The MTA will seek to cut another $350 million in costs next year to help close a budget gap brought on by the COVID-19 pandemic, the agency’s chairman said Tuesday.
Speaking to the Cheddar financial news network, Metropolitan Transportation Authority chairman Patrick Foye revealed plans to trim the transit agency's expenses, including cutting overtime and scaling back on the use of outside consultants.
The cuts would combine with plans underway since last year to consolidate several MTA departments, for a total of $1.1 billion in savings in 2021, Foye said.
The measures, which will be discussed at Wednesday's meeting of the MTA Board, aim to show federal elected officials the authority is doing its part to put out what Foye has called a “four-alarm fire” budget deficit that could reach more than $10 billion by next year. The MTA has received $3.9 billion in federal stimulus aid, and is pushing for another $3.9 billion in a possible second round of funding.
“The $1.1 billion that we will take out of costs in 2021 will help, but it will not be enough . . . as a result of the pandemic and its continuation into 2021 and beyond," Foye said.
Without additional help from the federal government, the authority may necessitate “steps that no one at the MTA and no one in New York wants us to take,” including by cutting service and laying off workers, Foye said. The MTA employs about 74,000 workers, including about 7,500 at the LIRR.
“Those are things unattractive, unpalatable and unacceptable to New Yorkers,” Foye said. “But obviously we've got to balance our books.”
Charles Brecher, senior adviser to the Citizens Budget Commission — a bipartisan New York fiscal watchdog group — said the MTA’s plan “doesn’t sound like enough.” He urged the agency to consider more meaningful measures, including postponing planned expansion projects and accessibility upgrades, right-sizing service levels to current demands, and working with unions to achieve major savings in labor costs.
“They’ve got to say to labor, if you want this system to survive, we’ve got to make it through this, and we’ve got to do it with some efficiencies,” Brecher said.
New figures published by the MTA illustrate the depths of the pandemic’s impact on finances. On the Long Island Rail Road, fare revenue — which typically covers about half of the railroad’s operating expenses — is $198 million below budget through June, and about 58% below the same period last year.
Another indicator of the toll taken on the railroad from its ridership losses: The LIRR’s cost for moving each passenger it carried in June was about $35, more than twice the amount it was during the first half of 2019.
After falling to just 3% of usual levels at the pandemic’s height in the region, LIRR ridership is now up to about 21%, according to railroad president Phillip Eng. With Long Island and New York City already at Phase 4 of reopening, MTA officials said they don’t expect a significant increase in ridership until after Labor Day.
Eng said the LIRR is taking steps to encourage riders to return to the system, including by recently reopening 22 station ticket offices and restoring onboard cash transactions, which had been suspended since April because of safety concerns.
“We wanted to give the riders some more options," Eng said in an interview Tuesday. "We wanted to make it a little easier on folks during these economic times, when they might be living check to check.”