NEW YORK — With post-pandemic ridership remaining below levels forecast in 2020, the Metropolitan Transportation Authority could face a “fiscal cliff” — the inability to balance its budgets — as soon as 2025, a year earlier than previously forecast, the MTA board was told Wednesday.
Chief Financial Officer Kevin Willens told the board the agency could exhaust its $15 billion in federal pandemic relief aid even sooner. WSHU Radio reports Willens said that money, which was supposed to last through 2025, could be gone in 2024. That, and the reduced revenue reflecting lower ridership, would bring on the fiscal emergency.
The 2025 projection came in a new ridership forecast from consultant McKinsey & Co., which uses two different scenarios to project the return of ridership through the end of 2026. In the most favorable scenario, ridership returns to 88% of pre-pandemic levels by that time, while an alternative scenario has it at only 73%. Ridership at 80% would represent a $500 million drop in farebox recovery from previous projections. The most recent actual figures, for the first quarter of 2022, have ridership at 55% of pre-pandemic levels.
Willens said the looming fiscal cliff could be reduced by up to $1 billion a year “by using the federal COVID relief funds in a smarter, more sustainable way, avoiding costly deficit financing just to delay the problem. But that is going to take action in early 2023.”
The discussion of the looming deficit came as the MTA released its preliminary 2023 budget and four-year financial plan. The revised financial plan projects annual deficits of $2.5 billion within two years, increasing to $2.75 billion in 2028.
“Identifying new, dedicated revenues to fund mass transit is imperative as we seek to address our fiscal cliff,” MTA CEO Janno Lieber said in a press release. “Transit is essential to the economic future of New York as we continue to recover from the pandemic, and it should be treated as an essential service, with strategies that don’t just put the problem on the backs of our riders through painful service cuts and fare increases.”
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