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New York’s Metropolitan Transportation Authority, the largest mass-transit system in the nation, will ask for an additional $3.9 billion of federal aid as the agency estimates the financial impact of the coronavirus may reach $8.5 billion and projects ridership this year won’t return to pre-pandemic levels.
The MTA’s revenue is in a free-fall as people stay at home and avoid using the system. After a nearly $4 billion federal allocation to help cover lost revenue, the agency needs additional funds to stop the MTA’s “immediate financial hemorrhaging” and help support the region’s economy, which accounts for 10% of the nation’s gross domestic product, Pat Foye, the MTA’s chairman and chief executive officer, said during a press briefing on Thursday.
“The nation needs a strong New York to lead the recovery from this pandemic,” Foye told reporters.
With New York City at the epicenter of the pandemic in the U.S., the effects on the MTA are dramatic. Ridership on MTA subways and commuter-rail lines is down about 95%. The virus has killed 68 MTA workers, and more than 2,400 subway and bus employees have tested positive, Foye said.
Capital markets
Additional federal assistance may help the MTA as it looks to access the capital markets. The agency plans to sell bonds to help rollover short-term debt that matures on May 15, said Bob Foran, the MTA’s chief financial officer.
“We believe the market will continue to be there for us, but we need the support of the federal government to give the investment community even greater confidence that MTA will make it through this pandemic and regain our financial standing,” Foran said.
Restoring ridership will take time. The MTA estimates ridership by the end of 2020 will only be 50% to 60% of where it was before the virus struck, according to Janno Lieber, the agency’s chief development officer.
Fare-box and toll revenue losses in 2020 may reach $5.9 billion and the agency anticipates additional declines in 2021, according to Foye. The MTA estimates its share of dedicated state and local taxes to drop by as much as $1.8 billion this year. Cleaning and disinfecting costs are increasing.
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Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.