The transit agency that oversees New York City’s subway, buses and two regional commuter rails will postpone fare increases for at least six months and defer drastic service cuts now that it anticipates receiving billions of dollars from the federal infrastructure bill, officials said on Monday.
Hours before President Biden was scheduled to sign the $1 Trillion spending bill, Gov. Kathy Hochul said the legislation would allow both the state and the Metropolitan Transportation Authority to avoid price changes and service cuts that could have affected riders.
“We anticipate there’ll be no fare hikes for the M.T.A.,” Ms. Hochul, a Democrat, said at a news conference at Albany International Airport, before she flew to join Mr. Biden at the White House. The planned service cuts, she said, “are now off the table.”
Janno Lieber, acting chair and chief executive, of the transit agency, stated later that the agency was also assisted by federal coronavirus relief programs, including nearly $11 million New York would receive after resolving the protracted funding dispute with New Jersey and Connecticut.
He said that the money would allow the authority avoid making decisions that might reduce ridership, at a time when commuter trains, buses, and subways are trying to attract passengers back. The agency is facing a staggering financial crisis in the wake of the pandemic, which decimated ridership and the agency’s revenue.
“Incentivizing people to come back means maintaining the pretty robust service that we have,” Mr. Lieber said. “And it also means that for the time being, we need to stand on the fare.”
Since months, the agency has been warning about service cuts. Officials had projected that the subway and bus services would be reduced by around 40% in the worst-case scenario, but as ridership has increased, they have stated that cuts will be less severe.
Transit officials have delayed fare increases for the third consecutive year, with Monday’s announcement marking the third delay. Although the agency had originally planned to increase fares by 4 percent this spring, it decided in January/ July to delay that increase until 2021. It was focusing on gaining back riders.
It was unclear how long fare increases could be avoided. Officials did not address whether they planned to raise fares in 2023, as was expected.
Mr. Lieber said only that transit officials were “taking fare hikes off the table for at least six months and maybe well beyond that.” When asked in a radio interview when the next fare increase might come, he said it was “not the moment to speculate.”
However, Lieber acknowledged that there was still a deficit in the agency’s budget that it would need to address.
Before the pandemic, fares accounted for about 38 percent of the agency’s total revenue. But transit ridership — and with it, fare collections — plummeted when the virus upended life in New York City.
The subway and bus ridership has slowly improved, but it still remains below the preandemic levels of 40%. This raises fears about the M.T.A. Soon, we will face a multibillion dollar budget shortfall.
The agency is expected present its latest financial plan on Wednesday, along with more details about its budget for 2022, at its board meeting.
But Mr. Lieber said that officials expected that the infrastructure bill would reduce the agency’s need to borrow money, easing pressure on its operating budget in the next year. However, he warned of large future shortfalls.
“We’re going to be counting on the Legislature and other stakeholders to figure out a way to put Humpty Dumpty back together again, to help us balance the budget without a lot of service cuts and fare hikes,” Mr. Lieber said. “We need that help. But it doesn’t have to all be solved in the next year.”
Lisa Daglian, the executive director of the Permanent Citizens Advisory Committee to the M.T.A, a watchdog group, applauded Ms. Hochul’s announcement, saying it would help restore confidence at a crucial time for the transit system.
“It means that there’s some good stability that riders can expect,” she said, “in terms of keeping their fares stable and service levels as high as possible.”
Citizens Budget Commission, a financial watchdog organization, stated that delaying fare hikes could increase financial pressure on the transit agency.
Without considering some continued fare increases and service cuts, “the financial circumstances of the M.T.A. will only grow more precarious in 2026 and beyond,” said Alexander Heil, the group’s vice president of research.
Rachael Fauss, a senior research analyst at Reinvent Albany, a good-government advocacy group, also said that while Monday’s announcement was a positive development for riders, she remained concerned about the financial road ahead for the agency.
“What remains to be seen is where the M.T.A.’s financial troubles still remain,” she said.
Ana Ley contributed reporting.
Source: NY Times