MTA officials said Wednesday that November will be the make-or-break month that will determine whether or not the agency will need to adopt drastic scenarios to work within its grim means or if operations can continue with the aid of the federal government.
If the latter does not materialize, MTA’s Chief Financial Officer Robert Foran said during a surprisingly brief report, they will need to implement a contingency plan for shoring up finances.
“We continue to work on a November plan and a revised contingency plans, vitally important if federal funding is not forthcoming and we continue to identify and evaluate various fare and toll options for the board’s consideration,” Foran said during the MTA’s monthly board meeting on Oct. 28. “What we’re going to prepare is a proposed budget that includes federal aid and will show you what the options will be if federal aid is not forthcoming. We certainly hope that we don’t have to rely upon those contingency plans, but we will be presenting that to [the board] for discussion.”
One plan in particular that has been provided by Foran at meetings over the summer is a 40% reduction in service and a $1 fare increase for New York City Transit riders.
One option for bridging the deficit for the MTA is to take out a $10 billion loan from the Federal Reserve, which may increase their debt from $34 billion to $50 billion, for which the deadline to qualify would be Dec. 31. According to Foran, the agency would rather get a loan by the end of the year rather than miss the deadline and get nothing from the federal government in stimulus.
Foran said that if the stimulus funding does not come through, cuts would need to be implemented “almost immediately,” or within the first quarter of 2021.
And while the MTA has campaigned for the federal government to provide up to $12 billion in stimulus aid to carry New York City commuters through the end of 2021, the U.S. Senate has been reluctant to provide this after the $2 trillion CARES Act passed in April.
The $4 billion provided to the MTA at that time has since been exhausted
“The budget gap is significant, and I’m not sure that all of the combined efforts that we have, you know, absent deficit financing can get us there. We need federal support or devastating things will need to happen,” Foran added. “The wild card here is the depth of the pandemic’s affect and the tenor, length, duration of the pandemic’s affect.”