTA will take on more long-term debt and, thanks to approval from the state, transfer money set aside from the 2020–2024 capital plan to cover operating expenses. Tolls are also expected to rise, as more New Yorkers turn to commuting by car to insulate themselves from COVID-19. Transit activists fear that if cuts continue and ridership remains low, the MTA will lock itself into a vicious cycle of taking on more debt while being forced to cut service, permanently killing a system that low-income New Yorkers depend on. Further layoffs and furloughs of transit staff may also be in the cards.
Across the pond in New York’s English counterpart, a government bailout for London’s beleaguered Tube could open the door to privatizing the system. Beset by falling ridership, Transport for London, the agency responsible for administering the city’s public transportation, accepted a $2 billion bailout from the UK’s Department for Transport yesterday, opening itself up to review from the government agency, according to The Guardian. Some of the reforms proposed include ramping up the number of driverless trains and exploring “alternative operating models” over the long-term, which the National Union of Rail, Maritime and Transport Workers has interpreted as shifting to private ownership. Whether anything ultimately comes of the review will be reported on as it is announced.