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If “essential worker” is the key catchphrase of America’s pandemic period — referring to a provider of a critical service that’s under-resourced and underappreciated — New York’s Metropolitan Transportation Authority might be the public agency version.
The MTA serves not just New York City residents with bus and subway service, but suburban commuters from a 5,000- mile radius across at least three states. Its network of railroads, buses, bridges and tunnels means it runs more vehicles than all other U.S. transit agencies combined. It is so critical to the operation of the tri-state area encompassing New York, New Jersey, and Connecticut, one of the biggest and most productive regions in the country, that analysts asked to quantify its importance spoke instead in existential terms.
“The region would not exist in the form it does now without the MTA. It’s just impossible,” said Kate Slevin, executive vice president at the Regional Plan Association, a civic planning organization. “There’s not enough space on the streets to move everyone in cars. It’s vital to environmental health, social mobility, and the region’s economy.”
Yet the MTA’s finances, already in trouble before being slammed by the pandemic, may be just as existential. Ridership averaged only 44% of pre-pandemic levels throughout the first nine months of 2021, and the 2021 budget was balanced only with the use of multiple extreme measures.
Specifically, without $14.5 billion in federal pandemic funding and borrowing $1.5 billion, the agency forecasts operating deficits in the billions through 2025—and an outside consultant estimates it won’t be until 2024 that a “new normal” level of ridership of between 82% and 91% of pre-pandemic levels is achieved.
See: What good is a commuter tax in a work-from-home world?
“The MTA is not a fee for service entity,” said Felicia Park-Rogers, director of regional infrastructure projects for the Tri-State Transportation Campaign, an advocacy group. “This is a public service that we all need just like fire and police. The MTA is facing severe budget shortages and that is scary and problematic.”
In a statement, Jaibala Patel, the MTA’s acting chief financial officer, said the agency “is required to balance its budget every year and the latest financial plan shows a balanced budget through 2025, after which, there are, as we have said, significant structural deficits that need to be addressed.”
Park-Rogers and other advocates said one of the agency’s biggest challenges is its reliance on ridership — what’s called “farebox revenue” in transit budgets. Before the pandemic, 38% of its revenue came from that source, she noted. With the plunge in ridership, farebox collections only will account for 16% of 2021 revenues, leaving a 20% deficit in the operating budget.
Such a steep decline in revenues would need to be addressed by revisiting a mix of solutions tried before, such as cutting service, raising fares, and issuing debt. Service cuts and higher fares often can mean a death spiral for public transit agencies, since attaining regular ridership depends on reliable, accessible service. That’s one reason public transit agencies around the country, including in Albuquerque, New Mexico, and Tucson, Arizona, have been experimenting with free service in recent months.
While the MTA can’t shift its own mix of revenues, there is more hope for such reforms now than any other time in many years. The agency is unique among American transit authorities in that it is controlled by the governor of New York state — even through its biggest impact centers around New York City.
Transit advocates are cheered by a new governor in Albany — Kathy Hochul was sworn in last August, after Andrew Cuomo resigned. Residents also voted for a new mayor for New York City, Eric Adams, who took office on January 1. Both have pledged to support the MTA.
“Hochul has shown commitment to improving the MTA and focusing on the needs of riders. It is very promising,” Park-Rogers told MarketWatch.
“It’s an encouraging time in terms of city-state cooperation,” Slevin said.
Another encouraging sign: the billions of dollars flowing from the federal government’s infrastructure bill and other legislation that will help the MTA make capital improvements.
“We are about to experience a renaissance on the capital side,” Park-Rogers said. The MTA plans to give priority to improvements at Penn Station, the nation’s busiest rail hub, accessibility upgrades throughout the system, and more.
Still, big questions remain about the outlook for public transportation in post-pandemic America — if that ever arrives. MTA’s consultant cited continuation of hybrid work models, increased online shopping, and greater take-up of walking and biking within cities as factors in their lower “new normal” ridership estimates.
“It’s hard to overstate the challenges that transit around the country has been facing as a result of COVID,” said Robert Puentes, president and CEO of the Eno Center for Transportation, a Washington-based think tank.
“It’s disrupted everything that we think about transit and the role it has in keeping cities functioning,” Puentes said. On the other hand, he noted, the pandemic “has shown how essential transit is.”
Puentes calls the next few years “critical” for the MTA, but is optimistic about public transportation broadly. “One thing we will see, because cities innovate in times in crisis, we’ll emerge from this better,” he said in an interview.
In Boston, for example, the transportation agency has rolled out dedicated rapid bus lanes – a development Puentes calls “not as sexy” as subways, but increasingly likely to have a central role in many city transit plans.
Similarly, RPA’s Slevin doesn’t think riders have lost faith in transit altogether. Public-opinion polling shows that people view “better and more frequent service” as a key to getting ridership back, she said, and that tracks with real-world experience, in which the MTA’s weekend ridership has recovered much more than weekday service.
“I think if the service was more reliable and more frequent, people would be making different calculations,” Slevin said.
