MTA must address its looming fiscal cliff now

The Metropolitan Transportation Authority this week painted a bleak picture of its financial outlook. Commuters have returned to trains and buses more slowly than expected, leaving ridership — and revenue — much lower than anticipated.

The disheartening statistics depict a public transit system that for too long has depended on its farebox and now faces big trouble. New projections indicate it could take another 13 years before ridership levels recover to levels that preceded the COVID-19 scourge. Ridership now stands at about 61% of pre-pandemic numbers systemwide and is expected to reach 80% by the end of 2026.

And the Long Island Rail Road is expected to take longer to recover than New York City's subways and buses, MTA officials have said.

What's left is an enormous revenue gap that federal dollars won't fill. The MTA's newest strategy would stretch further the $15 billion in federal money it's received — largely from COVID-19 relief funds — to try to limit the ultimate so-called "fiscal cliff." But that still would leave the authority with an $800 million hole next year, and even larger deficits in years to come. That's not even the worst-case scenario, which could include even less of a ridership comeback or higher inflation or a slower economy.

By this dark forecast, the MTA will be left hat in hand, likely needing to beg city, state or federal officials for help. But one-time cash infusions won't solve this crisis. The problem calls for a deep rethinking of how the MTA operates, as board members began to discuss this week. The authority will need to find new streams of recurring revenue, possibly cut expenses, develop efficient maintenance practices, and review all borrowing.

Everything must be on the table. Regular fare increases remain key, even as the authority must lure riders back. Beyond the critical recurring income sources, the MTA finally could look for more so-called "value capture" efforts — utilizing MTA-owned property or other land near MTA stations for development to generate revenue. It's worth a look at other railroads' best practices, too.

But the MTA can't address its budget shortfalls without also dealing with its expenses and how it does business. The authority won't be able to cut its way out of this mess, but there will be painful steps to take.

The top MTA expenditure is labor. That's likely to be a sticking point, especially if inflation continues and labor leaders deem insufficient the 2% wage growth the MTA now is calculating. But any conversation about a new normal must include potential changes to schedules, productivity and other aspects that involve the authority's workforce, labor rules and costs.

This is just the beginning of difficult conversations and compromises. But it has to start now. The cliff is in sight.