Without stimulus aid, the future of New York City’s subway hangs in the balance – MarketWatch

Commuters ride the New York City subway November 5. The MTA has warned of significant layoffs, delayed repairs, and service reductions.

AFP via Getty Images

As New Yorkers head into the new year, they’ll be faced with yet another source of anxiety: Whether or not the city’s subway system can continue to function. The MTA, the nation’s largest mass transit system, has spent months awaiting news of federal stimulus money, and without it, could be forced to make cuts that would render the city’s transit public transit ecosystem nearly unrecognizable. 

“This is the worst financial crisis in the MTA’s history by orders of magnitude,” said MTA chairman Patrick J. Foye. “The MTA has faced periodic financial challenges over the years—9/11, Sandy, the financial crisis. But nothing like this, ever.”

During the worst days of the virus in New York City in the spring, ridership dropped by 90%, and is currently still 70% lower than its usual rates, a devastating blow for a system that relies heavily on fares to cover operating costs. To keep the subway system functional, the MTA has lobbied for $12 billion worth of funding in the second stimulus package, after receiving $4 billion in the first round of federal aid. “This is a national problem requiring a national solution,” Foye said.

But with stimulus talks continually stalled in Washington, transit officials have been forced to start planning for a future without federal funds. The MTA has released plans for what 2021 would look like in the absence of stimulus money, warning of significant layoffs, delayed repairs, and 40% service reduction on subways and buses as well as 50% service reductions for commuter rails.

Such drastic cuts would have ripple effects that could result in as many 450,000 lost jobs, $50 billion in lost earnings, and a $65 billion reduction in the region’s gross domestic product by 2022, according to an analysis published by the NYU Rudin Center for Transportation in October. 

“If these cuts go through, it will set us back decades,” said Danny Pearlstein, policy and communications director for the transit advocacy group Riders Alliance. “It’s not hard to imagine a scenario in which large parts of the system would become completely atrophied or shut down entirely. It would be a uniquely devastating event on the level of finding out that our water is no longer drinkable.”

Since the spring, the subway system famous for its 24-hour service has been closed for cleaning between 1 a.m. and 5 a.m., with no set return date for typical service hours. Further reduced service could create an immediate crisis and hours of daily delays for the city’s commuters, many of whom are essential and healthcare workers who represent the system’s “core customers” according to Foye.

Another potential blow to riders: MTA officials are considering raising the cost of a subway ride from $2.75 to $3.75, creating a significant financial hardship for New Yorkers—and disincentivizing them from returning to public transit at all. 

“As with so much else this year, it would be inequitable in its impact,” Pearlstein said. “Black New Yorkers already have much longer commutes than white New Yorkers. Health-care workers have the longest commutes, often to places that are out of the way and not served well by transit.”

With an estimated 15 minutes added to bus wait times and eight minutes for trains if cuts go through, Pearlstein said, “If you have a two-bus commute, that’s an extra hour per day. I was speaking with a family the other day. Both parents are nurses, and would each be looking at another 3.5 hours commute each week. This is really harsh thanks and cold comfort to the people who have been serving us throughout the pandemic.”

Slowed-down service also has the potential to create further gridlock from car traffic, a side effect that could have implications well beyond daily commuting hassles. 

“The MTA underpins everything in New York, our financial economy, but also whether or not you can even drive on our city streets,” said Nick Sifuentes, executive director of the Tri-State Transportation Campaign, a transit nonprofit and policy organization. If there’s an outbreak of COVID and ambulances can’t get through gridlock, people will die. These are very real possibilities.”

A struggling New York City transit system could do economic damage far beyond the tri-state area, as well.

“New York is responsible for 10% of the entire national gross domestic product,” said Mitchell Moss, the director of the Rudin Center for Transportation, and co-author of the Center’s report. “The city has a disproportionate role in the national economy and global economy, and the U.S. has a stake making sure this region is vital, just like we need to make sure airlines are vital.”

Joe Biden’s victory in the presidential election has given transit officials some cause for optimism. 

“We are encouraged by the fact that the president-elect throughout his legislative career in the senate has been a constant, ardent supporter of mass transit and public transit,” Foye said. “We’re planning for the worst and hoping for the best. No one at the MTA wants to take any steps to reduce service.”

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With dwindling hopes for a second stimulus before the end of the year, however, planning for the worst is an urgent priority.

“The president-elect doesn’t take office until Jan. 20, and the MTA has to vote on their budget in December,” said Andrew Albert, MTA board member and chairman of the New York City Transit Riders Council. “It would be horrific if you had to put in these massive service cuts and then undo them.”

One of the greater ironies of the current crisis is that after years of highly publicized turmoil, including 2017’s now-notorious “summer of hell,” the MTA had entered 2020 in a position of relative stability and growth.

“Pre-pandemic, “ridership was flourishing, the capital plan was moving forward, we were getting new signals and accessible stations,” Albert said. “All of this now is in a state of hold. And nothing gets cheaper the longer you wait.”

“This was the first year I could think of where we had a perfectly sized capital plan in terms of its ambition, scope, what it was going to do to attempt to fix the system,” Sifuentes added. “At the same time, we ran into COVID, which completely blew that capital plan to hell.”

These waylaid plans could put the city’s transit system in a somewhat strong position to make improvements and find a more sustainable financial footing if the federal government comes through with financial support.

“Generally speaking, the MTA was in a good posture coming into this, and hopefully we will be able to get back to that without being bogged down by long-term debt,” said City Council Member Stephen Levin, who serves on the Council’s Committee on Transportation. “That’s why the federal bailout is so essential. This is exactly the kind of situation that you need to run a deficit on a federal level for.”

And beyond the stimulus, experts are looking ahead to longer-term fixes at the federal and local level, eyeing potential new revenue sources, including congestion pricing, a gas tax similar to New Jersey’s, and even legalized marijuana sales, all of which would make the system less dependent on ridership and fares, which are expected to remain depressed for the foreseeable future.

“Now that we’re at a point where New Yorkers can drive over the George Washington Bridge to buy [marijuana] in another state, there’s no better time to legalize it and put revenues into transit,” Sifuentes said. (New Jersey voters recently passed a bill to legalize recreational marijuana use beginning in January 2021, but full details of the legislation are still being negotiated.)

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A more stable future for the subway also includes higher annual amounts of federal funding, beyond a one-time emergency stimulus. “In the best case scenario, federal formulas are adjusted so that mass transit that carries 40% of ridership of the entire country gets more than the 16% of federal transit funding they now get,” Albert said. “That’s a formula that’s so unfair, when you consider that mass transit systems are economic engines.”

But for now, transit officials can’t do much beyond brace for impact.

“The MTA has lurched from fiscal crisis to fiscal crisis throughout its history,” Pearlstein said. “New revenue sources have always been found, and I believe that something will turn up. I think the greater challenge will be down the road, putting us on more stable footing than we were before.”

Pearlstein added, “We need to save the subway in order to fix it.”