Can Hochul help the MTA avoid its impending financial crisis?

As the Metropolitan Transit Authority tries to fend off an impending financial crisis, state Comptroller Tom DiNapoli released a report which found the authority's plans for cost efficiencies will not be enough to cover the agency’s projected debt. Experts argue it’s time for Gov. Kathy Hochul and state lawmakers to increase aid to the MTA heading into the next legislative session.

For years, the MTA has been transparent about its ongoing financial issues. Those financial woes were only made worse by the coronavirus pandemic which caused ridership to decrease significantly. The federal government has awarded the MTA $15 billion in COVID-19 relief funds since 2020. But, almost two years since the start of the pandemic, remote work has seemingly become the status quo and train ridership is at 65% of pre-pandemic levels. At City & State’s transportation summit last month, MTA CEO Janno Lieber warned of the system’s potential financial crisis when federal funds run out and called for funding solutions other than increasing fares. 

The transit authority projects over $2.5 billion in deficits every year after 2023, per the latest 2023 proposed budget. But the MTA’s financial problems are not only theirs to bear. Danny Pearlstein, policy and communication director at Riders Alliance, underscored the pivotal role the authority plays in the makeup of the state and how a potential fiscal cliff could affect everyone. “It's not just straphangers, who should be worried about a transit death spiral,” Pearlstein said. “It's incumbent upon all New Yorkers to hold the governor accountable and sure that we get the resources we need to stabilize and grow public transit, to both save and invest in the future of our public infrastructure.”

Pearlstein, along with the Rider Alliance, is calling on the governor to invest up to $300 million in the MTA so the agency can provide 6-minute service – a campaign created to address the needs of riders who are dependent on reliable train service as their means of transportation by decreasing the wait time for train service. Pearlstein highlighted the governor’s power over the state’s budget as the solution for the current financial issues plaguing the MTA. “Governor Hochul needs to act. Albany leadership needs to agree on a funding package that saves transit,” Pearlstein said. “(Hochul) dominates the state budget process that decides how much money the MTA will have.” 

Rachel Fauss, a senior policy advisor at government watchdog group Reinvent Albany, agrees with the sentiment that the state needs to increase its efforts to help the transit authority. The group’s “Ridership Down” report underscored how the state could help provide funding to the MTA, including stopping the gas tax holiday and remitting existing transit funds directly to the MTA. “There's only so much the MTA can do on its own,” Fauss said. “It's really (Hochul’s) responsibility, with the legislature, to make sure that it continues to serve New Yorkers. The MTA is a state authority, it’s the state’s responsibility.”

When asked about the governor’s plans to address the financial crisis of the MTA heading into the 2023 legislative session, Hochul’s press team pointed to a recent gaggle where the governor answered a question by a reporter concerning the possibility of providing support to the MTA in addition to congestion pricing. “Absolutely talking to the leaders about what we're going to do in this year's budget, but also we have found some areas where we can cut expenses,” Hochul told reporters. In a follow-up question regarding the possibility of including support for the MTA in the governor’s budget, Hochul said she planned to work closely with the state legislature first.

"Governor Hochul took action last year to avoid a fare hike or service reductions, and she is committed to providing safe, quality, and reliable transit service to riders. We will continue working with federal partners and state legislators on how to best support public transit," Hochul’s team wrote in a statement to City & State.

Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA, agrees the state needs to help with the MTA’s financial crisis but says an “all hands on deck” approach is needed. Daglian pledged to work with the MTA, advocates and elected officials to address the financial crisis plaguing the MTA, during a testimony at the MTA board meeting on Wednesday. “Our city, state and federal partners must step up and provide the MTA with direct, ongoing and sustainable funding support and increased subsidies,” Daglian said at the meeting.

In an interview with City & State, Daglian said that elected officials are aware of the gravity of the transit authority’s financial issues and the importance of addressing them head-on. “Gov. Hochul has made it really clear that she is a friend to transit and a friend to transit riders. There are very astute elected officials who are very aware of the potentially deleterious effects of what happens without properly funding the MTA”, Daglian said.

Daglian also highlighted the gravity of addressing the transit authority’s financial crisis because of the impact of COVID-19 and described the current conversations about its financial crisis as a chance for change. “It's an opportunity to really shift the conversation to how to do things differently,'' Daiglain said. “Transit is not just an essential service, it's essential to our way of life.